PE and carried interest

CFA Level II Alternative Investments
#1

I believe carried interest is calculated as let’s say 20% of the change in NAV before distributions. But we are subtracting distributions in calculating the NAV change from one year ro another, as in page 91 of Schweser, right?

My problem with that is if we have NAV of 150 in a year and the fund pays out a 100 distribution, we have 50 of NAV left. Let’s say the portfolio companies do really well and generate 100 of income post management fees in the next year and we get NAV back up to 150. Despite this great performance, the change in NAV is zero (150 to 150) and the fund gets paid no carried interest. Does this make sense?

#2

I believe they will tell you in the exam what is the method for calculating carrying interest (i.e. it can vary). In one of the examples I was looking at carried interest = 20% (NAV before distribution - commited capital).