September 1, 2026
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Historically, private capital firms had few real options for managing carry and compensation beyond spreadsheets. As platforms designed specifically for these workflows emerged, firms gained a more structured alternative. Today, AI has given new momentum to the familiar build vs. buy debate as firms explore the viability of a specialized, internal solution.
Many firms are reevaluating longstanding technology decisions as AI reshapes how software is developed. The question, however, isn’t simply whether an internal compensation and carry platform can be built. It’s whether building, maintaining, and evolving that platform remains the right long-term option as the business grows.
The work that comes after launch
Most firms evaluate an internal build as though the project ends once the first version goes live. In practice, launch is closer to the point where adoption of the system begins.
That first version reflects the firm’s operating model as it exists today. Everything that comes after reflects how the business has changed since then. For example, new compensation structures emerge, users ask for additional functionality, new integrations become necessary, and governance expectations shift. Over time, the effort involved moves away from building new things and toward continually adapting what already exists, often with a much smaller team than the one that built the original version.
We have seen this pattern play out with more than one firm. An internal system holds up well while the business stays relatively straightforward, and the pressure shows up later, once organizational growth introduces requirements that demand ongoing investment just to keep pace. That is not a reflection of the team’s original work. It is simply what happens once a system needs to keep up with a business that keeps changing around it.
A system built for today may not travel well into tomorrow
Beyond the practical burden of upkeep, the underlying requirements themselves are a moving target. Private capital firms rarely stay static for long. A carry model built around one strategy may eventually need to support additional strategies. A firm might shift from fund-level carry to deal-by-deal carry, acquire another manager, introduce new vesting provisions, add loan programs or management fee waivers, take on a minority investor, or prepare for a public listing. Each of these changes introduces operating requirements that were unlikely to have been part of the original design.
This is where experience across many firms makes a meaningful difference. Every new implementation brings exposure to another compensation structure, governance model, ownership change, or reporting requirement. Those experiences accumulate over time, informing future capabilities before many firms encounter the same challenges themselves. No single organization experiences every variation of the changes that can reshape carry and compensation over time. A platform informed by many firms can incorporate lessons from a much broader range of operating models and business transitions, creating a different foundation for adapting as requirements evolve.
Complexity has a way of arriving gradually
Internal projects also rarely stay confined to their original scope for long. A team might begin by automating carry calculations, and from there the scope has a way of expanding on its own. Participants want self-service access to their personal compensation and carry data, finance needs integration with HR data or fund accounting data, compensation planning becomes part of the conversation, and investment professionals expect co-investment tracking as well. Each of these requests makes sense on its own, since each one is solving a real problem for someone in the firm.
Taken together, though, they tend to turn a focused tool into something much closer to a full operating platform. What started as a carry calculator quietly becomes an interconnected set of workflows, integrations, permissions, and reporting capabilities, each one needing its own upkeep going forward.
Confidentiality and governance are critical
Carry and compensation information is some of the most closely guarded data inside a private capital firm, often visible to only a handful of people. That creates a natural tension for an internal build, since building, testing, and supporting the system usually requires giving technical staff access to information the business would otherwise keep tightly restricted.
Governance is also as important as confidentiality. Questions around forfeitures, compensation adjustments, or carry allocations call for more than an accurate calculation. They call for a defensible system of record that can clearly show how a decision was made, who approved it, and how the outcome was produced. That kind of auditability is easy to underappreciate until the moment it is needed, which is often the moment a legal dispute or regulatory question arises and the quality of the underlying record starts to matter as much as the calculation itself.
An operating model decision, more than a technology one
Much of the conversation around AI understandably focuses on how software development is changing. That is a meaningful shift, but it is only part of the picture. The longer-term consideration is where a firm wants to invest its own time, resources, and attention. Maintaining a proprietary carry and compensation platform means adapting it as the business changes, incorporating new requirements, managing integrations, and supporting the governance infrastructure around it. The alternative is to rely on software whose ongoing development is informed by changes occurring across the industry. Viewed through that lens, build versus buy becomes as much an operating model decision as a technology decision.
There is no single answer for every firm. Some organizations may determine that owning a proprietary platform fits their long-term strategy. For others, the economics and operational implications look different once ongoing maintenance, governance, and continuous enhancement are considered alongside the initial investment.
As a software provider, our perspective is shaped by seeing the full lifecycle of these systems across firms. That experience has reinforced an important distinction: the initial build is only one part of the investment. The larger consideration is what it takes to own, maintain, and evolve a carry and compensation platform as the business around it changes.
