Worked Example
An example might be as follows: An investor subscribes for shares worth $1,000,000 in a hedge fund. Over the next year the NAV of the fund increases by 10%, making the investor's shares worth $1,100,000. Of the $100,000 increase, 20% (i.e. $20,000) will be paid to the investment manager, thereby reducing the NAV of the fund by that amount and leaving the investor with shares worth $1,080,000, giving a return of 8% before deduction of any other fees.
Read more about this topic: Performance Fee
Famous quotes containing the word worked:
“Let a man learn to look for the permanent in the mutable and fleeting; let him learn to bear the disappearance of things he was wont to reverence; without losing his reverence; let him learn that he is here, not to work, but to be worked upon; and that, though abyss open under abyss, and opinion displace opinion, all are at last contained in the Eternal Cause.”
—Ralph Waldo Emerson (1803–1882)
“The work of adult life is not easy. As in childhood, each step presents not only new tasks of development but requires a letting go of the techniques that worked before. With each passage some magic must be given up, some cherished illusion of safety and comfortably familiar sense of self must be cast off, to allow for the greater expansion of our distinctiveness.”
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