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:
“... how often the Presidency has simply meant that a man shall be abused, distrusted, and worked to death while he is filling the great office, and that he should drop into unmerited oblivion when he has left the White House ...”
—M. E. W. Sherwood (1826–1903)
“There is something singularly grand and impressive in the sound of a tree falling in a perfectly calm night like this, as if the agencies which overthrow it did not need to be excited, but worked with a subtle, deliberate, and conscious force, like a boa-constrictor, and more effectively then than even in a windy day.”
—Henry David Thoreau (1817–1862)