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:
“Along with the lazy man ... the dying man is the immoral man: the former, a subject that does not work; the latter, an object that no longer even makes itself available to be worked on by others.”
—Michel de Certeau (1925–1986)
“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)