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:
“I do not want to be covetous, but I think I speak the minds of many a wife and mother when I say I would willingly work as hard as possible all day and all night, if I might be sure of a small profit, but have worked hard for twenty-five years and have never known what it was to receive a financial compensation and to have what was really my own.”
—Emma Watrous, U.S. inventor. As quoted in Feminine Ingenuity, ch. 8, by Anne L. MacDonald (1992)
“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.”
—Gail Sheehy (20th century)