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:
“... the next war will be a war in which people not armies will suffer, and our boasted, hard-earned civilization will do us no good. Cannot the women rise to this great opportunity and work now, and not have the double horror, if another war comes, of losing their loved ones, and knowing that they lifted no finger when they might have worked hard?”
—Eleanor Roosevelt (1884–1962)
“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)