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:
“Detection is, or ought to be, an exact science, and should be treated in the same cold and unemotional manner. You have attempted to tinge it with romanticism, which produces much the same effect as if you worked a love-story or an elopement into the fifth proposition of Euclid.”
—Sir Arthur Conan Doyle (1859–1930)
“When I was a bachelor, I lived by myself
And I worked at the weaver’s trade;
The only, only, thing that I ever did wrong
Was to woo a fair young maid.
I wooed her in the winter time,
And in the summer too;
And the only, only thing that I ever did wrong
Was to keep her from the foggy, foggy dew.”
—Unknown. The Foggy, Foggy Dew (l. 1–8)