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:
“He worked for twenty years to get his contemporaries to believe—and in the end he succeeded. Meanwhile, however, his adversaries also succeeded: he could no longer believe in himself.”
—Friedrich Nietzsche (1844–1900)
“Tailor’s work—the finishing of men’s outside garments—was the “trade” learned most frequently by women in [the 1820s and 1830s], and one or more of my older sisters worked at it; I think it must have been at home, for I somehow or somewhere got the idea, while I was a small child, that the chief end of woman was to make clothing for mankind.”
—Lucy Larcom (1824–1893)