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:
“Imagination of my kind is most caught, most fired, most worked upon by the unfamiliar: I have thriven ... on the changes and chances, the dislocations and ... contrasts which have made up so much of my life.”
—Elizabeth Bowen (1899–1973)
“Fasten your hair with a golden pin,
And bind up every wandering tress;
I bade my heart build these poor rhymes:
It worked at them, day out, day in,
Building a sorrowful loveliness
Out of the battles of old times.”
—William Butler Yeats (1865–1939)