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 gold-digger is the enemy of the honest laborer, whatever checks and compensations there may be. It is not enough to tell me that you worked hard to get your gold. So does the Devil work hard. The way of transgressors may be hard in many respects.”
—Henry David Thoreau (1817–1862)
“Along with the lazy man ... the dying man is the immoral man: the former, a subject that does not work; the latter, an object that no longer even makes itself available to be worked on by others.”
—Michel de Certeau (1925–1986)