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:
“... how often the Presidency has simply meant that a man shall be abused, distrusted, and worked to death while he is filling the great office, and that he should drop into unmerited oblivion when he has left the White House ...”
—M. E. W. Sherwood (1826–1903)
“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)