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:
“We thus worked our way up this river, gradually adjusting our thoughts to novelties, beholding from its placid bosom a new nature and new works of men, and, as it were with increasing confidence, finding nature still habitable, genial, and propitious to us; not following any beaten path, but the windings of the river, as ever the nearest way for us. Fortunately, we had no business in this country.”
—Henry David Thoreau (1817–1862)
“The work of adult life is not easy. As in childhood, each step presents not only new tasks of development but requires a letting go of the techniques that worked before. With each passage some magic must be given up, some cherished illusion of safety and comfortably familiar sense of self must be cast off, to allow for the greater expansion of our distinctiveness.”
—Gail Sheehy (20th century)