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:
“I think it’s unfair for people to try to make successful blacks feel guilty for not feeling guilty.... We’re unique in that we’re not supposed to enjoy the things we’ve worked so hard for.”
—Patricia Grayson, African American administrator. As quoted in Time magazine, p. 59 (March 13, 1989)
“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)