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:
“When I was a bachelor, I lived by myself
And I worked at the weaver’s trade;
The only, only, thing that I ever did wrong
Was to woo a fair young maid.
I wooed her in the winter time,
And in the summer too;
And the only, only thing that I ever did wrong
Was to keep her from the foggy, foggy dew.”
—Unknown. The Foggy, Foggy Dew (l. 1–8)
“... 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)