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:
“... often in the heat of noonday, leaning on a hoe, looking across valleys at the mountains, so blue, so close, my only conscious thought was, “How can I ever get away from here? How can I get to where they have books, where I can be educated?” I worked hard, always waiting for something to happen to change things. There came a time when I knew I must make them happen; that no one would do anything about it for me. And I did.”
—Belinda Jelliffe (1892–1979)
“I have never worked for fame or praise, and shall not feel their loss as I otherwise would. I have never for a moment lost sight of the humble life I was born to, its small environments, and the consequently little right I had to expect much of myself, and shall have the less to censure, or upbraid myself with for the failures I must see myself make.”
—Clara Barton (1821–1912)