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:
“It seems to me that upbringings have themes. The parents set the theme, either explicitly or implicitly, and the children pick it up, sometimes accurately and sometimes not so accurately.... The theme may be “Our family has a distinguished heritage that you must live up to” or “No matter what happens, we are fortunate to be together in this lovely corner of the earth” or “We have worked hard so that you can have the opportunities we didn’t have.””
—Calvin Trillin (20th century)
“I will never accept that I got a free ride. It wasn’t free at all. My ancestors were brought here against their will. They were made to work and help build the country. I worked in the cotton fields from the age of seven. I worked in the laundry for twenty- three years. I worked for the national organization for nine years. I just retired from city government after twelve-and-a- half years.”
—Johnnie Tillmon (b. 1926)