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)
“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)