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 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)
“These last worked only one hour, and you have made them equal to us who have borne the burden of the day and the scorching heat.”
—Bible: New Testament, Matthew 20:12.