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:
“Let a man learn to look for the permanent in the mutable and fleeting; let him learn to bear the disappearance of things he was wont to reverence; without losing his reverence; let him learn that he is here, not to work, but to be worked upon; and that, though abyss open under abyss, and opinion displace opinion, all are at last contained in the Eternal Cause.”
—Ralph Waldo Emerson (1803–1882)
“I think it’s unfair for people to try to make successful blacks feel guilty for not feeling guilty.... We’re unique in that we’re not supposed to enjoy the things we’ve worked so hard for.”
—Patricia Grayson, African American administrator. As quoted in Time magazine, p. 59 (March 13, 1989)