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Performance fees can be charged and collected to investors according to the strategy provider’s request from 0% up to 50%.
This performance fee is calculated by a method called high watermark method (HWM).
For example, it is assumed that the strategy provider operates with the following performance results and the performance fee setting is 20%.
January Operating Results $ 10,000
February Operating Results $ 15,000
March Operating Results $ 13,000
April Operating Accumulators $ 20,000
May Operating Results $ 18,000
June Operating Results $ 23,000
As the investment performance began in January and the first month was an investment performance of $ 10,000, it is 20% at the beginning of February from investors saying that they have renewed the highest performance with an investment performance of $ 10,000 from the beginning of January to the end of January You can collect dollar management fees.
Since the February performance has been updated in January, it is possible for the investor to collect 20% of the $ 3,000 management fee at the beginning of March, assuming that the best performance has been updated.
In March, the performance fee for February (management fee) will not be because it was not possible to update the investment performance for February.
In April, we updated $ 15,000 in February and updated it to $ 20,000, so if we update the top, we may have to collect $ 20,000, 20% of $ 20,000 at the beginning of May from investors. can.
In May, because it was not possible to renew the April best results again, there will be no performance fee (management fee) for May.
In June, with an investment performance of $ 23,000, the record highs have been renewed, so at the beginning of July, 20% of $ 23,000 and $ 4,600 can be collected as management fees from investors.