Definition: A compensation structure in which investment managers earn a percentage of the profits generated for investors, commonly used in hedge funds and private equity funds.
Example: A hedge fund grows from $10 million to $11 million, generating a $1 million profit. If the fund charges a 20% performance fee, the manager receives $200,000.
Explore IVP Shadow Accounting Services
IVP Shadow Accounting Services help buy-side firms accurately calculate and validate performance fee accruals as part of NAV oversight. The service enables hedge funds and asset managers to seamlessly outsource full or partial accounting functions, improving operational efficiency and scalability while supporting a variety of fund structures and accounting platforms.
