Fulcrum Fee

Fulcrum Fee

A fee than an investment adviser may charge a client if the return on a portfolio exceeds some agreed-upon benchmark. A fulcrum fee is one the few performance-based fees than an investment adviser may assess; one cannot charge it to small investors, only to institutional investors and high net-worth individuals.
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For the performance fee, managers of traditional asset classes often design a fulcrum fee that centers on the expected return, which is preferably an "alpha" return over the benchmark for that strategy--for instance, "benchmark plus 200 basis points.
The policy provides specific guidance to investment managers and staff regarding the preferred structure of fulcrum fees (fees centered on a target, or "fulcrum," performance level, which are increased or decreased for better or worse performance) and performance fees (additional, performance-based fees paid when an investment manager achieves an investment return that beats a specified benchmark).
Such a free contracting environment is in stark contrast with the experience of the United States where an invasive regulation, permitting only fulcrum fee provisions, has driven almost all managers toward compensation schemes based exclusively on management fees.
With fulcrum fees, a manager who outperforms the hurdle variable receives a proportion of the positive differential, while they suffer a symmetrical deduction from the management fee in the case of underperformance.
5 million in 2008, mainly on increased fulcrum fee revenue of $14.
5 million in fulcrum fee revenue during 2009 and $2.
As of June 30, 2008, incentive and fulcrum fee assets were $3.
As of March 31, 2008, incentive and fulcrum fee assets were $3.
As of March 31, 2007, incentive and fulcrum fee assets were $3.
Known in the industry as a fulcrum fee, the sub-advisors will receive a management fee that will be increased or decreased, depending on whether their individual performance exceeds or lags the fund's benchmark; in this case, the Russell 2000 Value Index.
As previously discussed in our third quarter 2005 earnings press release, fourth quarter 2005 operating profit was expected to decrease from the fourth quarter 2004 due to lower income from management fees earned on preferred shares issued by our closed-end funds and fulcrum fees from institutional accounts.