Fulcrum Fee

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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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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).
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.
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.
Since then, only a handful of US managers have been brave enough to adopt fulcrum fees.
Fulcrum fees would, in that instance, be much more effective than bonus plans.
6 million of the revenue in the fourth quarter 2009 was from incentive and fulcrum fees versus none in the 2008 period.
5 million in 2008, mainly on increased fulcrum fee revenue of $14.
We receive incentive and fulcrum fees for certain institutional client assets as well as for preferred issues for our closed-end funds, fulcrum fees for the Gabelli Global Deal Fund (NYSE: GDL) common shares, and incentive fees for investment partnership assets.
We receive incentive and fulcrum fees for our investment partnership assets, certain institutional client assets as well as preferred issues for our closed-end funds.
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.
The fulcrum fee based fund raised gross proceeds of $425 million.