incentive fee

(redirected from Performance Based Fees)

Incentive fee

Compensation paid to commodities trading advisers or to any practitioner who achieves above-average returns. Sometimes called performance fee.

Incentive Fee

A fee paid to an asset manager or other investment adviser whose investment decisions perform particularly well. When an asset manager makes money for clients, he/she also makes money for the company for which he/she works. These companies offer incentive fees in order to encourage wise (and profitable) investments. Incentive fees usually come out of the portfolios that do well, rather than out of the company's general funds. They are also called performance fees. See also: Bonus, Manager Universe (Benchmark.)

incentive fee

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