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.
References in periodicals archive ?
While some have viewed a fulcrum fee as an incentive for managers to take bigger risks, that's less of a concern in ETFs, where investors have neither paid huge sales loads nor are they potentially saddled with redemption fees.
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.
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.
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.
When should fulcrum fees (1) be preferred over flat fees or other performance fee structures?
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.