incentive fee

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Incentive fee

Compensation paid to commodities trading advisers or to any practitioner who achieves above-average returns. Sometimes called performance fee.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.)
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

incentive fee

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
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You may wish to discuss some sort of performance-based fee in addition to the fee placed on asset and portfolio management.
"An additional attraction for all qualified investors will be the fund's performance-based fee structure.
respondents to Fulbright & Jaworski's survey, 60 percent of them rated the performance-based fee to be the most effective AFA.
An impressive new cash management system, the wealth management industry's first performance-based fee and the concept of private funding circles are just three such innovations that stand to significantly set the new team apart.
And they can make better than billable hour profits by proposing performance-based fee structures and leading these engagements with clients.
A performance-based fee structure is an incentive for the fund manager to perform.
is the only investment company offering such a performance-based fee, although some hedge funds and alternative investors use similar systems.
* Allocate favorable cross-trade opportunities (and the transaction cost savings associated with such cross-trades) to favored client accounts (e.g., those with a performance-based fee arrangement with the manager), to increase the manager's fees or demonstrate superior investment performance;
* Performance-based fee, tied to the profitability of the client's invested assets.
The performance-based fee approach aims to create better outcomes for investors by aligning their interests with the asset manager.
OTS generates revenues from recurring management fees and performance-based fees for the funds and products that it manages.

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