performance fee

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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.)

performance fee

A fee paid to an investment manager based on the performance of a client's portfolio, determined by a specified standard. For example, an investment manager might be paid a regular fixed fee plus an incentive fee based on the change in value of the client's portfolio. Also called incentive fee.
References in periodicals archive ?
Global Banking News-March 14, 2018--Irish central bank to probe UCITS performance fee practices
The magazine alleges that Dion's demands - including a performance fee of $218,500 in addition to expenses for a 160-member entourage - proved too expensive for the organizers.
Adjusted operating profits for the six months to 30 June 2017 were GBP 36m, of which GBP 17m were performance fee related.
Four Members of the House of Representatives and one Senator have joined as co-sponsors of a bipartisan resolution that opposes "any new performance fee, tax, royalty, or other charge" on local broadcast radio stations.
When should fulcrum fees (1) be preferred over flat fees or other performance fee structures?
A decade ago, hedge funds typically offered investors a Hobson's Choice; pay a 2% management fee and a 20% performance fee -- or scat.
The days a traditional investment advisor could charge 30% performance fee is now over,” said Ben Venier Chief Trader at iFexx.
The GP's primary objective is to earn two types of fees: a fixed (management) fee and a performance fee, frequently referred to as a "2/20" compensation structure.
They are very kindly donating their performance fee back into Michael's Velindre fundraising total.
US ROCK star Jon Bon Jovi and his band are waiving their performance fee for a concert in Madrid as a gesture to their Spanish fans hit by the country's economic crisis.
For three consecutive years, the report adds, the number of new funds reporting a hike in their performance fee outnumbered those cutting theirs.
Investors who meet the net worth or asset threshold are deemed to be 'qualified clients,' able to bear the risks associated with performance fee arrangements.

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