Below is an example how Airgead Calpa Partner´s performance fees are calculated and charged .
|1st of Jan||1st of Feb||1st of Mar||1st of Apr|
|Net Asset Value (NAV)||$100,000||$100,000||$104,000||$117,000|
|NAV After Performance Fee||$100,000||$107,000||$104,000||$115,000|
The above example assumes that £100,000 was invested. If the managed account had achieved a return of 10% for the month, your account would now be £110,000 for that month. The performance fee for the first month would be calculated on the profit. The performance fee is 30%, therefore £3,000 is charged to the account. That now leaves the high-water mark at £107,000.
If in the second month of trading, the managed account made a net loss of £3,000, there would be no performance fee paid. However, the high-water mark would remain at £107,000 as this remains the highest level after a performance fee has been taken.
In the third month the Managed Account returned to profitability, and returned £13,000 for the quarter, the balance would now be at £117,000. However, since the high-water mark is at £107,000, the performance fee is only charged on the profit above the high water mark. (i.e. 30% of £10,000 instead of 30% of £13,000).