Due Diligence FAQs
How should the performance fees or carried interest be calculated?
These fees should reflect the long-term performance of the fund and should only be realized when the performance exceeds an established and constant high-watermark or hurdle rate.
Anything else is probably too generous for a manager and may lead to a lack of intent towards better performance, especially when management fees are high or large due to amounts of assets under management, which benefits the manager but not the investor.
Still need help? Get in touch