{
  "slug": "high-water-mark-perf-fee",
  "name": "High-Water-Mark Performance Fee",
  "category": "Fees & Structure",
  "description": "Performance fee earned only when current NAV exceeds the prior high-water mark, restricting fee accrual to genuine new gains.",
  "formula": "Fee_t = max(0, perf_rate × (NAV_t - HWM_{t-1}))",
  "formula_latex": "\\text{Fee}_t = \\max\\big(0,\\ p \\cdot (\\text{NAV}_t - \\text{HWM}_{t-1})\\big)",
  "parameters": [
    {
      "name": "Current NAV",
      "symbol": "NAV_t",
      "type": "number",
      "default": 1.1
    },
    {
      "name": "Prior high-water mark",
      "symbol": "HWM",
      "type": "number",
      "default": 1.05
    },
    {
      "name": "Performance fee rate",
      "symbol": "p",
      "type": "percent",
      "default": 0.2
    }
  ],
  "outputs": [
    {
      "name": "Performance fee",
      "symbol": "Fee",
      "type": "number"
    },
    {
      "name": "New HWM",
      "symbol": "HWM_t",
      "type": "number"
    }
  ],
  "worked_example": {
    "inputs": {
      "NAV_t": 1.1,
      "HWM": 1.05,
      "p": 0.2
    },
    "expected_outputs": {
      "fee": 0.01,
      "new_hwm": 1.1
    }
  },
  "related_terms": [
    "high-water-mark",
    "performance-fee",
    "two-and-twenty"
  ]
}