High-Water-Mark Performance Fee

Calculator · CC-BY-4.0

Performance fee earned only when current NAV exceeds the prior high-water mark, restricting fee accrual to genuine new gains.

Details

• category: Fees & Structure
• 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)
• related terms: high-water-mark, performance-fee, two-and-twenty

Formula

Fee_t = max(0, perf_rate × (NAV_t - HWM_{t-1}))