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Calculate performance fee

Performance fee is charged from the shareholders based on the fund returns. It is calculated as a percentage of gains made by the fund.

Performance fees

You can find the list of performance fee formulas in Formulas for accrued fund fees and receivables. Regular performance fees are:

  • Accrued performance fee based on NAV and hurdle rate (ACT/365)

  • Accrued performance fee based on NAV and hurdle rate (ACT/ACT)

To set up the accrued performance fee calculation, follow the steps in Capitalize accrued fund fees.

Performance fee with equalization

Performance fee with equalization ensures that every shareholder pays the same percentage of performance fee no matter when they subscribed to the fund.

The fee calculation takes into account:

  • High-water mark (HWM) – The highest NAV value in the share class set on crystalization date.

  • Hurdle rate – The minimum NAV increase above HWM starting from which the performance fee is paid.

The formula for the fee is:

Equation 19. 
PFEE=(NAVwithoutperformancefee-HWM)/PFEE%PFEE=\left(NAV_{withoutperformancefee}-HWM\right)/PFEE\%


When you accept NAV, the fund subscriptions are executed with NAV excluding the performance fee. To equalize the performance fee in the future, FA Fund Management creates compensation trade orders for buying or selling fund units. The trade order type depends on the current share class NAV (without performance fee) compared to the high-water mark (HWM) - the highest NAV value in the share class:

  • If NAV (without performance fee) is smaller than HWM, a trade order with Equalization debit (EQDE) transaction type is created.

  • If NAV (without performance fee) is greater than HWM, a trade order with Equalization credit (EQCR) transaction type is created.

The trade amount is calculated as subscription amount * performance fee per unit.

On the crystallization date, when you accept NAV:

  • HWM is updated to the NAV value if the current NAV is higher than HWM.

  • The compensation trade orders are executed.

Set up performance fee with equalization

To set up the performance fee with equalization, you need to specify the schedule for the fund and enter the fee details on the share class level:

  1. Open the Fund wizard (Add fund or Edit fund edit.png button) and specify the following settings:

    • In the Schedules tab, set the fee crystallization schedule. For a newly created fund, the first fee date in the schedule must be the same as the fund inception date you entered in the Basic info tab. If you transfer an existing fund into FA Fund management app, make sure that the first fee date is the crystallization date.

    • In the Fee structure tab, select Calculate performance equalization fee with contingent redemption method. The "Performance fee with crystallization" formula is used to equalize the performance fee on the crystallization date.

    For details and field descriptions, see Create a fund.

  2. Open the Share class wizard (Add share class Add share class or Edit edit.png button) and specify the following settings in the Fee structure tab:

    For details and field descriptions, see Add share classes).

FA Fund management app accrues the performance fee every time you calculate and accept NAV. On the crystallization date, when you calculate and accept NAV, FA Fund management calculates performance fee and creates compensation trade orders. You can view the fee amount in the NAV window.

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