BENCHMARKING PERFORMANCE FEES

10th Edition December 2010

Unique data on performance fees for 3,296 funds enabling traditional and hedge funds to benchmark each element of their performance fee structure with competitors, as well as in-depth discussion and analysis of all issues involved.
8. PERFORMANCE FEE RATES The performance fee rate is the rate which, when applied to the basis of calculation, determines the level of performance fees to be paid. To be comparable, performance fee rates have to be shown in relation to the basis of calculation. Our sample includes 2,819 funds with straight performance fee rates. Structures with sliding scales are not included here but are studied in detail in Section 10.6. To further cross-reference by condition (absolute or relative), basis of calculation, asset class, domicile, etc., please refer to the database - Box 5. 8.1. Performance fee rates: Raw performance basis Raw performance fee rate split by asset class
Asset class Alternative Investment Bonds Cash/Short-Term Equities Fund of Funds Fund of Hedge Funds Mixed Equities/Bonds Other All Asset Classes Min x.xx% x.xx% x.xx% x.xx% x.xx% x.xx% x.xx% x.xx% x.xx% Max x.xx% x.xx% x.xx% x.xx% x.xx% x.xx% x.xx% x.xx% x.xx% Average x.xx% x.xx% x.xx% x.xx% x.xx% x.xx% x.xx% x.xx% x.xx%
25% %

UNIQUE AND COMPRHENSIVE FEE & EXPENSE Lippers fees and expenses research is unrivalled globally and recognised as the European industry standard. Lipper offers unique and independent data to support fund managers and associated organisations. Lipper is commited to providing impartial, reliable and authoritative analysis enabling fund professionals to assess and compare their competitive positioning

ESSENTIAL INFORMATION

Std. Dev. x.xx% x.xx% x.xx% x.xx% x.xx% x.xx% x.xx% x.xx% x.xx% Sample size xx xx xx xx xx xx xx xx xx

Consistent and independent data: report provides analysis on performance fee structures for fund domiciled across all major European and Offshore markets. Makes each fee structure comparable by breaking them down in terms of conditions for payment (i.e. when the fund is eligible for a performance fee), basis of calculation (i.e. the basis to which the performance fee rate applies) and performance fee rates Presents in detail each funds performance fee structure. This includes fee caps, benchmark compositions, hurdle rate, high water mark, claw back mechanism, equalisation system, accrual frequency and crystallisation frequency Analyses links between incentive fee structures and fund performance Revenue uplift calculator: enables the user to simulate potential future revenues from different performance fee structures at individual fund level, depending on future market return and fund performance CD: allows full manipulation of underlying data, presented at both share class and fund levels

0% Alternative Investment Bonds Cash/Short-Term Equities Fund of Funds Fund of Hedge Funds Mixed Equities/Bonds Other All Asset Classes

5%

10%

15%

20%

30%

35%

40%

45%

50%

Performance fee rates depending on the basis of calculation

BENCHMARKING PERFORMANCE FEES

10TH EDITION DECEMBER 2010

DETAILED REPORT HIGHLIGHTING ALL THE ISSUES INVOLVED IN PERFORMANCE FEE STRUCTURE
SUMMARY OF CONTENTS

WHO IS IT FOR?

Justication of performance fees How is risk integrated within the fund performance Relationship between risk and fund performance Performance measured adjusted for risk Fund performance and performance incentives Data sample Final data sample: breakdown by asset class
Which performance fee rate will maximise the funds performance?

Essential for fund promoters considering the introduction of performance fees, in order to assess the potential benets and determine the most appropriate mechanism for their own fund ranges. Promoters of hedge and other funds with existing performance fee structures will nd the report useful in order to benchmark their current structures against those of competitors.
COVERAGE

Methodology Performance fees checklist

Conditions for payment of performance fee Absolute condition Relative condition Combined condition Basis for performance fee calculation Raw performance Net performance Positive net performance Total Net Assets Performance fee rates Rate /raw performance basis Rate /net performance basis Rate /total net assets basis Raw performance vs net performance Sliding performance fee scales Performance fee calculation frequency Reference benchmarks Index-related benchmarks Hurdle rates Factor High water mark Claw back mechanism Performance fee caps and minimum fees Focus on alternative investment funds Averages by domicile and asset class Peer group comparisons General issues Legal framework Regulatory situation in the US Regulatory situation in the UK Regulatory situation in Europe and the rest of the world Case studies Potential impact of performance fees on company revenues
CD-ROM
Revenue uplift Calculator

Report analyses 3,236 performance fee structures accross 23 domiciles 20 asset classes 480 promoters
Claw back mechanism

MS Access database (individual fund data, revenue uplift calculator, easy-to-use preformatted queries) MS Excel Spreadsheet containing the Fund Data table and eld descripions at both fund and share class level PDF versions of the individual fund data and an index of funds

BENCHMARKING PERFORMANCE FEES

10TH EDITION DECEMBER 2010

BENCHMARKING PERFORMANCE FEE ORDER FORM

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