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Performance fees differ from other expense types in that they are associated with a rolling performance period and a rolling average NAV component. Other types of expenses usually have one open ended period, and use a prior day NAV based component. For example, a regular variable expense accrues daily, until you close the fee. Every day, the variable expense looks up the prior day NAV, multiples it by a tiered rate, and posts the result as the fee. In contrast, a variable performance fee has many consecutive rules, each spanning a single performance period. For every day in the rule, it calculates an average NAV for the current period. It multiplies the average NAV by a performance rate, and posts the result as the fee. The system automatically creates the next period rule created on the last day of the current period fee rule. You must close the latest fee rule in order to stop the fee.
Type of Performance Fees
Eagle's expense processing allows you to calculate three types of performance fees:
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