Manage Average Net Assets for Performance Fees

You can set up performance fees with a NAV component of either Average Net Assets or User Defined, If you select Average Net Assets as the underlying NAV component, the performance fee accruals need an underlying NAV component of average net assets available for up to a five year period.

The system calculates the average net asset amount at the end of the day in order to have the underlying NAV component available to calculate performance fees at the beginning of the next accounting date. As part of the performance fee calculation workflow, you need to execute the transfer average net assets batch event before you trigger the performance fee accrual process. You can perform the transfer manually or automatically.

You can use the Transfer Average Net Assets - Batch panel/event to calculate three year and five year average net assets for use with performance fees. When you use this panel/event, the system determines if a performance fee rule is present for the begin date specified. If a performance fee rule is present, the system determines the date range specified by the performance fee setup to calculate the average net asset amount.

The event can calculate a period to date total net asset amount and period to date total day count. Based off these stored values and the performance fee setup, the system can calculate the correct average net asset amount.