Performance fees use three methodologies. You can set up a performance fee expense with Performance Fee Rule Type set to Current Period Variable Expense.
When you use this methodology, you perform the following general types of tasks:
- Set Up Performance Fee Rules. You set Fee Approval to AutoApprove. For more information, see Manage Performance Fee Rules.
- Set Up Performance Fee Expenses. If you select a NAV Component of Average Net Assets, you can specify the Rolling Avg Net Asset Calculation option of Actual or Estimates. For more information, see Manage Performance Fee Expenses.
- Add and Update Performance Returns for Funds and Benchmarks. Current Period performance fees need return data from the previous accounting date. For information, see Manage Performance and Benchmark Data.
- Calculate NAV Component. For performance fees that use a NAV component of Average Net assets, you must calculate average net assets at the end of each day to ensure up to date average net assets are available for the calculation of performance fees. For more information, see Manage Average Net Assets for Performance Fees. For performance fees that use a NAV component of User Defined, you must input external NAVs. You can also override and adjust NAVs calculated for average net assets. For more information, see Manage NAV Overrides and Adjustments for Performance Fees.
- Calculate Performance Fee Amounts. You calculate performance fee activity at the beginning of each calculation period. For more information, see Calculate Performance Fee Activity. Fees for Current Period Variable Expense rule types do not need approval. However you can review calculated fees prior to posting.
- Process Expense Accruals. You can run accruals manually, schedule them, and/or use Automated Event Wrapper to run them.
For a detailed example of the workflow used for this method, see Current Period Variable Expense Performance Fee Workflow Example.
WRITERS NOTE: if you use NAV Component of User Defined, do you have to input NAVs every day?
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