Hedge funds - HURDLE RATE &Performance fees

For students keen to join the growing fund accounting industry, the common doubt that arises is "Performance FEES: Lets learn more on this now!

[@tulajappal7591]

Tq ma'am keep posting👍🙏

[@sumanbanerjee4071]

As always very much informative!

[@sushilahariharan]

Thanks yaar for your kind words 🙏

[@mehtasmit3569]

Thank you 👍

[@mohammedibrahim-enabler9277]

Thanks for the video, much appreciated. General feedback HWM concept and Performance Fee deduction not included in this example, hence actual calculation may vary. 4th year calc not correct.

[@sushilahariharan]

Great suggestion!

[@sandeshkumar9156]

But HWM is Highest investment value the fund has reached ryt? So how come Hurdle rate is calculated on previous year NAV in Y4 scenario? Should it not be based on 150? Please clarify!

[@ndon85]

hello thank you, how about compound hurdle rate, how does it work? appreciated!

[@nilasishkar6708]

This is perfect

[@sushilahariharan]

Thank you 🙏

[@jayaprakashjp6845]

Precise video 👍
Keep going 👍
Expecting video on how the clawback provision is applicable to the fund and this is one of the recent interview question on demand

[@sushilahariharan]

Sure 👍

[@SushovanAta-nn4rn]

was amazed they asked clawback syndrome . because it's technically asked to very experience person in hedge fund. correct me if i am wrong.

[@mainakghosh491]

Thank You Mam, but would be more helpful if you could make a post explaining how performance fee is calculated considering both HWM and Hurdle rate

[@sushilahariharan]

Great suggestion
Thanks

[@debuprasad4212]

Can you please mention which book specifically for private equity.

[@padalarakesh2068]

Till Y3 it is clear but how come 143 in Y4, since the last best NAV is 150 only, even if it is simple hurdle it should be 165 ( 150*10%=15, (15+150). Correct me if I'm wrong.

[@user-tb2ju8cb5f]

Is there any difference between carried interest and performance fee

[@jencyvincent5435]

Mam could please teach us how this PF accruals are booked in ledger and what would be the entries during crystallization

[@sushilahariharan]

Let me try Jency

[@DavidCasey-qs3jy]

Great video content, can you recommend any good book on fund accounting please?

[@sushilahariharan]

Thank you for your kind words

[@rajeshreddy2879]

Great explanation. Can u exaplain private equity fees as well please ?

[@sushilahariharan]

I already uploaded video on carried interest on my TH-cam channel. Take a look at that

[@rajeshreddy2879]

@@sushilahariharan so Private Equity firms don't charge management & incentive fees? Only carried interest?

[@rajeshreddy2879]

Eagerly waiting for HWM video 🙂🙏

[@sushilahariharan]

Yes.. another very complex topic na?? Will tag you once it's ready

[@RamanathanPL-sb7kr]

Will both HWM and Hurdles be there in the fee structure for the same year?

[@prabhakarmourya3106]

Mam
I have 1 question
In year 4 you have calculated hurdle on 130 but I think it should be calculated on 150 because in year 3 aur NAV decreased and in that case we will not reduce aur HWM, we will go with 150
Mam, Please correct me if I am wrong

[@sushilahariharan]

Thank you for your comment.
You are right @Prabhakar. The reason I did the calculations this way was to highlight the calculations of hurdle rate without HWM.
If we do both HWM and hurdle rate then we will identify the HWM and no need to calculate next hurdle!

[@natureloverhr5140]

Mind-blowing explanation

[@rajeshreddy2879]

Mam is carried interest, incentive fee, performance fee all 3 are same?

[@sushilahariharan]

Yes..just different techniques of incentive fee distribution