Hedge fund AlphaBeta has a NAV of $1 million and a zero balance in its cumulative loss

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Hedge fund AlphaBeta has a NAV of $1 million and a zero balance in its cumulative loss account on January 1, 2016.

Now suppose AlphaBeta’s annual performance (net of management fees) is + 13.9% in 2016, +12.6% in 2017, and -19.1% in 2018.

AlphaBeta charges a 20% performance fee. Based on the high water mark reached in 2017, what minimum percentage gain does the fund nee d to achieve in 2019 before performance fees can be taken again?

Related Book For answer-question

Financial Accounting

ISBN: 978-0134127620

11th edition

Authors: Walter Harrison, Charles Horngren, William Thomas, Wendy Tietz

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Posted Date: Dec 31, 2020 10:02 AM

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Hedge fund AlphaBeta has a NAV of $1 million and a zero balance in its cumulative loss

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Financial Accounting

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