Fulcrum Fee Clause Samples
The Fulcrum Fee clause defines a performance-based compensation structure, typically used in investment management agreements. Under this clause, the manager's fee adjusts upward or downward based on the investment returns relative to a specified benchmark or hurdle rate. For example, if the portfolio outperforms the benchmark, the manager earns a higher fee, while underperformance results in a reduced fee. This structure aligns the manager's incentives with the client's investment goals and helps ensure that fees reflect actual performance, thereby addressing concerns about paying high fees regardless of results.
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Fulcrum Fee. The Performance Fee is added to or subtracted from the Base Fee ("BF") to equal the Fulcrum Fee (“FF”). Formula: FF = BF +/- PF
Fulcrum Fee. As full compensation for the services provided, facilities furnished and expenses paid by the Adviser under this Agreement, the Fund agrees to pay the Adviser an annual investment advisory fee, which increases and decreases proportionately based on the investment performance of the Fund in relation to the investment record of the CS First Boston High Yield Index/TM/ (the "Index"). The advisory fee shall be accrued at least weekly and paid quarterly as soon as practicable after the end of each calendar quarter, as follows:
(i) If the Fund's investment performance for the twelve months immediately preceding the end of the quarter is equivalent to the investment record of the Index for the same 12-month period, then the advisory fee shall be computed at the annual rate of 0.90% of the Fund's average net assets. The rate at which the advisory fee is computed shall be increased or decreased from the 0.90% fulcrum fee by 10% of the amount by which the investment performance of the Fund exceeds or is less than the investment record of the Index, up to a maximum of 1.40% and down to a minimum of 0.40%. For purposes of calculating the amount of the advisory fee, the Fund's average net assets shall be determined by taking the average of all determinations of such net assets during the applicable 12-month period. The investment performance of the Fund and the investment record of the Index shall be determined in accordance with the Advisers Act and the rules and regulations promulgated thereunder.
(ii) The compensation payable to the Adviser after the end of each quarter shall be equal to the amount of the annual advisory fee calculated as provided in sub-paragraph (i) above reduced by the compensation previously paid by the Fund to the Adviser and/or to Pacholder & Company in respect of the applicable 12-month period. In the event that such prior payments should exceed the amount of the annual advisory fee payable hereunder, the Adviser shall remit to the Fund such excess as soon as practicable after the end of the quarter.
Fulcrum Fee. The Performance Fee is added to or subtracted from the Base Fee to equal the Fulcrum Fee (“FF”).