ESMA_QA_1032

Status: ✅ Answer Published

Link to ESMA Q&A tool: https://www.esma.europa.eu/publications-data/questions-answers/1032

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Regulatory Context

Regulation : AIFMD

Level 1 Regulation: Alternative Investment Fund Managers Directive (AIFMD) Directive 2011/61/EU

Level 2 Regulation: No information available

Level 3 Regulation: No information available

Topic: Costs and fees

Subject Matter: ESMA’s guidelines on performance fees in UCITS and certain types of AIFs

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Question

Submission Date: 16 July 2021

In case the authorised AIFM has delegated the portfolio management function to different delegated portfolio managers, would it be admissible to pay a performance fee to those delegated portfolio managers who have overperformed during the performance reference period, despite a global underperformance of the fund during the same performance reference period?

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ESMA Answer

Answer Date: 16-07-2021

[ESMA 34-32-352 AIFMD Q&A, Section 15, 7] No. Based on paragraph 37 of the guidelines, performance fees:

should be paid only where positive performance has been accrued during the performance reference period; could be paid in case the fund has overperformed the reference benchmark but had a negative performance.

The above also applies in case of delegation by the authorised AIFM to different delegated portfolio managers. Therefore, in case of a global underperformance of the fund, performance fees should not be paid to those delegated portfolio managers who have overperformed.

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This document was automatically extracted from the ESMA EMIR Q&A database.