ESMA_QA_2174
Status: ✅ Answer Published
Link to ESMA Q&A tool: https://www.esma.europa.eu/publications-data/questions-answers/2174
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: Performance fees
Question
Submission Date: 08 May 2024
Where a manager applies an additional reference indicator to the performance fee model (e.g.: a hurdle rate on top of the High-Water Mark model or the benchmark model), should the minimum performance reference period be applied to the additional reference indicator?
ESMA Answer
Answer Date: 24-05-2024
The minimum performance reference period in accordance with paragraph 40-42 of the Guidelines should be applied to the performance fee model. However, the manager is not required to apply the minimum performance reference period to the additional reference indicator, considering that (a) the final combination (i.e.: the performance fee model plus the additional reference indicator) does not result in increased fees for investors compared to the use of the performance fee model alone and (b) the performance fee model (excluding the additional reference indicator) is consistent with the fund’s investment objectives, strategy and policy, in line with Guideline 2. In line with paragraph 46 of guidelines, appropriate disclosure should be provided in the prospectus.
This document was automatically extracted from the ESMA EMIR Q&A database.