Both Money Managers and Investors need to know the definitions of the offer types and the fees relating to them before creating an offer or accepting it.
Performance Fee
Money Managers with various trading knowledge are able to apply this fee type. By applying this fee type, the Money Manager can gain a set percentage of the income. This fee can be set up in layers, with each profit percentage costing a different fee.
In the below example, a profit return between 0% and 25% will cost the Investor 13%. If more profit return is generated, this will cost the Investor 18%.
Management Fee
Money Managers are able to charge this fee for handling an Investor's funds and trading them. This fee type, known as the Management fee is dependant on the equity provided by the Investor. It can be charged either in currency form or as a percentage. Usually, the fee value for this fee type is decreased the higher the investment an Investor makes. This fee type can be layered as well.
In the below example, if the Investor deposits between $0 to $750, a 12% fee is asked for. If the investor deposits more than $750, the fee would result in 7%.
Deposit Fee
A deposit Fee is set in place for each time an Investor adds funds into a fund. This would include the first investment made in the fund.
In the below example, if the Investor deposits between $0 to $20,000, the Money Manager claims a 25% deposit fee. Should the Investor deposit more than $20,000, the fee would be 15.