ESMA · ESMA_QA_672 Answer Published
Performance fees
- Regulation
- Alternative Investment Fund Managers Directive (AIFMD) Directive 2011/61/EU
- Article
- Section XV: ESMA’s guidelines on performance fees in UCITS and certain types of AIFs
- Topic
- Costs and fees
- Submitted
- 2023-02-02
- Answered
- 2021-07-16
Question
Question 7 [last update 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?
Answer
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.
This Q&A is published by European Securities and Markets Authority and is non-binding. It does not constitute legal advice. Updated weekly from official ESA sources.
Similar Q&As
More Q&As on this topic
📋 Track EU financial regulation continuously
Forseti monitors EU financial regulation and delivers personalised alerts anchored to verified official sources.
14-day free trial. No credit card required.