Understanding the High-Water Mark
The High-Water Mark is a fair and transparent method used to calculate performance-based fees. It ensures that you only pay fees on new profits – not on losses or repeated gains.
How It Works
Let's say you invest $500,000. After one month, your account grows to $575,000 – a $75,000 profit. A performance fee is applied to that profit only (e.g., 20% of $75,000 = $15,000).
In the next month, your account drops to $460,000. No fee is charged on any recovery up to the previous high ($575,000). You only pay a performance fee again if the value exceeds that mark.
This protects you from paying double fees and aligns our success with yours. Only new profits beyond your previous peak are considered for performance fees.