Understanding Hedge Fund Fees: Implications for Hedge Fund Managers

K&L GATES EQUALIZATION ACCOUNTING (CONT.) Because equalization needs to "remember" the issue price of Shares issued at a NAV reduced by an accrued Performance Fee during Performance Fee calculation periods, equalization really is very much monthly series accounting. Monthly series "remember" the issue price of all Shares, because monthly series calculate the Performance Fee separately with regard to each series. Equalization calculates the Performance Fees paid on the New Shares separately from that paid on other Shares, but rather than having monthly series "remember" the issue price of New Shares restates the number of Shares held so that all Shares maintain the same NAV. klgates.com 30 50

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