ESMA Guidelines On Performance Fees

The European Securities and Markets Authority ("ESMA") publishedits final report on the guidelines on performance fees in UCITS and certain types of AIFs on 3 April 2020 (the "ESMA Guidelines").

ESMA Guidelines apply to self-managed or to the investment fund managers of UCITS and open-ended AIFs that are market to retail investors in accordance with article 43 of the AIFMD, except for EuVECAs, venture capital AIFs, EuSEFs, private equity AIFs or real estate AIFs.

ESMA Guidelines promote harmonisation on 5 specific areas:

1. Performance fee calculation method

It shall include, at least, the following elements:

a) the reference indicator to measure the relative performance of the fund;