ESMA Issues guidance on performance fees in Investment
Funds
In November 2020, ESMA published its "Guidance on
performance fees in investment funds – applicable to
undertakings for Collective Investment in Transferable Securities
(UCITS) and certain types of Alternative Investment Funds
(AIFs)" (hereinafter referred to as the
"Guidelines"). Keeping in mind the best interest of
investors, and for the purposes of ensuring that applicable
performance methodologies are implemented in a harmonised manner,
the Malta Financial Services Authority
(MFSA), in January 2021 published its updated Investment Services Rulebooks.
Through these new Guidelines, when designing performance fee
models, fund managers are provided with a comprehensive list of
principles, thereby being better placed to assess the consistency
between performance fee models, and a fund's investment objectives, policies, and
strategies. The Guidelines provide a performance fee calculation
method with the
