Performance fees: oversight controls - Case analysis

Performance fees are a well known mechanism used as an incentive to reward the Investment Manager for taking performant investment decisions. However, this remains a complex mechanism, using a wide range of key elements and methods. Each single investment fund has some specific calculation criteria, and the new ESMA guidelines on performance fees have also introduced some key rules to the calculation process. All these elements increase the likelihood of errors.

PwC's Academy is pleased to offer a training workshop presenting concrete examples of CSSF 02/77 NAV errors and mistakes linked to the Performance Fees application. It is dedicated to people who already have a good background on the performance fees key concepts and calculation methods.

By the end of this course, participants will be able to:

• assess whether the calculation method leads to a high likelihood of error;
• develop a better understanding of the key elements to be taken into consideration during their review of the calculation file;
• focus on the consistency between the calculation methodology as described in the prospectus of the fund and the actual performance fees calculation file;
• distinguish the most usual errors based on the market analysis.

• Case studies: performance fees calculation files of different Luxembourgish market actors who have faced a CSSF 02/77 NAV error situation
• Analysis of the error, calculation of the impact and controls put in place to avoid similar issue in the future

This training will be coordinated by Frédéric Botteman, Partner, PwC Luxembourg. It will be animated by specialists of PwC Luxembourg working on performance fees issues on a daily basis.

Frédéric, Audit Partner, is specialised in the valuation of derivatives and illiquid securities. Thanks to this, he has gained a high expertise in the audit of guaranteed funds. Frédéric has developed a strong fund audit experience and is member of the experts' team in the area of circular CSSF 2002/77 requirements: he is instructor in several courses linked to this topic and to derivative instruments.

He is also leading several SRI reporting for major IM players.