3.38.1.2 Equalization Credit

This topic provides information on equalization credit.

The equalization credit method is an arithmetic method applied to subscriptions made at a price (GAVPS) above the current HWM plus hurdle rate.

The equalization credit process ensures that the investor does not pay performance fees for performance prior to investing in the fund. This process calculates a number of shares, identified as the equalization credit holding, in the name of the investor, and is tracked during the life-time of the dealing lot.