GIPS2020 Term – Clawback

#7 Clawback

'CLAWBACK: The payback of previously earned ...FEES because of subsequent underperformance.' Click to Tweet

Full Definition

This term is defined as The repayment of previously earned PERFORMANCE-BASED FEES resulting from subsequent underperformance.” in the GIPS 2020 Exposure Draft.

Key Points about This Term

  1. This term is new in the GIPS although it is a common practice in the investment industry, particularly in the alternative investments sector.
  2. Fun Fact – It appears five (5) times in the Exposure Draft, including that in the definitions section.
  3. Possible Evolution under new Standards – Here to stay as it has even been further consolidated as a required disclosure when providing a Performance-Based Fee Description.

One Comment

  1. […] earned by the FIRM or ASSET OWNER and can no longer be reversed under the terms of a CLAWBACK provision. […]

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