#9 Crystallization Period

'CRYSTALLIZATION PERIOD: The period over which Performance-Based Fees are considered earned and cannot be reversed under a Clawback.' Click to Tweet

Full Definition

This term is defined  in the GIPS 2020 Exposure Draft as The period over which PERFORMANCE-BASED FEES are considered earned by the FIRM or ASSET OWNER and can no longer be reversed under the terms of a CLAWBACK provision.  

Key Points about This Term

  1. This is a new term in the Global Investment Performance Standards (GIPS) vocabulary.
  2. Its is primarily part of the descriptors of its parent terms Carried Interest Description and Performance-Based Fees.
  3. Fun Fact – It appears two (2) times in the Exposure Draft in the definitions section.
  4. Possible Evolution under new Standards – The term is here to stay as part of the fee details of Performance Based Fees including Carried Interest.