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In November 2020, the European Securities and Markets Authority (“ESMA”) published its guidelines on performance fees applicable to UCITS and certain types of AIFs (the “Guidelines”). The Guidelines aim to promote greater convergence and standardisation in the field of performance fees. In particular, they aim to ensure that performance fee models used by Investment Fund Managers (“IFM”) comply with the principles of acting honestly and fairly in conducting their business activities and acting with due skill, care and diligence, in the best interest of the fund that they manage, in such a way as to prevent undue costs being charged to the fund and its investors. The Guidelines finally aim at establishing a common standard in relation to the disclosure of performance fee models to...
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