ICONOMI introduces Performance Fees for Crypto Funds

We were looking for that one more special raison d’être for people to join ICONOMI. And we’ve found it. We are happy to be the first in the crypto world to introduce something new, Performance Fees for Crypto Funds.

By enabling performance fees, we’ve created a fair mechanism to align the interests of professional Crypto Fund managers and investors. We believe that hard work should always be rewarded and that motivation for investing will be higher from both sides.

Autograph your work with excellence....

Crypto Fund managers are now able to monetize their knowledge by generating returns for investors, and in turn be rewarded with a performance fee for their skills. While investors can be sure that when the market goes down, and the Crypto Fund is not performing well, they are spared the fees.

And the benefits are:

  • fees are collected only when you make a profit from your initial investment
  • managers with better Crypto Fund performance are rewarded more
  • fees bring fairness and balance to the investor/manager relationship
  • investors don’t pay performance fees for funds that do not perform

Each Crypto Fund manager will be able to combine both the management fee (between 0 and 10% annually) and the performance fee (up to 30%). Ever heard of “two and twenty”? With ICONOMI, you can even customize the old saying. All fees are split between ICONOMI and the manager under our referral program.

. . . and get rewarded

How the performance fee is calculated

Joyce decided to create her own Crypto Fund that includes a 2% management fee and a 20% performance fee. As an experienced fund manager, she got 10 investors right away. In the meantime, a month had passed, and her Crypto Fund had a return of 10%. What does that mean for her and her investors?

Let’s say Joyce’s investors pulled together €100,000. After a month, their investments are worth €110,000. What does this mean for Joyce?

After deduction of ICONOMI's share of fees

Be on the safe side. . .

In order to treat our users fairly, we will implement the so-called ““high-water mark.” What does that mean? Simply put, in case the value of your investment in a Crypto Fund drops, you will not pay any performance fees until the value of your investment reaches the previous high. In other words, you will not pay any performance fees twice for the same amount of performance.

How about an example? Sure!

Let’s say you invest €1,000 in a Crypto fund with a 20% performance fee that is collected monthly. Here’s a scenario which shows how a high-water mark works:

How a high-water mark works

. . . and get paid on a weekly, monthly, or quarterly basis

Each Crypto Fund manager will determine the period of collection of the performance fee – it can be weekly, monthly, or quarterly. ICONOMI will collect the performance fee directly from the users’ accounts, and will show the fee as a transaction in the users’ activity page. Managers will get paid directly to their Crypto Fund.

All existing Crypto Funds (except for the tokenized ones) will be able to introduce a performance fee, which can be changed twice a year. In case the Crypto Fund manager reduces a performance fee, such a reduction takes immediate effect. If, however, a Crypto Fund manager decides to increase their performance fee, there will be a transition period for existing users, who will be notified of such a planned increase and given a chance to reconsider their investment options.

Create your own Crypto Fund today, and start making that extra profit.

Looking for more ways to attract new investors or suggest a friend to start using ICONOMI? Check out our Referral program.