Equalisation is the method used by funds in order to ensure that every shareholder pays the same percentage of performance\incentive fee no matter when they subscribe to the fund. Equalisation is relevant to all funds in which an incentive fee is paid to an investment manager. This can be done a number of ways
1. Multi Series accounting – Produces a new NAV for each subscription point.
2. Contingent redemption\Equalisation factor approach – Produces a single NAV per class.
3. Depreciation deposit\Equalisation factor approach- Produces a single NAV per class.