Portfolio Management Services
PMS under our management umbrella offers wealth management services to wealthy investors with high flexibility and customisation, Our PMS service aims to generate relatively high returns in comparison to other investment avenues focusing on the same asset bases.
Our Discretionary PMS is one in which the manages acts autonomous to manage the investments of the client. Unlike the above Non-discretionary PMS, the manager is not committed to take discretion at his own disposal whereas he is to refer to the clients approval for all transactions.
Profit Sharing : The profit sharing for the portfolio manager happens on the basis of High watermark Principle so and so the manager does not get paid for the low performance on investment.
Breaking down the high water mark principle.
Assuming the investor places 5 lakhs into the fund and agreed on 20% fee to the portfolio manager. The fund makes a profit of 75K in the following month, owing a fee of 15K. Thus making the high watermark for this investor to be 575000, assuming the fund loses 20% in the next month and the account drops value to 460000. The performance fee need not be paid to increase the fund from 460000 to 575000, the fee is to be paid only if the fund increases above 575000. The importance of the high watermark lies in this structure of fee.