Settlement Policy for Algorithmic Strategies
Coinvestor builds an intuitive standard of settlement policy for algorithmic strategies. Based on High-Water Mark, on behalf of how to drive a best practice from traders of algorithmic strategies, minimum interruption for oder positions management and maximum understandings for investors to plan best buy-sell scehdule there shall be.
Overview
Period: 4 weeks | 12 weeks
Type: Round High-Water Mark
Initial High-Water Mark: 0 - 10%
*A high-water mark is the highest peak in value that an investment fund or account has reached. This term is often used in the context of fund manager compensation, which is performance-based. The high-water mark ensures the manager does not get paid large sums for poor performance. If the manager loses money over a period, he must get the fund above the high-water mark before receiving a performance bonus from the assets under management (AUM). Simply said, the profit share of operator shall be based on the total amount of profit minus high-water mark.
Cost
Platform Fee: AUM * 1.5%
Performance Share Rate : 25%
Net Profit: Profit - Platform Fee for the settlement period
Operator Share: Principle * (Net Profit - High Water Mark) * Performance Share Rate
Investor Share: Net Profit - Operator Share
Schedule
For every Period, last day of the period is for settlement and Coinvestor calculates both the total amount of reserved cancellations and additional subscriptions which will be activated in next period. Also, following pre-defined settlement policy, profit share for operator will be settled together.
D+0: new trading period begins
D+14: reservation of cancellation and additional subscription for next round begins.
D+21: reservation of cancellation inactivated and operator shall be ready for positions management to execute cancellation of minimum interruption for running her strategy.
D+28: actual cancellation and profit share of operator happens.
*This schedule is for strategies of 4 weeks' period and D+56, D+77, D+84 in order for 12 weeks' period.
P&L Report (Profit & Loss Report)
After 3 working days from settlement day, PnL Report shall be shared on the platform and to the registered email of each investors.
Note
We believe that this settlement policy will definitely benefit invetors, as operators will only be able to retain their stake if they achieve a rerunt of high-water mark or more. It will make our valued operators more trustworthy to investors, and it will be seen as a commitment by the operators that they are doing their best to ensure that their srategy performs well. For sure, for investors convinience, policy will continuously evolve to follow various needs of investors and their interests.