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Understanding Profit & Loss (P&L) Upon Strategies Redemption

Updated today

When you redeem your investment in a GRVT Strategies, your Profit & Loss (P&L) is calculated based on several key factors. This guide breaks down the components used and provides a transparent formula for how your final return is determined.

Key Concepts

1. Share Price (Entry)

The price per share at the time of your initial investment.

2. Share Price (Redemption)

The price per share at the time you redeem your investment (this is based on actual time of successful redemption, not when you applied for redemption)

3. Number of Shares

Total shares you hold in the Strategies.

4. Performance Fees

A percentage fee charged on profits made, applicable only when there is a positive return.

5. Management Fees

A percentage fee based on the total value of your investment at the time of redemption. This fee applies regardless of whether your investment is in profit or loss.

6. Redemption Period

The interval or cutoff window during which redemptions are processed. This determines the applicable share price and may affect your exit timing.


P&L Calculation Formula

Your final P&L is calculated in two steps:

Step 1: Gross Profit Before Management Fees

Profit = (Share Price (Redemption) - Share Price (Entry)) × Number of Shares 

Step 2: Apply Performance and Management Fees

P&L = [Gross Profit × (1 - Performance Fee %)] - [Share Price (Redemption) × Number of Shares × Management Fee %(compounding)]

Final Formula

P&L = [(Share Price (Redemption) - Share Price (Entry)) × Number of Shares × (1 - Performance Fee %)] - [Share Price (Redemption) × Number of Shares × Management Fee %(compounding)]

Example

Suppose you have the following:

  • Share Price (Entry): $1

  • Share Price (Redemption): $1.1

  • Number of Shares: 1000

  • Performance Fee: 25%

  • Management Fee: 2%

  • Duration of Investment: 0.5 Year

Step 1: Gross Profit

(1.1 - 1) × 1000 = $100

Step 2: Apply Performance Fee

$100 × (1 - 0.25) = $75

Step 3: Apply Management Fee

1.1 × 1000 × 0.02 x 0.5 = $11

Final P&L:

$75 - $11 = $64

📝 Notes

  • Fees are applied only upon redemption.

  • The share prices are NAV-based and reflect the underlying asset performance.

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