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English definition of “incentive fee”

incentive fee

noun [C]
 
 
FINANCE
money paid to a person or company that manages investments to encourage them to make as much profit as possible: The bank was entitled to an incentive fee of 3% of any increase in offer price. The average hedge fund incentive fee has dipped 1% in the last year.
(Definition of incentive fee from the Cambridge Business English Dictionary © Cambridge University Press)
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