> For the complete documentation index, see [llms.txt](https://docs.ipor.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.ipor.io/fusion-for-institutions/institutional-fee-structures-and-performance-tracking.md).

# Institutional Fee Structures & Performance Tracking

Fusion provides a programmable fee engine that automates the accounting, accrual, and distribution of management and performance fees, aligning incentives between allocators and managers.

## **Fee Types**

* **Management Fee (AUM-based):** An annualized fee calculated based on total AUM, accruing continuously (per block).
* The **Performance Fee** is a success-based fee on net profits, aligning incentives with absolute returns. Governed by a **High Watermark** (HWM), it's paid only when the current NAV exceeds its prior peak. Realized at set intervals based on settled onchain valuations, compensation reflects sustained growth. A rolling structure, which can be manual or time-based, allows the HWM to be reset.
* **Deposit & Redemption Fees:** Transactional fees that can be [**Socialized** ](/build-on-fusion/atomists/curating-a-fusion-vault/on-and-offboarding-contributions.md)(retained in the vault to benefit existing depositors) or **Administrative** (directed to a separate address, such as the vault owner, for operational costs).