Equalisation interest, often known as late payment interest, is an interest payable by subsequent investors to the former investors to compensate them for contributing their share in the fund later than the former investors. With Fundwave, you can define a common fees percentage for the fund and override it for individual investors.
Here's how to add an equalisation policy for the fund:
- On the fund dashboard, select 'Equalization Policy' from the left menu. Now click on 'Edit Policies' button next to it.
- On the following page, click on the '+' button. Enter the following details:
- Effective date of this policy.
- Interest rate (payable), expressed as a decimal
- Interest rate (receivable), expressed as a decimal
- The calculation basis or the number of days in a year.
- Click on the 'Save Equalisation Policies' button to save your changes.
All investors will default to this equalisation policy. To override this policy for any investor, open the investor dashboard. You will see the percentage that you defined on the fund on the top panel. Click on it to override the policy for this investor. Follow the same steps as defined above for the fund.