The minimum acceptable rate of return on an investment (also called cut-off rate). Typically equals the cost of capital incurred in financing the project.
The minimum ROI a company requires for investments. If expected rate of return of an investment is below the hurdle rate, the project is not undertaken.
the minimum rate of return needed to justify an investment as compared to alternative investment opportunities; i.e., the rate-of-return (ROR) must make it over a competitive hurdle in order to be acceptable with the rate being a time-calculation of the amount added to the investment basis. definition of rate of return defined rate-of-return defined ROR defined definition of hurtle rate defined definition of rate-of-return defined
The rate of growth of an investment trusts assets needed to repay any preference shares.
Is the minimum return necessary for a fund manager to start collecting fees. The hurdle usually reflects a benchmark such as Libor.
Term used in the budgeting of capital expenditures, meaning the Required Rate of Return in a discounted Cash Flow analysis. If the expected rate of return on an investment is below the hurdle rate, the project is not undertaken. The hurdle rate should be equal to the incremental cost of capital. In short, it refers to the critical minimum rate of return of an investment required by an investor.
The minimum investment return a fund must exceed before a performance allocation/incentive fee can be taken. For example, if a fund has a hurdle rate of Libor, and the fund returns 15% for the year, and Libor is 4%, the fund will only take incentive fees on 25% minus 4%.
A rate of return above which an investment makes sense and below which it does not. Also called required rate of return. Illiquid Market A market where trading is insufficient to enable investors to buy and sell securities easily without causing a major price change.
The minimum investment return a fund must exceed before a performance allocation/incentive fee can be taken. For example, if a fund has a hurdle rate of 10%, and the fund returns 25% for the year, the fund will only take incentive fees on the 15% return above the hurdle rate. See also High Water Mark.
The return on investments (ROI) necessary to compensate the investor for the risks involved in investments.
The return above which a hedge fund manager begins taking incentive fees. For example, if a fund has a hurdle rate of 10%, and the fund returns 25% for the year, the fund will only take incentive fees on the 15% return above the hurdle rate.
A minimum return requirement before incentive fees apply. It is often the current interest rate on fixed income securities.
A hurdle rate is the return, above which a hedge fund manager begins taking incentive fees. For example, if a fund has a hurdle rate of 10 percent and the fund returns 25 percent for the year, the fund will only take incentive fees once the 10 percent rate has been passed.
The required return in capital budgeting. E.g. if the project has an expected rate of return greater than the hurdle rate, the project may be accepted.
The rate of return a company requires before it will invest in a product or operation. It should generally equal the company’s incremental cost of capital.
The internal rate of return that a fund must achieve before its general partners or managers may receive an increased interest in the proceeds of the fund. Often, if the expected rate of return on an investment is below the hurdle rate, the project is not undertaken.
The minimum investment return a fund must exceed before a performance allocation/incentive fee can be deducted. Frequently LIBOR, Tbills, a certain percentage, or other benchmarks.
Minimum acceptable rate of return on a project.
The required return in capital budgeting. For example, if a project has an expected rate of return higher than the hurdle rate, the project may be accepted.
Is a break even debt service calculation that establishes the maximum interest rate a mortgaged property can handle at maturity if the property must be refinanced. It is calculated using current net operating income and an interest only mortgage with a reasonably short maturity of less than 5 years. (Also called "Break Even Debt Service Analysis"). Usually calculated to answer the question, "Can all loans refinanced at maturity, if interest rates are at a "Disaster Rate"
The minimum amount of return that a person requires before they will make an investment in something.