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PAMM & MAM

Manager accounts, profit sharing and rollovers

What actually goes wrong

Seven arguments about the same number

Managed accounts do not fail on performance. They fail on arithmetic nobody can reproduce.

A pooled account has three parties who each believe they know what happened: the manager, the investor and the broker. When the period closes and the fee is taken, all three need to arrive at the same figure from the same evidence — and if they cannot, the product is finished regardless of how the trading went.

Everything below is a place where those three views drift apart: an allocation made by hand, a deposit that landed mid-period, a high-water mark somebody tracked in a spreadsheet. The module’s job is to make the number reproducible by all three from the same record.

  1. 01

    Allocation was done by hand after the close.

    Every fill is split across investors by their share of the pool at the moment the trade was executed, automatically, to the decimal your rules specify. Nobody reconciles allocations in the evening, and nobody has to explain why one investor’s share looks generous.

  2. 02

    An investor funded on the eleventh and expected a full month.

    Subscriptions and redemptions are time-weighted, so capital that arrived halfway through a period earns on the part of the period it was actually there for. The rule is the same for everyone, published in advance, and visible in the statement afterwards.

  3. 03

    The high-water mark lived in a spreadsheet.

    Each investor carries their own high-water mark on the record, so a performance fee is only charged on gains above the last peak that investor actually saw. A recovery after a drawdown is not a fee event, and no one has to take that on faith.

  4. 04

    The manager and the investor disagreed about the fee.

    Performance, management and entry or exit fees are calculated from the same records the allocation came from, on terms attached to the offer the investor accepted. The statement shows the working, not just the conclusion, which is what ends the conversation.

  5. 05

    Investors could not see their own position.

    Each investor sees their share, their equity, their fees, their history and the manager’s performance in the client portal, in your branding. An investor who can check their own number stops asking the desk for it, and starts trusting the one they are shown.

  6. 06

    A redemption landed in the middle of open trades.

    Requests queue to the rollover rather than tearing a hole in the pool mid-position. The investor is told when their exit will be processed and on what basis, instead of discovering afterwards that the timing cost them something nobody mentioned.

  7. 07

    Nobody could prove any of it a year later.

    Allocations, rollovers, fee calculations, subscriptions and redemptions are all on the trail with the time and the operator. When an investor asks about a period from last spring, the answer is retrieved rather than reconstructed.

What is in it

The pool, the split, the fee and the close

Four mechanics. Between them they decide whether the product is trusted.

  1. Part one

    The manager account

    What the manager may trade, who may join and on what terms. An offer is a published set of conditions rather than a private arrangement, which is what makes the same product sellable to a hundred investors instead of negotiated with each.

    • PAMM and MAM models
    • Multiple offers per manager
    • Minimum investment and lock-in periods
    • Manager’s own capital in the pool
    • Instrument and leverage limits
    • Capacity caps per offer
    • Public performance record
  2. Part two

    Allocation

    The part that has to be exact. Every fill is divided by each investor’s share of the pool at execution time, with rounding handled by a published rule rather than by whoever was doing the sums.

    • Split by equity share at execution
    • Lot, percentage and equity allocation methods
    • Time-weighted subscriptions and redemptions
    • Partial fills handled per investor
    • Rounding rules published in advance
    • Per-investor position visibility
    • Allocation trail on every trade
  3. Part three

    Fees

    Performance fees on gains above each investor’s own high-water mark, management fees on capital, and whatever entry or exit terms the offer carries. All of it worked from the allocation records, so the fee and the performance come from one source.

    • Performance fee with per-investor high-water mark
    • Management fee on capital or equity
    • Tiered fees by investment size
    • Entry, exit and early-redemption terms
    • Hurdle rates where the offer sets one
    • Fee split between manager and broker
    • Working shown on every statement
  4. Part four

    Rollover and reporting

    The period close: positions valued, fees taken, shares restated, subscriptions and redemptions processed. It runs on schedule rather than when somebody remembers, and every investor gets the same statement out of the same run.

    • Scheduled rollover periods
    • Subscription and redemption queues
    • Share restatement after fees
    • Investor statements per period
    • Manager performance reporting
    • Drawdown and return history
    • Full trail on every rollover

Who signs in

One pool, six people checking it

Two of them are your clients, which is what makes this module different from the rest.

  • Managers. The pool, its capacity, their offers and their published record, plus the fees they have earned. They trade one account and the split happens beneath them.
  • Investors. Their share, their equity, their fees with the working shown, and the manager’s history — in the client portal, in your branding, without asking anyone.
  • The dealing desk. Pool exposure at the aggregate level and the limits each offer is bound by, so a manager cannot quietly become the firm’s largest position.
  • Finance. Fee splits between manager and broker, subscription and redemption settlement, and the movements that flow from every rollover.
  • Compliance. Offer terms as the investor accepted them, suitability and lock-in enforcement, and the trail behind every fee taken.
  • Support. Enough of an investor’s position to answer the question on the phone, and no ability to alter any of it.

A managed account product lives or dies on whether three parties get the same number.

Get Your Demo Read the FAQ

Questions about the module

Before you launch the product

What a desk wants settled before it takes other people’s money into a pool.

  • Both are supported and the difference is how the split is expressed. Under PAMM the investors hold a percentage share of one pool and results divide by that share; under MAM the manager’s trade is mirrored into each investor’s own account on an allocation method you choose — by lot, by equity or proportionally. PAMM tends to suit a pooled product with published performance; MAM suits investors who want positions on an account of their own. A manager can run offers on both models at once if your programme calls for it.

  • Per investor, not per pool, which is the only version that is fair. Each investor carries their own high-water mark on their record, set at the highest value their holding has reached at a rollover, and a performance fee is charged only on gains above it. An investor who joined at a peak and sat through a drawdown pays nothing on the recovery back to where they started, while an investor who joined at the bottom pays on their own gain from there. Both can see the mark and the calculation in their statement.

  • The capital is time-weighted, so it earns on the part of the period it was actually invested for rather than the whole of it. Subscriptions can be set to take effect immediately or to queue to the next rollover, depending on how your offer is written; redemptions usually queue, so an exit does not tear a hole in a pool that has open positions. Whichever rule the offer carries, the investor is told when their money will go to work or come back, and on what basis, before they commit rather than afterwards.

  • Yes, and most serious managers do. An offer is a published set of terms — minimum investment, fee structure, lock-in, rollover period, instrument limits and capacity — and a manager can run a conservative offer and an aggressive one side by side, or a high-minimum offer with lower fees for larger investors. Each offer has its own pool, its own performance record and its own capacity cap, so a strategy that only works up to a certain size cannot be oversold by accident.

  • However your agreement says, and it is applied at the rollover rather than settled between you afterwards. Performance and management fees are calculated from the allocation records, the split is applied, and both sides land as movements in the ledger with the calculation attached. The manager sees their earnings in their own view and you see the firm’s share in yours, from the same run — so the monthly conversation about whether the numbers agree does not happen, because they came from the same place.

  • The ones you already run — MT5, cTrader, Match-Trader and the rest of the bridges the platform supports. The manager trades on the terminal they know, and the allocation, fee and rollover machinery sits in the CRM above it, which means adding a managed-account product does not mean asking your managers to learn a new terminal or asking your desk to run a second system alongside the one it already reconciles.