Percent Allocation Management Module - an account structure where a money manager trades a pooled fund and results are distributed proportionally across investor sub-accounts.
A PAMM account allows a professional money manager to trade a single master account whose profit and loss is allocated to each investor in proportion to their share of the total pool. If the master account holds USD 100,000 total - USD 50,000 from the manager and USD 50,000 from two investors of USD 25,000 each - a 10% gain allocates USD 5,000 to the manager and USD 2,500 to each investor, less any performance fee.
Performance fees are typically calculated on a high-water mark basis: the manager earns a fee (commonly 20–30% of profit) only on net new profits above the previous highest NAV. This structure aligns the manager's incentives with the investors' - the manager must recover any prior losses before earning performance fees again.
MAM (Multi-Account Manager) accounts function similarly but offer more flexible lot allocation methods (fixed lot, fixed ratio, percentage of equity, or lot-to-equity ratio), making them preferred for fund managers who want precise control over each sub-account's risk exposure, particularly when sub-accounts have different leverage or risk settings.
Investors in PAMM accounts should verify that the manager's equity is invested alongside theirs ('skin in the game'), review the full audited track record including drawdowns, and understand the withdrawal and lock-up terms. Regulatory oversight varies by jurisdiction - some regulators require PAMM managers to hold an investment management licence; others treat them as ordinary managed accounts. PAMM structures are offered by most ECN-focused brokers as a business service for professional money managers.