The October/November issue of Private Funds CFO is out, and you can download it here.
Editor’s letter: Registered private funds under the Investment Company Act of 1940 may not be anything new, but since their initial emergence in the first decade of the millennium – and subsequent fizzling out due to disappointing returns and liquidity characteristics – the private funds industry has been trying to reinvent them. Now, after last year’s guidance from the US Department of Labor allowing defined contribution plan money into the market and in pursuit of the longtime desire of some institutional investors for improved liquidity without an impact on their ‘illiquidity premium,’ some fund managers are innovating in the registered fund arena.
But it’s not just in registered ’40 Act funds that managers are trying to break the mold. In the US, and particularly in Europe, private fund managers are “pushing boundaries” with exotic structures, one fund administrator told me. Unregistered ‘evergreen’ funds, hybrid funds with buckets for publicly traded assets – and even funds that alternate between closed and open-ended – are beginning to appear.
This month, we look at some of the key, high-level considerations for finance, accounting and operations professionals whose firms are considering their own structure experiments. As seems ever the case, CFOs in particular will be charged with identifying and managing the right technology, service providers, operational needs and compliance requirements for managing such funds.
While not by any means exhaustive, we hope our cover story will help orient you, should your firm choose to join in this spurt of innovation. And keep an eye out for more as we delve deeper into the topic.
Email prepared by Graham Bippart