Private Funds

A private fund pools investor capital to pursue a specific investment strategy. Unlike mutual funds, private funds are generally offered through private placements and are subject to different investor eligibility and regulatory requirements. They can invest in publicly traded securities, private equity, real estate, and other assets.

Alta Trust private funds are structured as trusts rather than limited liability companies (LLCs) or limited partnerships (LPs). Like LLCs and LPs, they are subject to applicable Regulation D requirements.

The trust structure provides additional oversight through Alta Trust’s role as trustee, flexibility in tax treatment, and a structure in which the investment advisor does not take custody. It can also offer lower establishment and administration costs than a traditional partnership.

Private funds can hold a wide range of investments, including equities, fixed income, mutual funds, ETFs, international securities, options, futures, private equity, hedge funds, and real estate.

Private funds may be available to accredited investors or qualified purchasers, depending on the fund’s structure and applicable exemptions. Eligible investors can generally use a variety of account types to invest, subject to the fund’s requirements.

Yes. Private funds relying on the Section 3(c)(1) exemption are generally limited to 100 beneficial owners. Funds relying on Section 3(c)(7) are generally limited to qualified purchasers and may accommodate up to 1,999 investors under the registration threshold discussed on Alta’s existing page. Specific limits and counting rules depend on the fund’s structure and applicable regulations.

Typically, yes. The fund sponsor establishes subscription and redemption terms, which generally correspond with the fund’s valuation dates. These are commonly monthly or quarterly, depending on the investment strategy.

Yes, subject to applicable regulations. Registered investment advisors may charge performance fees when investors meet qualified client requirements or another applicable exception. Different rules may apply to sponsors that are not registered investment advisors.

The fund sponsor serves a role similar to the managing member of an LLC or general partner of a limited partnership. The sponsor is responsible for implementing and overseeing the investment strategy, directing the trustee, and raising capital for the fund.

Establishment costs may be as much as 50% lower in some cases, while ongoing administration costs have historically been approximately 25% below average hedge fund administration costs. Actual savings depend on the fund’s structure and service requirements. Additional value may come from Alta’s compliance, custody, and performance reporting services.

Yes. Private funds can offer multiple share classes with different fee arrangements, allowing sponsors to accommodate different investor relationships and investment terms.

Yes. Alta Trust can establish a series offering with separate funds governed by a common master trust document. This allows sponsors to offer multiple investment strategies within a shared trust structure.

Advertising may be permitted under applicable securities regulations, provided the fund complies with the relevant requirements and restrictions.

Alta Trust handles fund accounting, valuations, and ongoing fund administration.

Not necessarily. Audit requirements depend on the fund’s structure and applicable regulations. Even when an audit isn’t required, it may still be beneficial. Alta Trust coordinates with the independent audit firm and provides the records and reporting needed to support the audit.

Yes, applicable state securities filing and notification requirements, commonly called blue sky requirements, also apply to private funds. Alta Trust handles the necessary state filings.

Alta Trust handles fund administration and investor statements, which are generally distributed monthly or quarterly. Compliance responsibilities depend on the fund’s structure and the respective obligations of Alta Trust and the sponsor.

Commissions may be permitted when paid to appropriately registered broker-dealers or associated persons, subject to applicable securities regulations and compensation requirements.

No. Different types of investment professionals, companies, and other entities may sponsor private funds. Registration requirements depend on the sponsor’s activities, fund structure, and applicable regulations.