Auction Funds

For

  • Elevating the interval fund with monthly, auction-based liquidity
  • Retaining all other benefits of interval funds such as; lower minimums, zero capital calls, and RIC status for 1099 tax reporting
  • Lowering cash drag and offering investors more choice with dual liquidity solutions
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Auction funds will fundamentally change the way Financial Advisors (FAs) allocate alternative investments (AIs) into their clients’ portfolios via an offering unlike any from their competitors.

The Benefits of Auction Funds

  • Achieving Private Equity Allocations

    No wirehouse is close to achieving model portfolio alternative investment allocations even though private equity (PE) is the biggest unmet desire of high net worth (HNW) investors.*

  • Addressing Structural Problems

    Auction Funds provide solutions not just for Accredited Investors, but for Qualified Purchasers who can buy traditional feeder funds, eliminating the issues that affluent investors & their gatekeepers experience with existing Alternative Investments.

  • The Key to New Capital Flow

    Auction Funds may significantly increase private equity allocations, and create a strong argument to FAs seeking a new investment vehicle – a fundamentally better answer to the unmet desires of HNW investors.

*Source: 2018 U.S. Trust Insights on Wealth & Worth, June 2

In 2017, the SEC granted Nasdaq exemptive relief, permitting Nasdaq Private Market to facilitate the first-ever fund structure that is continuously available and allows HNW investors to access investment opportunities in illiquid assets – all within an existing market for the fund shares. As the sole approved marketplace to facilitate monthly auctions, Nasdaq Private Market adds liquidity to the latest evolution of investment structures for HNW investors.

 

Evolution of Private Fund Structures:

How it Works

Auction Funds address the challenges that HNWI (High Net Worth Investors) face with current investment structures by providing an exclusive marketplace at NPM to hold periodic auctions that satisfy investors’ demand for alternative investments with the benefit of more frequent liquidity.

01

Onboarding & Setup

Specific auction language will be provided to insert in fund documents, and onboarding investors, buyers, and funds is simple.

02

Auction Period

Auctions occur periodically and can be customized to meet a fund sponsor’s criteria.

03

Pricing Process

Our algorithmically-managed auction process determines the clearing price for all buyers and sellers – regardless of order size.

04

Closing & Settlement Period

Our dedicated operations team manages the integrated payment workflow and closing documentation through our own paying agent.

 

 

 Additional Resources:

For more information about auction funds, please refer to recent thought leadership and content from NPM and our partners

 

To learn more about our auction fund platform, click here