Closing a fund in an invested pool/strategy

ryandouglasryandouglas Posts: 11 ✭✭
Photogenic First Compass Anniversary First Comment CSuite
edited January 2023 in Finance & Operations

1)     What are your procedures for closing a fund that is currently in an investment pool?

2)     Do you have a policy that explicitly states these procedures that the fund holder receives/signs off on as part of the onboarding process (i.e. Fund Agreement and/or Terms & Conditions)? If so, could you please share?

Our current practice is to 1) Clearly communicate with the fund holder that closing a fund comes in two separate distributions. The first distribution represents the majority of the fund balance and would be distributed ASAP. 2) On the first of the following month, disable “Revenue Share” to stop allocating them investment earnings. 3) The second and final distribution would happen the following month after the current month's earnings have been calculated and final monthly admin fee assessed.

The Achilles heel to this approach is that our investment earnings are received monthly (usually around the 10th of the month), and the fund holder would therefore be “out of the market” for ~ two weeks before all of its monies are received. We realize that some agencies may not be happy about that. 

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