Fund Liquidity

One of the key differences between investing in public markets (stocks and bonds) and private markets is liquidity: how long an investor has to wait in order to sell their investment.

Public markets investments typically offer at least daily liquidity. For example, mutual funds offer daily redemptions, and stocks and ETFs can generally be sold at any time while the market is open.

Private markets investments generally do not offer daily liquidity. Note that this can be seen as a feature, not a bug: having more capital certainty can allow private markets fund managers to capture an illiquidity premium.

But historically, the lockup periods for private markets investments have been extremely long. For example, a typical private equity fund might not expect to begin returning capital for 5 to 7 years (and it could be even longer before an investor receives all of their investment back). For many individual investors, that may feel like too big a liquidity risk to take (after all, life happens).

We’ve designed the Institutional Investment Strategy Fund to balance these two goals: provide access to private funds seeking to capture the illiquidity premium while preserving some capital flexibility.

The Fund provides quarterly liquidity: every quarter, we offer a window (at least 21 days long) during which investors can submit a repurchase request to sell shares. All repurchases are processed at the end of that window.

But there’s an important nuance: each quarter, the Fund offers to repurchase up to 5% of total outstanding shares. Note that this is a fund-level 5%, not an individual shareholder 5%. If the total repurchase requests across all shareholders exceeded that fund-level 5%, each request would be pro-rated. But to date, the Fund has never hit that 5% cap, so shareholders have been able to sell as many shares as they requested.

This process allows the Fund to protect the interests of all shareholders. The Fund always maintains sufficient liquidity to meet the 5% threshold, ensuring that it can fulfill repurchase requests without impacting its asset allocation or ability to execute its strategy.

Complete details about the fund’s repurchase policy are available in the fund’s prospectus under the section “Quarterly Repurchases of Shares”.