Morris Manning & Martin, LLP

MMM Partner Owen Pinkerton Interviewed by FundFire on Uptick in Exemptive Relief Filings for Alts Funds, Granted by SEC


Alts fund managers are filing for exemptions in a steady stream to allow registered funds built for the advisor market to invest alongside their institutional private funds, and the Securities and Exchange Commission (SEC) has steadily increased its issuance of these exemptive relief orders. FundFire turned to Partner Owen Pinkerton to discuss the increased interest in the filings, including the benefits of the orders for managers, as well as the more streamlined relief granting process.

The orders primarily benefit managers seeking to invest in business development companies (BDC) and closed-end interval funds alongside private institutional funds. For the most part, the retail alts strategies winning relief invest in private debt, but the orders often extend to private equity vehicles as well.

According to Pinkerton, we will see more of these filings and orders in 2018. “Some newer orders are amendments to prior exemptive relief letters that seek to add new types of products, such as interval funds that have hit the market. In the past, these weren’t drafted broadly enough to include interval funds, but now that’s in the state-of-the-art relief letter,” said Pinkerton.

Another reason for increased interest is that most managers should only have to file for the relief once and fold in future funds as long as they follow the same conditions. However, Pinkerton cautioned that managers granted relief have their work cut out for them on compliance, particularly to keep very accurate records of every deal that the retail funds consider to ensure they are following the order’s conditions around allocation policies and other requirements.

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Article by: Tom Stabile
Featured in FundFire, May 2, 2018