- Fund will sell up to $375 mln worth of shares
- To be marketed through Merrill Lynch
- Requires minimum investment of $25k
Altegris, a research and investment specialist with $2.7 billion in assets under management, registered to sell up to $375 million in public shares for Altegris KKR Commitments Fund. The fund will charge an annual management fee of 1.2 percent and its annual net expense for fees is estimated to be 4.62 percent, according to the fund’s prospectus.
At least 80 percent of fund assets will be allocated to private equity investments of any type, sponsored or advised by KKR or an affiliate, including primary offerings and secondary acquisitions of interests in funds with private equity strategies, according to a public prospectus for the fund.
The fund requires a minimum investment of $25,000 and at least $10,000 for each additional investment. Each investor will be required to certify that shares are being acquired directly or indirectly for the account of an accredited investor as defined in Rule 501(a) of Regulation D under the 1933 Act.
Altegris CEO Jon Sundt said the firm approached KKR about two years ago with its track record of providing mutual funds and other products aimed at high net worth investors. The Altegris KKR Commitments Fund is the first of its kind to be publicly registered.
“No funds like this exist,” Sundt said. “It’s a product that gives investors diversified access to private equity, and who’s better than KKR to collaborate on this?”
Altegris will market the fund in part with an alliance with Merrill Lynch to distribute to clients.
“We think this product will have extremely high demand in the wealth management channels,” Sundt said. The firm will collaborate with KKR and StepStone on purchasing secondary stakes in funds. He declined to elaborate on terms.
StepStone, a specialist in separate accounts with $12 billion in assets under management, is a sub-advisor to the fund and will provide expertise in primary, secondary and co-investment opportunities, as well as portfolio construction. The firm will receive a portion of the management fee.
Two other private equity firms are indirectly in the mix: Aquiline Capital Partners and Genstar Capital Management jointly purchased Altegris from Genworth Financial in 2013.
“We are pleased that Altegris has decided to bring individual investors the opportunity to invest in private equity, with a focus on KKR private equity, through this new and innovative fund,” Suzanne Donohoe, member and head of client and partner group at KKR, said in a prepared statement.
The fund is a master fund in a master/feeder structure. No shares in the fund will be sold until at least $25 million in subscriptions is reached. Investors will get money out by share repurchases, which will start at least two full calendar years following commencement of fund operations.
Between 40 percent and 80 percent of the fund’s assets will be allocated to buyout funds, up to 20 percent to special situations, and up to 40 percent for infrastructure, real estate, energy and direct lending/mezzanine investments.
Up to 80 percent of the fund will go toward primary investments, including seasoned primary investments. Up to 50 percent may go to secondary investments, and up to 60 percent to co-investment opportunities.
Jack Rivkin and Eric Bundonis will manage the fund. Rivkin, chief investment officer, has worked in senior roles at Neuberger Berman, Citigroup Investments and PaineWebber. Bundonis, director of research and investments and portfolio manager, joined Altegris from OneCapital Management Partners.
The move by Altegris comes after Carlyle Group signed up with Central Park Group to launch CPG Carlyle Private Equity Fund LLC, which has accumulated more than $550 million in assets.
Pantheon is running AMG Pantheon Private Equity Master Fund LLC, which sets a minimum investment level of $50,000 for access to Pantheon’s fund-of-funds for accredited investors under U.S. securities rules.
Meanwhile, shareholders in the $6.5 billion Oppenheimer Global Strategic Income Fund, a publicly traded mutual fund, will vote on whether to allow Apollo Global Management to become a sub-sub advisor to provide retail investor exposure to Apollo’s high-yield debt investments.