486BPOS: Alternative Strategies Income Fund Files Post-Effective Amendment for Continuous Securities Offering

Alternative Strategies Income Fund files a post-effective amendment to register additional securities for its continuous offering, aiming to provide attractive risk-adjusted returns through alternative investments.

Summary

• Alternative Strategies Income Fund, a non-diversified, closed-end management investment company, has filed a post-effective amendment to its registration statement.
• The fund is continuously offering shares of beneficial interest and operates as an interval fund, making quarterly repurchase offers of at least 5% of outstanding shares.
• The fund's investment objective is to seek attractive risk-adjusted returns with low to moderate volatility and low correlation to broader markets, emphasizing income generation through a concentrated alternative investment approach.
• The fund primarily invests in structured notes, diversified across industry, company, observation dates, maturity dates, barrier levels, and issuers.
• As of June 30, 2024, the net asset value per share was $15.29 for Class A shares, $14.22 for Class C shares, and $15.26 for Class I shares.
• The maximum sales load imposed on purchases is 4.25% of the amount invested for Class A shares; Class C and Class I shares are not subject to sales charges.
• The minimum initial investment is $5,000 for Class A shares, $2,500 for Class C shares, and $100,000 for Class I shares.
• The fund's continuous offering is expected to continue until it has sold shares equal to approximately $5 billion.
• The Adviser is entitled to receive a fee calculated and payable monthly at the annual rate of 1.50% of the average daily value of the Funds daily net assets.
• The Adviser has agreed to waive its fees and to pay or absorb the ordinary operating expenses of the Fund to the extent that they exceed 3.00%, 3.65% and 2.75% per annum of the Funds average daily net assets attributable to Class A, Class C shares and Class I shares, respectively.
• The Expense Limitation Agreement will remain in effect at least until October 31, 2025.

Sentiment

Score: 6

Explanation: The document is neutral in tone, primarily providing factual information about the fund's structure, investment strategy, and fees. The inclusion of risk factors tempers any overly positive interpretation.

Positives

• The fund offers quarterly repurchase offers, providing some liquidity to shareholders.
• The fund diversifies its investments across various structured notes to minimize downside risk.
• The Adviser has agreed to limit the Fund's expenses, potentially increasing returns for shareholders.
• Class C and Class I shares are not subject to sales charges.

Negatives

• Class A shares have a maximum sales load of 4.25%.
• Class C shares pay a distribution fee of 0.75% of average daily net assets.
• The fund's shares are not listed on any securities exchange, limiting liquidity.
• The fund's investments are subject to liquidity risk, making it difficult to sell investments at advantageous times.

Risks

• Investing in the fund involves risks, including the risk of loss of investment.
• The fund primarily invests in structured notes, which are subject to risks associated with the underlying assets.
• The fund's performance is subject to market risk, economic conditions, and political climates.
• The use of leverage can magnify the fund's gains or losses.
• The fund's investments are subject to liquidity risk, making it difficult to sell investments at advantageous times.
• The fund may invest in structured notes that have foreign equity securities as their reference asset, which involves risks of adverse fluctuations in foreign currency values, adverse political, social, and economic developments, less liquidity, greater volatility, less developed or less efficient trading markets, political instability and differing auditing and legal standards.
• The fund may invest in structured notes that have commodities as their reference asset, which may subject the Fund to greater volatility than investments in traditional securities.

Future Outlook

The Fund's continuous offering is expected to continue until it has sold shares in an amount equal to approximately $5 billion.

Industry Context

The fund operates within the alternative investment space, seeking to provide returns with low correlation to traditional markets, a strategy often employed to diversify portfolios and manage risk.

Comparison to Industry Standards

• The fund's investment strategy of using structured notes is comparable to other alternative investment funds that seek to generate income and manage risk through derivative instruments.
• The expense ratios for each share class are within the range of other closed-end funds with similar investment strategies, but investors should carefully consider these costs when making investment decisions.
• The quarterly repurchase offers provide a degree of liquidity not typically found in traditional closed-end funds, making it more similar to interval funds.

Stakeholder Impact

• Shareholders will have the opportunity to invest in a fund with a unique investment strategy.
• Shareholders will have limited liquidity through quarterly repurchase offers.
• The fund's performance will impact shareholder returns.
• The fees and expenses of the fund will impact shareholder returns.

Next Steps

• The fund will continue to offer shares on a continuous basis.
• The fund will make quarterly repurchase offers to shareholders.
• The Adviser will continue to manage the fund's investments and monitor its performance.

Key Dates

Keywords

interval fund, structured notes, alternative investments, closed-end fund, income generation, quarterly repurchases, risk-adjusted returns, SCG Asset Management, Ladenburg Thalmann, non-diversified