486BPOS: Private Shares Fund Updates Prospectus, Waives Repurchase Fees

The Private Shares Fund files an updated prospectus detailing sales loads, expense limitations, and ongoing waivers of repurchase fees.

Summary

• The Private Shares Fund has updated its prospectus for Class A, Class L, and Class I shares.
• Investments in Class A shares are subject to a sales load ranging from 0.00% to 5.75%, while Class L shares have a sales load between 1.25% and 4.25%, depending on the investment amount.
• The fund's Board of Trustees has waived the repurchase fee for shareholders participating in repurchase offers indefinitely, but this waiver can be terminated by the Board.
• Without the waiver, a 2.00% repurchase fee would apply to shares held less than 365 days.
• Shareholders requesting wire transfers for repurchase proceeds will be charged a $20 fee.
• The Investment Adviser receives a monthly Advisory Fee accruing daily at an annual rate of 1.90% of the fund's average daily NAV.
• Class L shares incur a Distribution Fee of 0.25% annually, payable quarterly.
• The Investment Adviser has agreed to waive fees or reimburse expenses to maintain total annual operating expenses at 2.65% for Class A, 2.90% for Class L, and 2.40% for Class I shares until May 2, 2025.
• The fund may reimburse the Investment Adviser for previously waived fees or assumed expenses within three years if it doesn't exceed the expense limitation.
• Acquired Fund Fees and Expenses, including those of underlying private funds, range from 0.50% to 3.00% annually.
• The fund estimates its expenses for the current fiscal year ending December 31, 2024.
• The fund is continuously offering shares at NAV plus any applicable sales load.

Sentiment

Score: 6

Explanation: The document is primarily factual and descriptive, outlining the fund's structure, fees, and policies. The sentiment is neutral, with a slight positive leaning due to the waiver of repurchase fees.

Positives

• The indefinite waiver of repurchase fees provides increased flexibility for shareholders.
• Expense limitations ensure that operating expenses are capped at specified levels for each share class, protecting shareholder returns.
• The fund offers multiple share classes (A, L, and I) to cater to different investor profiles and investment amounts.

Negatives

• Class A and Class L shares are subject to sales loads, which can reduce the initial investment amount.
• Shareholders requesting wire transfers for repurchase proceeds will be charged a $20 fee.
• The Investment Adviser's right to seek reimbursement for previously waived fees could potentially increase expenses for shareholders in the future.

Risks

• The fund invests primarily in private company securities that are thinly traded and less liquid than other investments, or whose liquidity decreases in response to market developments or adverse investor perceptions.
• The Fund may invest up to 15% of its total assets in Private Funds and SPVs, which typically have limited or no withdrawal or redemption rights.
• The Fund may enter into Profit-Sharing Agreements with sellers of Portfolio Company or potential Portfolio Company shares.
• The business of identifying and structuring investments of the types contemplated by the Fund is competitive and involves a high degree of uncertainty.

Future Outlook

The Investment Adviser retains the right to seek reimbursement for any fees previously waived and/or expenses previously assumed, to the extent that such reimbursement will not cause Class A, Class L and Class I Shares respective annualized expenses to exceed the Expense Limitation.

Industry Context

The fund operates as an interval fund, a type of closed-end fund that periodically offers to repurchase shares from investors, providing limited liquidity in an otherwise illiquid investment.

Comparison to Industry Standards

• Comparable companies include other closed-end funds focused on private equity or venture capital investments, such as GSV Capital Corp. and BlackRock Innovation and Growth Trust.
• The expense ratios and fee structures should be assessed against these peers to determine competitiveness.
• The fund's investment strategy of focusing on late-stage operating businesses is common in the private equity space, but the specific terms and conditions of investments will vary.

Stakeholder Impact

• Shareholders benefit from the indefinite waiver of repurchase fees, providing increased flexibility.
• Financial intermediaries may be compensated for providing ongoing services to clients who have invested in Class A and Class L Shares.
• The Investment Adviser is responsible for managing the fund's investment program and providing day-to-day management services.

Next Steps

• The Investment Adviser will continue to identify and acquire securities of Portfolio Companies on acceptable terms.
• The Board of Trustees will continue to monitor the Funds investment program and its management and operations.
• The Fund will continue to make quarterly repurchase offers pursuant to Rule 23c-3 of the 1940 Act.

Key Dates

Keywords

Private Shares Fund, sales load, repurchase fee, advisory fee, expense limitation, interval fund, private equity, investment company