Phoenix American Financial Services (PAFS) is offering fund administration services to new investment fund companies operating under SEC rule 506(c).
Because the new funds engage in general solicitation for new investors, Phoenix American provides a range of front office services in addition to the company's back office outsourcing offering which includes shareholder record keeping, transfer agent services, tax and accounting services, printing and fulfilment.
As a result of the Jumpstart Our Business Startups (JOBS) Act, new fund companies operating under SEC rule 506(c) are permitted to engage in general solicitation for new investors. Phoenix American Financial Services now offers all the services necessary to streamline this process and maximise the efficiency of new investor acquisition and processing as well as ongoing shareholder record keeping. These new functions include: call centre services to process incoming responses to fund advertising, printing and fulfilment of investment information and sales kits, prospect investor follow-up, investor accreditation services and new investment processing.
The advantages to sponsors of offering a fund by general solicitation are the potential for raising money more quickly than by way of a broker dealer network and the subsequent savings in commission payments. However, since the broker dealer network is not involved in these financial offerings, sponsors are now responsible for a substantial amount of work surrounding subscription processing, accreditation, prospect and investor relations. Phoenix American takes on this workload so that sponsors' operations staff may focus on growing the fund.
Investor accreditation in particular involves a host of complexities and document management challenges that are frustrating to sponsor operations but critical to compliance. Phoenix American employs a specialised staff to walk investors through the process. Phoenix also adapted its STAR-XMS transfer agent system to include an Accredited Investor Database especially built to meet all compliance requirements and to simplify re-accreditation of investors for future offerings.
"This is a natural move for us," says Tony Olivo, director of business development for Phoenix American. "We have been serving alternative investment funds for over forty years through many changes in regulations and the economy. Our front office offering for 506(c) funds is a natural extension of the tradition of efficiency, security and value that we bring to our back office outsourcing services."