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Ultimus Fund Solutions launches non exchange-traded closed-end fund service

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Ultimus Fund Solutions has launched a non exchange-traded closed-end fund service, allowing alternative investment managers access to the ERISA retirement plan market in a registered fund structure with fewer operational constraints than most typical retail fund offerings.

Financial Solutions Inc (FSI) is the first manager to leverage Ultimus’ closed-end fund offering.
Ultimus will provide FSI with the operational expertise and outsourcing services necessary to support its Low Beta Absolute Fund structure, including fund administration and accounting, fund compliance, and unitholder servicing and reporting.
While often underused, non exchange-traded CEFs are becoming recognised as the most flexible registered fund structure and the one that most closely resembles privately offered hedge funds. Non exchange-traded CEFs require only monthly asset valuation and quarterly asset redemption, which can lead to lower operating costs than most registered funds that require daily valuation and redemption. Non exchange-traded CEFs also allow 1099 tax reporting rather than partnership accounting.
“The number of alternative managers looking to introduce their strategies in the registered world is exploding but an immediate transition to a full retail structure simply doesn’t make sense for many firms,” says Dave Carson (pictured), vice president, director of client strategies at Ultimus. “A non exchange-traded closed-end fund provides many of the benefits and access of a registered fund without some of the typical operational requirements. We’ve seen a strong demand for this type of structure and we have the operational expertise to execute on it. We’re excited to work with FSI and other managers going forward to help them grow their businesses and gain access to a broader investor base.”
“As we designed the fund it became clear that a non exchange-traded closed-end fund was the right structure for us,” says Gary Gould, managing principal of FSI. “The vehicle gives us the flexibility to execute our fund of funds strategy in a registered fund without many of the operational barriers that would be cost-prohibitive and in some cases counter to the strategy. When we conducted due diligence on service providers Ultimus demonstrated their expertise at every step along the way and truly gave us the confidence that we were making the right decision for our business.”

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