Christian Munafo, Chief Investment Officer, Liberty Street Advisors met with Julie Cooling, Founder & CEO, RIA Channel to discuss the Private Shares Fund and its mission to democratize access to late stage venture-backed companies.
“The size of the public market is shrinking, while the private markets continue to grow and surge” says Munafo. A number of factors, such as administrative burdens and increased access to venture capital, has led to companies staying private longer. It’s also worth noting that private, high-growth companies are also able to remain much more nimble and free to make adjustments in strategy and operations, than their publicly-traded counterparts.
Ultimately, this shift has produced a record number of unicorns, and has left advisors increasingly seeking access to alpha generating investments. Historically, late-stage venture or pre-IPO investment opportunities have been virtually out of reach for the advisor community. High minimums, illiquidity, and access to quality managers has created private market and more specifically, venture allocation challenges.
Liberty Street Advisors’ Private Shares Fund (PRIVX) seeks to solve for many of these commonly faced obstacles. The venture fund’s unique 40 act interval fund structure delivers access to a diversified pool of late stage ventured-backed tech companies, with no accreditation requirements, quarterly redemption, and an easier subscription process.
Currently the fund’s portfolio includes about 70 companies, representing a wide range of tech-enabled sectors and industries including cyber security, aerospace, agriculture, fintech and more. Because PRIVX is an evergreen fund, investors have access to a constant flow of opportunities.
The Liberty Street Funds offer investors and financial advisors mutual funds sub-advised by independent boutique managers who possess expertise in their asset class. Because Liberty Street focuses on boutique managers, financial advisors can provide value-added strategies in actively managed and less-correlated portfolios to their clients. Through its selective multi-manager family of funds, Liberty Street provides access to timely investment strategies.
Christian Munafo is the chief investment officer of Liberty Street Funds and the portfolio manager of the SharesPost 100 Fund. Mr. Munafo has 21 years of experience in finance, with the last 16 years focused on secondary investments involving venture-backed and growth equity-oriented companies and funds. During this time, he has also served on the boards of many of these companies and funds. Previously, Christian was Co-Head of the Global Private Equity Secondaries Practice at HQ Capital based in New York. Prior to that, he served as Head of Secondaries at Thomas Weisel Partners. In aggregate, Christian has helped raise more than $1 billion globally from institutional investors, corporations, pensions, endowments and family offices, and has completed or overseen the completion of more than 100 secondary transactions representing over $1 billion in capital commitments. Christian received his BA from Rutgers College.
To learn more: Private Markets Playbook: Venture Capital The venture capital course aims to provide a practical playbook specifically for financial advisors. Join us for this 2 hour, interactive and advisor led program that will cover:
- Opportunities in Venture Capital
- The Fundamentals of Venture Capital
- Late Stage Venture Capital
- Due Diligence, Valuations & Risk Considerations
Important Information and Disclosures
*Represents 27.06% of Fund holdings as of August 31, 2021. Holdings are subject to change. Not a recommendation to buy, sell, or hold any particular security. To view the Fund’s complete holdings, visit privatesharesfund.com/portfolio.The Fund’s website updates top holdings and total holding frequently. Please visit the Fund’s website for the most current information. Past Performance Does Not Guarantee Future Results. The Private Shares Fund is a closed-end interval fund that seeks capital appreciation by focusing on investments in late-stage, venture backed private companies. As of December 9, 2020, Liberty Street Advisors, Inc. became the adviser to the Fund. The Fund’s portfolio managers did not change. Effective April 30, 2021, the Fund changed its name from the “SharesPost 100 Fund” to “The Private Shares Fund.” Effective July 7, 2021, the Fund made changes to its investment strategy. In addition to directly investing in private companies, the Fund may also invest in private investments in public equity (“PIPEs”) where the issuer is a special purpose acquisition company (“SPAC”), and profit sharing agreements. The Fund’s investment thesis has not changed. Investors should consider the investment objectives, risks, charges and expenses carefully before investing. For a prospectus with this and other information about The Private Shares Fund (the “Fund”), please download here, visit the Fund’s website at PrivateSharesFund.com or call 1-800-834-8707. Read the prospectus carefully before investing. Investment in the Fund involves substantial risk. The Fund is not suitable for investors who cannot bear the risk of loss of all or part of their investment. The Fund is appropriate only for investors who can tolerate a high degree of risk and do not require a liquid investment. Shares in the Fund are highly illiquid, and can be sold by shareholders only in the quarterly repurchase program of the Fund which allows for up to 5% of the Fund’s outstanding shares at NAV to be redeemed each quarter. Due to transfer restrictions and the illiquid nature of the Fund’s investments, you may not be able to sell your shares when, or in the amount that, you desire. The Fund intends to primarily invest in securities of private, late-stage, venture-backed growth companies. There are significant potential risks relating to investing in such securities. Because most of the securities in which the Fund invests are not publicly traded, the Fund’s investments will be valued by Liberty Street Advisors, Inc. (the “Investment Adviser”) pursuant to fair valuation procedures and methodologies adopted by the Board of Trustees, as set forth in the prospectus. As a consequence, the value of the securities, and therefore the Fund’s Net Asset Value (NAV), may vary. There are significant potential risks associated with investing in venture capital and private equity-backed companies with complex capital structures. The Fund focuses its investments in a limited number of securities, which could subject it to greater risk than that of a larger, more varied portfolio. There is a greater focus in technology securities that could adversely affect the Fund’s performance. The Fund is a non-diversified investment company, and as such, the Fund may invest a greater percentage of its assets in the securities of a smaller number of issuers than a diversified fund. The Fund’s quarterly repurchase policy may require the Fund to liquidate portfolio holdings earlier than the Investment Adviser would otherwise do so and may also result in an increase in the Fund’s expense ratio. Portfolio holdings of private companies that become publicly traded likely will be subject to lock-up provisions and to more volatile market fluctuations than when private, and the Fund may not be able to sell shares at favorable prices. The Fund may invest in private securities utilizing special purpose vehicles (“SPV”s), private investments in public equity (“PIPE”) transactions where the issuer is a special purpose acquisition company (“SPAC”), and profit sharing agreements. Risks associated with SPVs, PIPEs, SPACs and profit sharing agreements include expense risk, contractual risk, legal risk, price risk, and market risk. Certain conflicts of interest involving the Fund and its affiliates could impact the Fund’s investment returns and limit the flexibility of its investment policies. This is not a complete enumeration of the Fund’s risks. Please read the Fund prospectus for other risk factors related to the Fund. The Fund is distributed by FORESIDE FUND SERVICES, LLC This video is for FINANCIAL PROFESSIONAL AND INSTITUTIONAL USE ONLY. NOT FOR USE WITH THE RETAIL PUBLIC.