FlowStone Partners, which provides private equity investment opportunities to qualified High Net Worth investors, has launched the FlowStone Opportunity Fund, a closed-end, non-exchange-listed investment management company registered under the Investment Company Act of 1940 (the ’40 Act).
The new ’40 Act Fund, which began operations on 30 August, offers qualified investors a simplified way to access private equity investments through a broadly diversified, professionally managed portfolio.
The fund launches with a completed transaction and has several other opportunities in process which may close prior to the end of 2019.
The FlowStone Opportunity Fund will invest in a mix of secondaries, primary investments, and co-investments and will be diversified across several important metrics, including underlying manager/investment strategy, vintage year, sector and geography. The Fund’s strategy seeks exposure to the attractive risk-adjusted returns of the private equity asset class through a vehicle designed to meet the needs of the High Net Worth investor. Secondary acquisitions – expected to make up between 50 and 100 percent of the portfolio – pursue mature, return-generating assets at a discount to their intrinsic value and may mitigate the J-Curve common in private equity.
“Historically, it has been challenging for qualified individual investors to access private equity and alternative investment strategies,” says Scott P Conners, FlowStone’s President and Managing Director. “High quality companies are staying private longer, and exposure to these investments is becoming increasingly important to a well-diversified portfolio. We believe the FlowStone Opportunity Fund – which combines the benefits of private equity secondary and primary investments, as well as co-investments – offers an excellent approach, especially for investors who may be new to private equity and are seeking to build a core, diversified position in the asset class via a single investment. In addition, the FlowStone fund is intended to provide investors much greater investment flexibility than what is offered by traditional, institutionally-oriented private equity investment vehicles.”
As a ’40 Act fund, FlowStone Opportunity Fund offers investors a familiar structure. It provides simplified access to a diversified portfolio of underlying private equity investments, with Fund shares purchased and redeemed through the Fund itself. The minimum initial investment for the Fund is USD100,000, and follow-on investments can be made starting at USD10,000. The Fund’s redemption feature allows for liquidity on a quarterly basis, subject to some limitations. The Fund also features Form 1099 tax reporting, simplifying the tax return process.
The FlowStone Opportunity Fund management team is highly experienced, with over 80 years of combined experience in private equity investing at leading institutional investment firms. The group has completed over 100 transactions and is led by Scott P. Conners, CFA, Managing Director of FlowStone Partners. Conners has over two decades of experience, having served as a Partner at Landmark Partners prior to joining FlowStone. Working with Conners are Michael A. Carrano, Managing Director (formerly of Landmark Partners); Andreas Muenderlein, Managing Director (formerly of Partners Group); Jason A. Neal, Managing Director, Business Development (formerly of Landmark Partners); William S. Bertha, Senior Associate (formerly of Adams Street Partners), and Charlie Finnegan, Associate (formerly of Aberdeen Standard).