Funds With a Private Offering
InterCapital’s ancillary company, InterCapital Asset Management (ICAM d.o.o.), is a pioneer in the Croatian market with regards to the establishment and management of open-end investment funds with a private offering. The establishment of private funds was approved by the Law on investment funds in late 2005.
During 2006 we founded the first private fund. Today the number of private funds under management has increased to seven.
Last in the series of our Private Funds is our Stability Fund, which was started on the 17th of October 2008.
The so-called emergency fund, which we have at our disposal, can pay-out other funds under management who otherwise cannot sell portions of their assets under management in a quick and efficient manner. In addition, a shareholder may also draw from this fund when he / she makes a request for payment. The requirement for the purchase of assets is for the respective asset management company, whose fund is under financial stress, to start the process of liquidation, culminating in the closing of the fund within a reasonable time.
Initial investors in our Stability Fund are four associations for the management of mandatory pension funds (AZ Retirement Association, ROMF, PBZ-CO retirement company, Erste Plavi), as well as four leading companies who manage open-end investment funds (ZB Invest, PBZ Invest, Invest RBA, Erste Invest). The founders of the Fund dedicated 150 million HRK for the Fund’s establishment, with an initial payment of 50 million HRK, and the remaining 100 million HRK to be provided by InterCapital Asset Management (ICAM d.o.o.).
Other private funds under management are personalized funds of just one investor and are intended specifically for individuals with a significant amount of money to invest in the money markets and capital markets.
Characteristics of Funds with a Private Offering
The specific feature of private open-end investment funds, in relation to public open-end investment funds, is to sell shares in a fund with a private offering of “qualified” investors.
Qualified investors are investors who conduct business as an investment or pension fund, as well as an investment management company, pension fund, bank, insurance, and/or brokerage company.
Qualified investors are all companies and individuals whose net asset value exceeds 1,500,000HRK and are able to dedicate at least 750,000HRK in cash for the fund’s establishment.
The number of shareholders in the fund is limited to a maximum of 200, while the asset management company has the reserved right to accept or reject any potential investors.
The price per shares of the fund is not a publicly disclosed; rather, it is communicated to shareholders in a private manner, as are all reports relating to the operations of the fund.
Private funds are subject to oversight by a regulator (Croatian Agency for Supervision of Financial Services), but in terms of an investment strategy they have a little more freedom of action in comparison to funds with a public offering.
The main differences between open-end investment funds with a public vs. a private offering are as follows:
