The principals established a fund that would be a conduit for accredited investors, family offices, institutional investors, sovereign funds and other interested parties to invest alongside IT Capital and its partners. The principals have observed that due to the current opportunities presented by the market and due to the current views of investors, the unique fund structure provides transparency and accountability with secured returns.
Investors typically have limited entries into this market and are traditionally via a “fund of fund” investment. In a fund of fund investment, the capital that is raised is typically charged a management fee even though the capital has not been deployed. Additionally many of these investments are anchored around the growth of the investment versus a "for cash flow" approach where distributions dictate return. Typically, investors in these funds are unable to see the underlying investments or the financial details. The principals have observed many instances where these growth investments lock up investors, making it difficult to exit.
Thus, the absolute returns to the investor's capital are increased by the reduction of management fees.
The principals' intent is to make investments through its partners that produce steady cash flow and dictate the ultimate returns back to the investors, principals and partners. Investing based around cash flow is typically less volatile than investing for growth. Investing alongside the principals, investors are able to see each targeted company's financials that the principals deem attractive. Target investment disclosure creates transparency that many fund of funds do not provide.
Finally, by investing alongside the principals and partners, the investors experience a pro rata return on their investment via the cash flow distributed annually, thus no predetermined exit is necessary.