Fund Terms
The following is a summary of certain terms of the Fund.
The Prospectus contains additional terms and should be reviewed carefully.
| Investment Objective | The Fund’s investment objective is to seek long-term capital appreciation. |
| Eligible Investors | The Fund is offered to “accredited investors.”1 |
| Minimum Investments2 | Class A | Class I | |
|---|---|---|---|
| Initial Investment | $35,000 | $50,000 | |
| Subsequent Investment | $10,000 | $10,000 |
| Fees and Expenses3 | Class A | Class I | |
|---|---|---|---|
| Management Fee | 1.20% | 1.20% | |
| Distribution Fee | 0.60% | None | |
| Sales Fee | 3.50% | None |
| Subscriptions | Monthly |
| Quarterly Tender Offers4 | PFA anticipates, generally, recommending quarterly tender offers of up to 5% of Fund’s NAV subject to Board approval; 2% early repurchase fee imposed for repurchases within 1 year of investment. |
| Tax Reporting5 | Form-1099 |
| Advisor | Princeton Fund Advisors, LLC |
| Distributor | Northern Lights Distributors, LLC |
- As defined in Regulation D under the Securities Act of 1933, as amended.
- Source: The investment minimums may be reduced by the Fund in the sole discretion of the Advisor.
- The Funds management fee is 1.20%. The Fund’s total annual operating expenses are 4.83%, 4.23%, 4.53%, and 5.09% for Class A, I, II, and L shares, respectively. The Fund’s investment advisor has contractually agreed to waive management fees and to make payments to limit Fund expenses until July 31, 2024. After this fee waiver, the expense ratios are 4.76%, 4.15%, 4.45%, and 5.02% for the Class A, I, II, and L shares, respectively. These fee waivers and expense reimbursements are subject to possible recoupment from the Fund in future years. Please review the Fund’s Prospectus for more information regarding the Fund’s fees and expenses, including other share classes. With respect to Class L Shares, Northern Lights Distributors, LLC (“NLD”) will re-allow the stated portion of the placement fee/sales load to Sub-Placement Agents and others who have sold shares pursuant to a selling agreement with NLD. The Re-Allowed Amount for Class A and L shares is 3.25% and 2.00%, respectively. Class I and Class II Shares do not have a placement fee/sales load. Please review the Fund’s Prospectus for more information regarding the Fund’s fees and expenses, including other share classes.
- Investors may not be able to fully liquidate investments for a long period of time and should not invest money needed in the near to medium term There are no guarantees that the Fund will execute such tender offers. Investors tendering shares for repurchase in any tender offer must do so by a date specified in the notice describing the terms of the repurchase offer, which will generally be approximately 75 days prior to the date that the shares to be repurchased are valued by the Fund. Investors that elect to tender their shares in the Fund will not know the price at which such shares will be repurchased until such valuation date.
- Please consult a tax advisor for specifics on how investments in the Fund may impact particular tax situations. PFA does not render tax advice to clients
Fund Material
Regulatory Documents:
Offering:
Literature:
Due Diligence :
Marketing Material:
Glossary
60/40 Allocation - An investment strategy referring to allocating 60% of the portfolio to stocks and the other 40% to bonds. This is a traditional portfolio style that intends to diversify asset classes to carry only a moderate amount of risk.
Accredited Investors - Defined by Rule 501 of Regulation D, an individual "accredited investor" is either a person who has an individual or joint net worth, that exceeds $1 million at the time of the purchase or a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and evidence of same or similar income level in the current year.
Acquisition - Buying or obtaining control over another business entity in private equity markets. Typically, in situations where one business or a conglomerate gains control and ownership over a private company.
Allocate - The total asset amount given to any investor in an offering. An allocation decides how much capital is given to each investment and is an important decision in diversification. This amount can change from the original indicated amount by the investor during the subscription process depending on changes in market demand.
Annualized Performance - The growth rate of an investment based on one period year’s final valuation.
AUM – Assets Under Management, refers to the sum of all capital an investment firm is currently holding including every asset class.
Beta - A statistical measurement of the movement of a stock relative to the overall movement of the market. A beta of exactly 1.0 means that for every increase in the entire stock market, the stock would follow exactly. A beta larger than 1.0 would move more, for example, a stock with a beta of 2.0 would increase twice as much for every increase in the overall market. A beta lower than 1.0 would be vice versa and would indicate lower volatility. Sometimes referred to as systematic risk.
Bloomberg Aggregate Bond Index - The Bloomberg U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market. This includes Treasuries, government-related and corporate securities, mortgage-backed securities, asset-backed securities, and collateralized mortgage-backed securities.
Cambridge Associates Private Equity Index - Cambridge Associates’ Private Investments Database is one of the most robust collections of institutional quality private fund performance. It contains the historical performance records of over 2,200 fund managers and their over 9,000 funds. In addition, we capture the performance information (gross) of over 89,000 investments underlying our venture capital, growth equity, and buyout funds.
Capital Calls - When capital is committed by investors, the demand for the money is not instantaneous. A capital call is when the private equity fund demands some part of the money that has been committed. Any payment made pursuant is called a drawdown.
Committed Capital - From an investor’s perspective, this refers to the sum of all current security holdings and money promised for future investments. From a fund’s perspective, the total amount of money from all participants promised to an investment.
Distribution - The payment made from the fund to an investor from the realization of an investment. Distributions can occur as a regular series of payments or at a particular target amount.
Diversification - The act of investing across a variety of different types of asset classes, companies, industries, and markets to mitigate the risk of the impact of one or a few securities.
Down Capture Ratio – The ratio that statistically measures an investment manager's overall performance in down markets, markets in which indexes have lowered. Comparing a manager’s down capture ratio to an index can give you an evaluation of their effectiveness.
Drawdown Capital - From an investor perspective, the amount of committed capital that the private equity fund has already called. From a fund’s perspective, it is the total amount that they have requested from its investors.
Due Diligence - The research process undertaken by a potential investor to conclude the value or potential of an opportunity. Due diligence includes researching every factor, including the viability, goals, and financial conditions that pertain to an investment.
Escrow - A legally defined account, where funds are held in a third-party trust whilst two or more parties complete a transaction in accordance with pre-agreed conditions. When analyzing Private Equity funds, an escrow is often used as a financial mechanism to give LPs some measure of security against possible clawback.
Fixed Income – An investment in bonds. Fund assets can include corporate debt, government debt, or a combination of the two types.
Flagship (Fund) - The most important product (fund) of a group, usually the oldest product or contains the largest of a group’s assets under management.
Fund of Funds – A fund set up by a Private Equity firm that invests in funds rather than directly into companies. Fund of Funds managers are frequently also active participants in the secondary market. A Fund of Funds fund is a way for individuals to invest in funds that would otherwise be unavailable to them.
Leverage - Refers to the amount of debt involved in a company or a transaction.
Leveraged Buyout (LBO)– An acquisition of a company through substantial use of debt. The action of one company acquiring another utilizing borrowed money to meet the cost of acquiring the company. In addition to the assets of the acquiring company, oftentimes, the assets of the acquired company are used as collateral for the loans taken out to acquire the company. When converting an acquired company from public to private, a premium to the market’s price of the shares is paid to the public shareholders of the acquired company.
Lower Quartile – Also known as the first quartile, the value at which 75% of all returns in a group are greater and 25% are lower.
Marquee – Similar to a company’s flagship fund, a marquee asset is a company’s most prized asset. The asset is usually the largest contributor to a company’s success.
Max Drawdown - A maximum drawdown (MDD) is the maximum observed loss from a peak to a trough of a portfolio, before a new peak is attained. Maximum drawdown is an indicator of downside risk over a specified time period.
Mezzanine - Convertible unsecured debt in the capital stack which sits between the equity and senior debt layers of a Buyout structure. The term can also be found pre-IPO in early funding rounds in Venture companies.
MSCI ACWI - The MSCI ACWI Index, MSCI’s flagship global equity index, is designed to represent performance of the full opportunity set of large- and mid-cap stocks across 23 developed and 24 emerging markets. As of May 2022, it covers more than 2,933 constituents across 11 sectors and approximately 85% of the free float-adjusted market capitalization in each market. The index is built using MSCI’s Global Investable Market Index (GIMI) methodology, which is designed to take into account variations reflecting conditions across regions, market cap sizes, sectors, style segments and combinations.
Private Credit - The lender lends money to the company in exchange for interest payments and can impose covenants and/or collateralization that secures the loan. Unlike publicly offered company stocks and bonds, investing in shares (equity) or loans (credit) is not available to the general public.
Private Equity - Equity securities of companies that are not listed on a public exchange. This asset class is generally more illiquid and thought of as a long-term investment. In addition, there are many transfer restrictions on private securities. Investors in private securities generally gain value through one of three ways: an initial public offering, a sale or merger, or a recapitalization.
Portfolio companies - A business entity that has secured some amount of financing from one or more private equity funds, also known as an investee firm. A Company in which a given fund has invested.
Qualified Purchaser – A higher standard than an accredited investor, a qualified purchaser is an individual or family-owned business that owns at least $5 million in investments.
S&P 500 Index - Standard & Poor's 500 Index, is a market-capitalization-weighted index of the leading 500 publicly traded companies in the U.S. With more criteria than just market cap, it is not an exact proxy of the top 500 U.S. companies by market cap. Nonetheless, the S&P 500 is regarded as one of the best gauges of prominent American equities' performance, and by extension, that of the stock market overall.
Sharpe Ratio – A ratio that measures the risk-adjusted return of a security or portfolio by dividing the average return minus the risk-free return by the standard deviation of return.
Standard Deviation – A statistical measure of an asset as it falls and rises from its average price. It is a way to measure a security’s volatility to the market or a specific benchmark. A low standard deviation indicates a narrow trading range.
Subscriptions – Prior to the closing of a purchase, a subscription is a process for an investor to commit to or buy a set number of newly issued securities.
Tender Offers – A bid to shareholders to purchase some or all their stock in a company. This form of purchasing stock is one of the more common ways a hostile takeover is performed.
Up Capture Ratio – A ratio that evaluates an investment manager’s performance compared to a broad market benchmark during up-markets, a period in which indexes have risen.
Vintage Year – The year in which a fund is formed and/or the year its first takedown of investment capital is committed. Having a vintage year for a fund is useful when comparing the performance of similar types of funds in the same vintage year.