Financial Services Review: Specials Magazine

Alternative investments are gaining momentum as investors seek enhanced returns and more negatively correlated opportunities in their diversified portfolios. While high barriers to entry and regulation typically restrict access for non-accredited investors, the lack of liquidity is also a concern for accredited individuals and institutional players due to long lockup periods and potential gate issues. This can pose a significant challenge in today’s volatile financial markets. Finally, a product exists that will provide non-accredited investors access to alternative investments while also offering liquidity. KJLK & Co. has developed a groundbreaking solution: the auction fund, which aims to: 1. Reduce volatility 2. Elevate yield 3. Enhance diversification This innovative closed-end fund combines the high returns, consistent alpha, and low beta, of orthodox alternative strategies and private market exposures with the liquidity and convenience of traditional securities. It features a unique mechanism in which its net asset value (NAV) will eventually be calculated every 25 days. Investors can trade their subscription units in a secondary market and redeem their investments at these regular intervals, addressing the liquidity concerns that have historically limited broader participation in true alternative strategies and private market investments. This feature, along with its perpetual open-ended structure, allows KJLK & Co. to offer liquidity while opening a new avenue for retail and non-accredited investors. "Now is the time to rethink alternative investments and private markets," says Joe LaTurner, founder and principal of KJLK & Co. The auction fund represents a significant advancement in the alternative strategy and private market investment space, making previously exclusive opportunities more accessible to a wider range of investors. New Product in the Alternative Investment Market KJLK’s auction fund is a closed-end product with a perpetual open-ended mechanism, allowing the company to continuously sell subscription units in the primary market. This approach provides investors with liquidity within a typically illiquid closed-end fund structure. The innovative model enables KJLK to raise capital continuously through the primary market. Incoming, underlying funds run by reputable managers with consistent track records are strategically allocated across a diverse range of alternative and private market investment strategies, including hedge funds, private equity, private credit, venture capital, infrastructure, real assets, non-traded REITs, and BDCs. Even ETFs can be incubated in this structure, diversifying risk and maximizing returns. KJLK's auction fund shares will be listed on a very well known, global exchange, complete with a CUSIP number and DTC approval. This enables electronic transfers and custodial holdings, providing investors with greater convenience and liquidity. The fund’s net asset value (NAV) will be calculated every 25 days on a well-known global exchange, ensuring that investors can trade shares in a secondary market, creating liquidity without the need for direct redemptions from the fund. This innovative approach sets KJLK’s auction fund apart from traditional alternative strategy and private market investment products, offering investors unprecedented levels of liquidity and transparency.