Past performance does not guarantee future results. Distributions are not guaranteed.
Although the fund will offer to repurchase at least 5% of outstanding shares on a quarterly basis in accordance with the Fund’s repurchase policy, the fund will not be required to repurchase shares at a shareholder’s option nor will shares be exchangeable for units, interests, or shares of any security.
An Interval Fund is a continuously offered, closed-end mutual fund that periodically offers to repurchase its shares from shareholders. This feature allows the Fund greater opportunities to invest in less liquid assets, which may result in higher risk-adjusted returns. Through the interval structure, the Fund offers a Liquidity Feature of quarterly redemptions at NAV of no less than 5% of the shares outstanding made available, redeeming more frequently than other real estate and private equity investments. Correlation is a measure of the degree to which the value of different investment types move in the same direction; if they perform independently of one another, they are non-correlated. Net Asset Value (NAV) represents the underlying value of shares. The NAV of the Fund’s shares is the market value of the Fund’s assets and is the price at which the shares can be purchased before the addition of any applicable sales charges.
An investor should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. To obtain a prospectus containing this and other information, please call (866) 773-4120 or download the file from www.ResourceAlts.com. Read the prospectus carefully before you invest. The Fund is distributed by ALPS Distributors, Inc. Resource Alternative Advisor, LLC and ALPS Distributors, Inc. are not affiliated.
Investing involves risk. Investment return and principal value of an investment will fluctuate, and an investor’s shares, when redeemed, may be worth more or less than their original cost. Alternative investment funds, ETFs, interval funds, and closed-end funds are subject to management and other expenses, which will be indirectly paid by the Fund. Debt instruments are subject to credit risk and interest rate risk and may be subordinated to more senior debt instruments. BDCs often use leverage to enhance returns and are subject to interest rate risk, credit risk, and liquidity risk. CLOs are debt instruments but also carry additional risks related to the complexity and leverage inherent in the CLO structure. The use of leverage, such as borrowing money to purchase securities, will cause the Fund to incur additional expenses and magnify the Fund’s gains or losses.
There currently is no secondary market for the Fund’s shares and the Fund expects that no secondary market will develop. Shares of the Fund will not be listed on any securities exchange, which makes them inherently illiquid. An investment in the Fund’s shares is not suitable for investors who cannot tolerate risk of loss or who require liquidity, other than the liquidity provided through the Fund’s repurchase policy. Limited liquidity is provided to shareholders only through the Fund’s quarterly repurchase offers, regardless of how the Fund performs. The Fund’s distributions policy may, under certain circumstances, have certain adverse consequences to the Fund and its shareholders because it may result in a return of capital, resulting in less of a shareholder’s assets being invested in the Fund, and, over time, increase the Fund’s expense ratio. Any invested capital that is returned to the shareholder will be reduced by the Fund’s fees and expenses, as well as the applicable sales load. Investments in lesser-known, small and medium capitalization companies may be more vulnerable than larger, more established organizations. The sales of securities to fund repurchases could reduce the market price of those securities, which in turn would reduce the Fund’s NAV.
Unsecured loans (and secured subordinated loans), including second and lower lien loans, have a lower place in the borrower’s capital structure and possible unsecured or partially secured status, such loans involve a higher degree of overall risk than senior loans of the same borrower.
BDCs may carry risks similar to those of a private equity or venture capital fund. BDC company securities are not redeemable at the option of the shareholder and they may trade in the market at a discount to their net asset value.
Non-traded BDCs are subject to commissions, expenses, and offering and organizational costs that reduce the value of an investor’s (including the Fund’s) investment. Non-traded BDCs are not liquid.
Private investment fund shareholders will bear two layers of fees and expenses: asset-based fees and expenses at the Fund level, and asset-based fees, which may include incentive allocations or fees and expenses at the Private Investment Fund level. The valuation provided by an asset manager as of a specific date may vary from the actual sale price that may be obtained if such investment were sold to a third party. In addition to valuation risk, shareholders of Private Investment Funds are not entitled to the protections of the Investment Company Act of 1940.
Private investment funds and Public investment funds in which the Fund invests will use derivatives (consisting of forwards, options, repurchase agreements, futures, warrants, and swaps) to enhance returns or hedge against market declines, and the Fund may also invest in options of Public Investment Funds to hedge against market declines.
CLOs and other structured products, consisting of CBOs, CLOs and credit-linked notes may bear risks of the underlying investments, index or reference obligation and are subject to counterparty risk. Certain structured products may be thinly traded or have a limited trading market.
Debt securities will fluctuate with changes in interest rates. Typically, a rise in interest rates causes a decline in the value of debt securities. Credit risk and interest rate risk increase substantially with high yield debt instruments.
Real estate investments may be impacted by interest rates and market movements. Market risk will tend to have a greater effect on funds that are more growth-oriented, as the sale of appreciated properties depends upon market demand. Interest rate risk impacts the amount of dividend income that is paid by income-oriented funds.
High-yield bonds are high paying bonds with lower credit ratings than investment-grade corporate bonds, Treasury bonds and municipal bonds. Because of the higher risk of default, these bonds pay a higher yield than investment grade bonds.
Interest rates of bonds may rise, resulting in the market value of a bond to decline. There is no assurance that a significant change in market interest rates will not have a material adverse effect on its net investment income.
Duration is always equal to or less than the years to maturity of the bond. The longer the duration of a particular bond, the more its price will fluctuate in response to interest rate changes.
Senior loans hold the most senior position in the capital structure of a Borrower. Substantial increases in interest rates may cause an increase in loan defaults as borrowers may lack resources to meet higher debt service requirements. The value of the Fund’s assets may also be affected by other uncertainties such as economic developments affecting the market for senior secured term loans or affecting borrowers generally. Moreover, the security for the Fund’s investments in secured debt may not be recognized for a variety of reasons, including the failure to make required filings by lenders, trustees or other responsible parties and, as a result, the Fund may not have priority over other creditors as anticipated.