Axxes Capital Opportunistic Credit Fund Declared Effective, Offers Three Share Classes
Axxes Capital, the private markets asset manager launched by private equity veteran and sports investor Joe DaGrosa, has launched an opportunistic credit fund open to individual investors. Declared effective by the U.S. Securities and Exchange Commission on Oct. 1, 2024, the fund is a a continuously offered, non-diversified, closed-end management investment company that is operated as an interval fund.
Axxes Opportunistic Credit Fund is sub-advised by $4 billion credit manager Greywolf Capital Management. Its investment adviser is Axxes Advisors I LLC.
The interval fund’s investment objective, according to its prospectus, is “to generate attractive risk-adjusted returns primarily from current income and, to a lesser extent, from capital appreciation.” The fund intends to invest at least 80% of its net assets, plus any borrowings for investment purposes, in the following: fixed or floating rate bonds, stressed and distressed credit instruments, convertible securities, collateralized loan obligations, commercial mortgage-backed securities, asset-backed securities, and other credit-related instruments.
According to the fund, Greywolf is approaching allocations across credit sectors based on its proprietary research and credit analysis, as well as its views regarding the economic outlook, credit market trends and conditions and relative value, among other factors. The fund is seeking to opportunistically take advantage of dislocations in the financial markets and other situations that may benefit from Greywolf’s credit and investing expertise. In addition to investing in credit instruments, the fund prospectus said it may invest a portion of its assets in preferred and common equity.
The fund is engaging in a continuous offering of Class A, C, and I shares at net asset value, and Ultimus Fund Distributors LLC is acting as the distributor of the shares on a best-efforts basis. The initial NAV per share for all share classes is $10.00. According to the fund’s prospectus, the maximum front-end sales load is 5.75% of the amount invested for Class A shares, while Class C and I shares are not subject to front-end sales loads.
The initial minimum purchase amounts are $25,000 in Class A and C shares and $1 million in Class I shares. The fund may decide to waive the investment minimum for Class I shares, but it will not waive the investment minimum to an amount below $25,000. Additional purchases must be for a minimum of $5,000 for all share classes, except for purchases made pursuant to the fund’s distribution reinvestment plan.
Per the specifications as an interval fund, the fund conducts quarterly repurchase offers at NAV of no less than 5% of the fund’s outstanding shares. Repurchase offers in excess of 5% are made solely at the discretion of the board of trustees of the fund and investors should not rely on any expectation of repurchase offers in excess of 5%.
In terms of fees, according to the fund, it pays the adviser a management fee at an annual rate of 1.5%, payable monthly in arrears and accrued daily based upon the fund’s average daily net assets. The incentive fee is calculated and payable quarterly in arrears in an amount equal to 3.75% of the fund’s “pre-incentive fee net investment income” for the immediately preceding quarter, and is subject to a hurdle rate, expressed as a rate of return on the fund’s “adjusted capital,” equal to 1.5% per quarter (or an annualized hurdle rate of 6%), subject to a “catch-up” feature, which allows the adviser to recover foregone incentive fees that were previously limited by the hurdle rate.
Launched in 2021, Axxes Capital provides financial advisers and their clients with access to private investment opportunities that it says are traditionally reserved for institutional investors and high-net-worth individuals.
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