Hedge Fund Commitment Date Looming
As part of our ongoing commitment to our referral partners, Midland likes to share professional success stories from some of our relationships and their successful implementation of using IRAs within their capital raise. While the names have been altered, the stories and the industry are accurate.
This story focuses on a Midwest hedge fund that caters to high-net-worth and ultra-high-net-worth individuals.
As is typically the case, the fund manager came to Midland reluctantly. In the past, their group had given very little thought to IRA custody since they’ve never had an investor ask; however, this time, a new investor insisted on making his commitment with funds he had available in an old defined benefit plan.
The fund’s latest offering was turned down for custody on a major custody platform; the fund manager sought a solution to this dilemma and came across Midland Trust in his series of outreach calls. One unique component of this fund was the commitment date was within a span of a few days, and if missed, this particular investor using retirement money would have to wait another month for entry.
Midland set the offering up on their custody platform within 24 hours, clearing this fund manager's first obstacle. But while the task of finding the custodian was over, the daunting task of explaining the process to this new investor was staring the manager in the face. He had never worked with Midland and while he knew in broad strokes what to expect, he did not know the details of the process.
The manager was assured Midland would be able to offer assistance to this investor. However, the fund manager was determined to handle the transition himself because he valued his relationship with the investor. The process is easy enough: open a Midland account, move retirement funds over from the current custodian to Midland, and then provide investment amount and date for the purchase.
The manager took down all of the details armed to relay to his new investor. A mere 2 minutes later, he called Midland back to see if they could come onto the call with him to explain the process and answer any questions. As it worked out, Midland was able to answer the detailed question about the particulars of this investor's situation, the investment deadline was met, and all parties involved were pleased with the outcome.
Fast forward a few months: the manager in this story, and his entire investor relations team, don’t involve themselves much in the onboarding of new retirement plan investors. When it happens that retirement money is in play, they utilize Midland as their back office. Their new funds are onboarded to Midland’s custody platform right out of the gate, and they rely on Midland's process to satisfy their requirements and to communicate at the appropriate level with their investors.
Midland's systems were developed because they understand the challenges investment managers face, and they build their systems around the constraints built into offerings like hedge funds, syndications, and private offerings of all kinds.
Bring Midland into your circle of professionals and you'll find you have an ally in your capital raise efforts. Learn more here.