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1337 Street Fund (a.k.a. Q Fund) prospectus?

Is there a prospectus available for the 1337 Street Fund (a.k.a. Q Fund)?

6 responses

When I do a Google search on "hedge fund prospectus" I get lots of hits. Does every operating hedge fund have to have a public prospectus? Or is it something that can be kept private?

If I am not mistaken, I think the prospectus must be given to the client at or before the time of sale of the mutual fund. So I suppose it would be what you call "private" until you buy the fund.

Our fund relies on an exemption from registration under the Investment Company Act. We assert the exemption in our Form D filing with the SEC. If we didn't have that exemption our fund would essentially be treated like a mutual fund, with its accompanying investment constraints. We have to meet many requirements in order to maintain that exemption. One requirement is that the fund not be offered to the public. As such, there are significant limitations on the distribution of the fund's prospectus (or PPM as it is called). We do not make public distributions of our PPM.

When I google "hedge fund prospectus" I get a lot of hits, but none of them that I see are actually a PPM for an exempted fund. I see stock offerings in financial management companies (offering prospectus). I see "trusts" that use the word "hedge fund" in their boilerplate language, but they are not claiming the same exemption that Quantopian is. There are a lot of hits to that query, but the results aren't comparable to what you're asking about here.

You will find some PPMs online if you look hard enough. However, those documents are almost certainly not provided directly by the fund itself - they were presumably misappropriated, or released by someone without authorization. or fabricated.

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Thanks Dan -

Interesting. I kinda figured I wouldn't be able to send an e-mail to [email protected] (found on https://www.quantopian.com/investor_relations) and get anything official in response, like a prospectus (although I suppose technically this wouldn't be a public distribution of your PPM).

Part of my thinking here is that I recall Fawce saying that y'all would be trying to attract institutional investors, including public funds (I don't have the exact reference, so I could be misquoting here). My recollection is retirement funds, hospitals, etc. So, I figured that they would require a public-facing description of the investment, a long the lines of a prospectus. And then, logically, I concluded maybe I just need to ask for such a document, given that you are registered, legitimate, and all.

One of the first steps when someone emails [email protected] is to ascertain if the sender is a qualified investor.

You correctly remember that our target clients are institutional investors, including pension funds, endowments, etc. You are correct that they all need to see the PPM. However, it is extremely rare that those institutions need or want to have the PPM in the public domain.

I've read a bit about the qualified investor jazz. I guess as a bona fide hedge fund, you would need to perform some due diligence (e.g. see https://www.investopedia.com/articles/investing/092815/how-become-accredited-investor.asp). And I'm imagining that if someone jumps through the hoops, then you'd let them invest, but at some ginormous level. For your users who qualify, would you consider dropping the level to $X just to be good sports (where $X/$250M ~ 0)? Presumably, the SEC doesn't require a minimum investment by qualified investors.

Kinda bizarre that fiduciary institutions wouldn't feel compelled (or be legally required) to share everything they know about what they are doing with other peoples money. "We're just gonna put your money in a black box...I mean, a hedge fund, and everything will be just fine."

Also weird that the PPM document is on the QT. What's up with that? Do hedge funds have something to hide (not picking on you specifically)? I guess it gives it an air of exclusivity, or something...