FAQs: Private Markets & Alternatives for Healthcare Practitioners

🩺 Frequently Asked Questions (FAQs)

Private Markets & Alternative Investments 

1. What are Private Market and Alternative Investments?

Private Market and Alternative Investments are opportunities outside traditional stocks and bonds. They include assets like private equity, private credit, real estate, infrastructure, and hedge funds. For healthcare professionals, these can offer ways to diversify beyond your practice income and public market exposure.

2. Why should healthcare practitioners consider these types of investments?

Many healthcare professionals seek to balance their high but often concentrated income streams with long-term, diversified investments. Alternatives can help reduce reliance on public markets, potentially enhance returns, and offer exposure to unique opportunities such as medical real estate, healthcare venture capital, or private credit funds.

3. What’s the difference between public and private market investing?

Public investments (like stocks or ETFs) trade daily on exchanges and are highly liquid. Private investments, on the other hand, are not traded publicly, often have longer lock-up periods, and may take years to realize returns. However, they can offer access to institutional-quality opportunities and less market volatility.

4. Who can invest in Private Market and Alternative Investments?

• Qualified or Accredited Investors (often physicians, surgeons, or practice owners with higher income or net worth) can access private funds, private equity, or hedge fund opportunities directly.
• Non-Accredited Investors can still access alternatives through registered products like interval funds, tender-offer funds, or evergreen funds, which are designed to provide broader access with regulatory protections.

Your advisor or platform can confirm which category you fall into and what options are available.

5. What are the potential benefits for healthcare professionals?

• Diversification: Reduce reliance on public markets and your medical practice.
• Potential for higher returns: Access to private companies or projects not available in public markets.
• Inflation protection: Certain alternatives (like real assets or private credit) can provide income and hedge against inflation.
• Tax efficiency: Some structures may offer tax advantages depending on your financial situation.

6. What are the main risks I should be aware of?

Alternatives are generally less liquid, meaning you can’t easily sell them on short notice. They may also have complex fee structures, valuation uncertainty, and longer investment horizons (often 5–10 years). They’re best suited for practitioners with stable income and a long-term outlook.

7. How are these investments valued and reported?

Unlike daily-priced mutual funds, private investments are valued periodically—often quarterly—based on independent appraisals or internal models. You’ll typically receive performance updates and statements from your investment platform or advisor.

8. How long should I plan to hold these investments?

Private Market investments are meant for long-term investors, often with holding periods of 5 to 12 years. Healthcare professionals should view them as part of their long-term wealth strategy, not as short-term cash-flow tools.

9. How can I access these opportunities?

You can invest through:

• Registered alternative funds (for non-accredited investors)
• Private placements or feeder funds (for accredited/qualified investors)
• Wealth management platforms that specialize in alternatives
• Advised portfolios customized by financial professionals familiar with physicians’ financial goals

10. How do I know if alternatives are right for me?

Consider your:

• Liquidity needs (e.g., practice expenses, family goals, or major purchases)
• Risk tolerance (comfort with illiquidity and long-term commitments)
• Accreditation status (determines access level)
• Overall financial plan (alternatives should complement—not replace—traditional investments)

A financial advisor experienced in working with healthcare professionals can help determine the right allocation and structure for your situation.

TENDER OFFERS – FAQs

1. What is a Tender-Offer Fund?

A Tender-Offer Fund is a type of closed-end investment fund that allows investors to redeem their shares periodically—usually quarterly, semiannually, or annually—through a formal “tender offer” process initiated by the fund itself.

2. How does a Tender-Offer Fund differ from an open-end mutual fund?

Unlike mutual funds, Tender-Offer Funds do not offer daily liquidity. Instead, they provide limited redemption opportunities at specific intervals. This structure allows the fund to invest in less liquid assets such as private credit, real estate, or private equity.

3. How often can investors redeem their shares?

Redemption opportunities are typically offered quarterly or semiannually through a tender offer. The fund specifies the percentage of total shares that can be repurchased during each tender period.

4. How is the tender offer price determined?

Shares are usually repurchased at the fund’s net asset value (NAV) per share, as calculated on or around the tender offer’s expiration date.

5. Are there any fees or penalties for redeeming shares?

Some Tender-Offer Funds may charge early redemption fees or impose a short-term trading fee if shares are tendered within a certain period after purchase. Terms vary by fund.

6. What types of assets do Tender-Offer Funds invest in?

These funds often invest in illiquid or alternative assets such as private credit, hedge funds, private equity, real estate, or infrastructure—investments that are not easily traded on public markets.

7. Who can invest in a Tender-Offer Fund?

Many Tender-Offer Funds are designed for accredited or qualified investors, though some are available to retail investors through registered investment advisors or brokerage platforms.

8. What are the main risks associated with Tender-Offer Funds?

Key risks include limited liquidity, valuation uncertainty, market risk, and potential delays in redemption payments. Because of their illiquid holdings, investors should be prepared for a long-term commitment.

9. How do investors receive notifications about tender offers?

Investors are typically notified via written communication (email or mail) when a tender offer period opens, including details on deadlines, pricing, and procedures for submitting redemption requests.

10. Can the fund refuse or limit redemption requests?

Yes. If redemption requests exceed the amount the fund is willing to repurchase, the fund may accept only a prorated portion of each investor’s request, with the remainder carried over to future tender periods.

EVERGREEN FUNDS – FAQs

1. What is an Evergreen Fund?

An Evergreen Fund is an open-ended investment vehicle that does not have a fixed end date. Instead of liquidating after a set period, it continuously raises and invests capital, allowing new investors to join and existing investors to redeem over time.

2. How does an Evergreen Fund differ from a traditional private equity or closed-end fund?

Traditional private equity funds have a fixed life cycle—capital is raised, invested, and returned to investors before the fund closes. Evergreen Funds, by contrast, recycle capital and remain open indefinitely, giving them flexibility to reinvest proceeds and manage liquidity more dynamically.

3. What types of assets do Evergreen Funds invest in?

Evergreen Funds often invest in long-term, illiquid assets such as private equity, private credit, infrastructure, or real estate. Some may also include liquid assets to help manage redemptions and maintain portfolio balance.

4. How do investors subscribe or redeem shares in an Evergreen Fund?

Investors can typically subscribe (buy in) or redeem (sell out) at regular intervals—often monthly or quarterly—based on the fund’s net asset value (NAV). Redemption requests may be subject to notice periods or caps to maintain liquidity.

5. How is the fund’s net asset value (NAV) determined?

The NAV is calculated periodically (e.g., monthly or quarterly) based on the fair value of the fund’s underlying assets, as determined by independent valuation firms or the fund’s valuation committee.

6. What are the liquidity terms for investors?

Liquidity is limited compared to mutual funds. Evergreen Funds typically allow partial redemptions at set intervals and may impose redemption gates or limits to protect remaining investors and maintain portfolio stability.

7. What are the benefits of investing in an Evergreen Fund?

Key benefits include continuous access for new investors, the ability to compound returns over time, flexible redemption options, and exposure to long-term private market investments without the need to commit capital for a fixed term.

8. What are the main risks associated with Evergreen Funds?

Risks include limited liquidity, valuation uncertainty, market risk, and potential restrictions on redemptions during market stress. Because of their long-term investment focus, Evergreen Funds are best suited for investors with longer time horizons.

9. Who can invest in an Evergreen Fund?

Eligibility depends on the fund’s structure and regulatory registration. Some Evergreen Funds are available only to accredited or qualified investors, while others are registered and accessible to retail investors through financial advisors.

10. How do Evergreen Funds handle distributions and reinvestment?

Evergreen Funds may distribute income or realized gains periodically, or they may automatically reinvest proceeds to compound returns. Investors often have the option to receive cash distributions or reinvest them into additional fund shares.

🩺 Investor Classification

Overview for Healthcare Practitioners

1. Qualified Purchaser (QP)

Description:
A Qualified Purchaser is the highest investor classification under U.S. securities law (Investment Company Act of 1940). These investors have significant financial resources and experience, allowing them to access exclusive private funds (such as certain hedge funds, private equity, and venture capital vehicles) that are not available to the general public.

Typical Qualification Criteria:

• Individuals or families owning $5 million or more in investments (excluding primary residence and certain liabilities).
• Entities (e.g., medical practices, trusts, or family offices) owning $25 million or more in investments.

Relevance for Healthcare Practitioners:
High-earning physicians, practice owners, or those with substantial investment portfolios may qualify. This status provides access to institutional-grade private market opportunities with greater flexibility and customization.

2. Accredited Investor (AI)

Description:
An Accredited Investor meets specific income or net worth thresholds set by the SEC (Regulation D). Accreditation allows participation in private offerings and alternative funds that are not registered with the SEC, but still regulated.

Typical Qualification Criteria:
An individual qualifies if they meet one or more of the following:

• Income Test: Annual income of $200,000 (or $300,000 with spouse/partner) for the past two years, with a reasonable expectation of maintaining that level.
• Net Worth Test: Net worth over $1 million, excluding the value of the primary residence.
• Professional Certification: Certain licensed professionals (e.g., Series 7, 65, or 82) automatically qualify.
• Entity Test: A trust or LLC with over $5 million in assets or all owners are accredited individuals.

Relevance for Healthcare Practitioners:
Many physicians, dentists, and specialists meet accredited investor thresholds due to their income levels. Accreditation opens access to private real estate funds, private credit, venture capital, and hedge fund strategies.

3. Non-Accredited Investor (Retail Investor)

Description:
A Non-Accredited Investor does not meet the income or net worth requirements for accreditation. However, they can still access regulated alternative investment options that are designed for broader participation, with greater transparency and investor protections.

Typical Qualification Criteria:

• No specific financial thresholds.
• Must meet basic suitability and risk tolerance standards set by the advisor or platform.
• Can invest in registered alternative funds (e.g., interval funds, tender-offer funds, evergreen funds, or publicly registered REITs).

Relevance for Healthcare Practitioners:
Even early-career practitioners or those focusing on debt repayment can still access professionally managed alternative strategies through regulated vehicles that offer lower minimums and periodic liquidity.

🧭 Summary Snapshot

🩺 Suitability & Compliance Checklist

for Healthcare Practitioner Investors

1. Qualified Purchaser (QP)

Purpose: Verify eligibility for access to institutional and unregistered private funds (e.g., 3(c)(7) funds).

✅ Verification Steps

• Confirm ownership of $5 million or more in investments (excluding primary residence).
• For entities (e.g., medical practice partnerships, trusts, or family offices): verify $25 million or more in investments.
• Obtain third‑party verification letter (from CPA, attorney, or registered investment advisor) confirming QP status if required by fund manager.

📄 Documentation Required

• Recent brokerage and custodial statements showing qualifying investments.
• Balance sheet or net worth statement (prepared by CPA or advisor).
• Signed investor attestation form confirming QP status.

⚖️ Suitability Considerations

• Confirm client understands illiquidity, long‑term commitment, and capital call structures.
• Review portfolio concentration — alternatives should not exceed a prudent percentage of total investable assets.
• Ensure client has sufficient cash flow stability (e.g., practice income) to support long‑term investments.

2. Accredited Investor (AI)

Purpose: Determine eligibility for participation in private placements and Regulation D offerings.

✅ Verification Steps

• Verify income:
• $200,000 (individual) or $300,000 (joint) annual income for the past two years, with expectation to continue.
• OR verify net worth:
• Exceeds $1 million (excluding primary residence).
• OR verify professional credentials (e.g., Series 7, 65, or 82 licenses).
• Obtain third‑party verification from CPA, attorney, or RIA if required by offering.

📄 Documentation Required

• W‑2s, 1099s, or tax returns (for income verification).
• Bank, brokerage, or retirement account statements (for net worth verification).
• Professional license documentation (if qualifying via credential).
• Signed investor questionnaire confirming accredited status.

⚖️ Suitability Considerations

• Confirm investment aligns with client’s time horizon, risk tolerance, and liquidity needs.
• Discuss lock‑up periods, fees, and valuation frequency.
• Ensure client maintains adequate emergency reserves outside of private investments.

3. Non‑Accredited Investor (Retail Investor)

Purpose: Ensure suitability for participation in registered alternative funds (e.g., interval, tender‑offer, or evergreen funds).

✅ Verification Steps

• Confirm investor does not meet accredited or qualified purchaser thresholds.
• Conduct risk tolerance and suitability assessment via questionnaire or advisor interview.
• Review investment objectives (growth, income, diversification).

📄 Documentation Required

• Completed client profile and risk assessment form.
• Signed disclosure acknowledgment confirming understanding of liquidity limits and risks.
• Proof of identity (KYC/AML compliance).

⚖️ Suitability Considerations

• Ensure investment amount is appropriate relative to total portfolio (e.g., ≤ 10–20% of investable assets).
• Confirm client understands limited liquidity and valuation frequency of registered alternatives.
• Recommend periodic reviews to reassess suitability as financial circumstances evolve.

🧭 General Compliance Best Practices (All Investor Types)

🩺 Practical Tip for Healthcare Practitioners

Because many healthcare professionals experience fluctuating income (e.g., due to partnership distributions or practice ownership), it’s best to:

• Re‑evaluate investor status annually,
• Keep updated financial statements on file, and
• Adjust alternative allocations as practice or personal financial circumstances change.

GETTING STARTED & CLIENT ENGAGEMENT MODELS

🧩 1. Hybrid / Automated Model

(Blends digital automation with human advisor support)

Stage 1: Digital Introduction & Account Setup

• Welcome email / portal access: Client receives a secure link to create an online account and complete digital onboarding forms.
• Identity verification & compliance: Automated KYC/AML checks and e-signature of disclosures.
• Digital risk assessment: Client completes an interactive questionnaire to assess goals, risk tolerance, and time horizon.

Stage 2: Automated Portfolio Proposal

• Algorithmic recommendation: System generates a personalized portfolio based on client inputs.
• Advisor review: A licensed advisor reviews and validates the recommendation for suitability and compliance.
• Client confirmation: Client reviews and approves the proposed investment plan online.

Stage 3: Funding & Implementation

• Funding options provided: Client links bank accounts or transfers existing assets.
• Automated allocation: Portfolio is implemented automatically once funds are received.
• Advisor introduction: Client is introduced to their dedicated advisor for ongoing support.

Stage 4: Ongoing Engagement

• Digital monitoring: Clients receive automated performance reports and alerts.
• Periodic advisor check-ins: Scheduled virtual or phone meetings to review goals and make adjustments.
• Client education: Access to webinars, articles, and digital tools for financial literacy.

💻 2. Self-Directed Model

(Client-driven, technology-enabled, minimal advisor involvement)

Stage 1: Account Creation & Verification

• Online registration: Client creates an account through the platform.
• Compliance checks: Automated KYC/AML verification and digital acceptance of terms and disclosures.

Stage 2: Platform Orientation

• Guided walkthrough: Interactive tutorial introduces platform tools, trading interfaces, and research resources.
• Knowledge check (optional): Brief quiz or acknowledgment ensuring client understands self-directed responsibilities.

Stage 3: Funding & Trading Setup

• Link funding source: Client connects bank accounts or transfers assets.
• Trading permissions: Platform enables trading access once funds are cleared.

Stage 4: Independent Investment Activity

• Client-driven decisions: Client researches, selects, and executes trades independently.
• Automated reports: Platform provides real-time portfolio tracking, analytics, and tax reporting.
• Support access: Limited to technical or administrative help—no personalized advice.

Stage 5: Continuous Engagement

• Education hub: Access to market insights, tutorials, and research tools.
• Periodic platform updates: Notifications on new features, compliance updates, or product enhancements.

🧠 3. Advised Model

(High-touch, relationship-driven, advisor-led engagement)

Stage 1: Discovery & Relationship Building

• Introductory meeting: Advisor meets with client (in-person or virtual) to understand goals, values, and financial situation.
• Data gathering: Collection of financial documents, income details, and investment statements.
• Client profiling: Comprehensive risk and goals assessment conducted by advisor.

Stage 2: Proposal & Planning

• Customized financial plan: Advisor develops a tailored investment and financial strategy.
• Presentation meeting: Advisor walks client through recommendations, assumptions, and expected outcomes.
• Client feedback: Adjustments made based on client input before finalizing the plan.

Stage 3: Account Setup & Implementation

• Account opening: Advisor facilitates paperwork, digital signatures, and compliance checks.
• Funding: Client transfers initial investment capital.
• Portfolio execution: Advisor or investment team implements the agreed-upon strategy.

Stage 4: Ongoing Relationship Management

• Regular reviews: Scheduled quarterly or semiannual meetings to review performance, life changes, and goals.
• Proactive communication: Advisor provides market updates, strategic insights, and behavioral coaching.
• Comprehensive service: Integration of tax, estate, and retirement planning as needed.

Stage 5: Continuous Improvement & Retention

• Annual plan updates: Advisor revisits long-term goals and adjusts strategies.
• Client satisfaction surveys: Used to refine service quality and deepen engagement.
• Referral & advocacy: Happy clients encouraged to refer others, supported by client appreciation programs.

🩺 Private Markets & Alternatives – Investor Suitability & Compliance Checklist

(For Healthcare Practitioners: Physicians, Dentists, and Other Medical Practitioners)

Section 1: Client Information

Section 2: Investor Classification (Select One)

☐ Qualified Purchaser (QP)
☐ Accredited Investor (AI)
☐ Non‑Accredited / Retail Investor

Section 3: Qualification Verification

Section 4: Suitability & Risk Assessment

Section 5: Compliance Confirmation

Section 6: Advisor Certification

I confirm that I have reviewed the client’s financial status, investment objectives, and risk tolerance, and have determined that the recommended alternative investments are suitable based on the client’s profile and investor classification.

Advisor Name: ___________________________
Signature: ___________________________
Date: ___________________________

Section 7: Client Acknowledgment

I acknowledge that I have reviewed and understood the risks, liquidity terms, and investment time horizon associated with the proposed Private Market and Alternative Investments.

Client Name: ___________________________
Signature: ___________________________
Date: ___________________________

🧾 Optional Attachments

• ☐ Financial Statement Summary
• ☐ Verification Letter (CPA / Attorney / RIA)
• ☐ Risk Questionnaire Results
• ☐ Portfolio Allocation Summary

Quick Checklist Before You Invest

✅ I understand interval funds are illiquid between redemption windows.
✅ I’ve reviewed the fund’s strategy, risks, and fees.
✅ I can commit capital for the medium- to long-term.
✅ I know how and when I can request redemptions.

SUBMIT INQUIRY