Fund level Accreditation Letter
If your fund is investing in other syndications where you are not a co-Manager, its likely you will be requested for a letter by the deal sponsor verifying that your fund is an accredited entity.
There are 2 ways that an entity is considered accredited.
- The entity has over $5 million in assets
- All beneficial owners of the entity are accredited investors themselves.
With a new fund, since you will not initially meet the $5 million in assets test, you will need to specify the 2nd method as how your fund is accredited. Avestor recommends that you maintain a valid accreditation letter at all times.
Avestor has partnered with various providers that can provide you a letter. It requires you to maintain an ongoing relationship with the same provider so that they can verify all investors are accredited without having to re-verify each investor.
The process will be as follows:
- When each investor onboards, you will obtain an unexpired verification letter from that investor or that investor will use our provider for that verification letter.
- All verification letters will be maintained in a shared folder with the provider.
- Each quarter, the provider will then provide a verification letter that the fund consists of all accredited investors and issue a valid letter to the fund.
Until your fund reaches $5 million in assets, it is important that you maintain a relationship with a single provider to ensure that the provider is confident that all investors in the fund are accredited investors.
Avestor can assist in providing you names of service providers that can assist with the fund accreditation letter.
