Frequently Asked Questions

A flex is an exchange-traded product (in the form of a note) that provides a solution for investment management and distribution. The flex’s price is linked to the value of the underlying assets or Portfolio.

The Issuer of the program is an Irish public limited liability company that has been established as a Special Purpose Vehicles. The principal activity of the Issuer is the issuance of flex Notes.

FlexFunds partners with asset managers worldwide to provide administration services for exchange traded products. FlexFunds’ asset securitization program makes structuring of ETPs simple for our customers, including fund accounting and back office services, corporate administration services, and product launch coordination. FlexFunds does not provide investment, legal, accounting or tax advice. FlexFunds is not an investment advisor or a broker dealer.

A flex is issued by the program’s Issuer at the request of an investment advisor, developer or project manager as the named Portfolio Manager. The Portfolio Manager has full control of the investment strategy, though for legal purposes has no issuer-related liability. FlexFunds can arrange a flex issuance for many kinds of investment professionals, such as registered investment advisors, portfolio managers, broker-dealers, family offices, and other money and asset managers.

The timing to complete an issuance is around 4 weeks for the flexportfolio and about 6 weeks for the flexfeeder. Issuance timing is dependant on a timely completion of the initial term sheet by the Portfolio Manager.

It takes about 8 business days to issue an additional tranche on an existing flex Series.

The strategy is managed by an appointed Portfolio Manager. The investment strategy is defined on the Issuance documents according to the Portfolio Manager’s direction. Also, the Portfolio Manager may establish the terms for their Management fee, which will be disclosed in the Issuance Documentation.

Administration costs inherent in managing investment portfolios average just less than one percent of assets under management, exclusive of management fees. By utilizing a flex as an investment management vehicle the Manager can reduce these administrative costs by as much as forty percent or more with the savings being passed through to the client or retained by the advisor in the form of an increased management fee. In addition, the flex’s distribution advantages and efficient administration allow managers to focus on growing their assets under management.

The cost to establish a flex is very competitive and designed to allow for low risk launch and inexpensive maintenance. Final costs depend upon several factors, including, among other things, the types of underlying assets and the issue size. For information about the costs of establishing a flex for your investment portfolio or special project please contact our client relations team at [email protected]

For a manager, the flex Program provides complete administration services by some of the most well-known and top-tier financial institutions in the world, allowing the Manager to concentrate entirely on managing assets and growing the size of their portfolio. Furthermore, Investors in partnerships and limited liability companies are required, in most jurisdictions, to realize capital gains and losses in the year of the transaction. However, when the investor invests in the managed portfolio through a flex the investor will not realize a taxable event until the note is sold or redeemed.

The Irish SPVs are Reporting Financial Institutions for purposes of CRS/FATCA, but it reports no “reportable accounts” because all holders of the issued notes are reporting financial institutions that have the responsibility for doing the relevant CRS/FATCA reporting. The Irish SPVs, through their Trustees, make a filing to that effect.

All flex are registered with Euroclear or Clearstream and are assigned a unique ISIN/CUSIP number, permitting the investors to purchase the note directly through their existing brokerage account.

flex series are listed in the Vienna Stock Exchange and it is cleared through Euroclear.

For the FlexPortfolio, the Custody Accounts can be opened in Interactive Brokers and Bank of New York Mellon. Portfolio Managers can invest directly through these platforms.

flex Notes may be subject to selling restrictions in several jurisdictions. In the United States, the notes fall under Regulation S and cannot be purchased by U.S. persons. Some restrictions apply to investors in the European Union in accordance with the prospectus directive regulation.

flex has been designed for non-U.S. investors. In the United States, it is considered a Reg S security and therefore are subject special restrictions. We recommend you consult with your legal counsel regarding the Reg S restrictions and always before making any investment decisions.

flexs are listed with a registered depository such as Euroclear or Clearstream, therefore, a note can be purchased by non-U.S. investors worldwide, significantly easing the flow of foreign capital into U.S. projects; meaning foreign investors can invest in a U.S. project or a U.S. money manager’s strategy quickly and directly through their existing brokerage account.

Once issued, the notes can be transferred between investors. Investors should be aware of any selling restrictions applicable in their jurisdiction.

The minimum investment varies depending on the residence of the investor. In most Central and South American countries there is no regulatory minimum, but the advisor for whom a note is issued may establish their own minimums. Investors within the European Union might be required to invest a minimum of one-hundred thousand Euros. Other requirements may be present for specific jurisdictions, please contact us for more information on flex requirements and restrictions.

There is no secondary market available for flex Notes, the participations may be issued and redeemed or existing notes may be transferred from one investor to another.

The NAV is calculated on a regular basis (monthly/weekly) in accordance to the composition of the Portfolio. The NAV is published in Bloomberg as well as distributed to the investors’ brokerage accounts.

The Calculation Agent is FlexFunds ETP, LLC.

Yes, investors who purchase a flex through their brokerage account will see the security price reflected on their brokerage account statement on a regular basis.

The value of a flex seen on a brokerage account statement will depend upon the composition of the portfolio; a portfolio consisting solely of market-priced securities will reflect the NAV (Net Asset Value) of the flex’s underlying securities minus operating expenses and fees, while a portfolio consisting of non-marketable securities or other assets may be reflected at cost.

Yes. The price of the flex (NAV) is distributed to the investor’s account through FlexFunds’ price dissemination partners: Thomson Reuters, Bloomberg and Six Financial, on a pre-established regular basis.

Each flex Series will have a unique ISIN number and Bloomberg page.

A Manager can arrange for the origination of a flex with as little as a few millions in assets under management. Please contact our client relations team at [email protected] to find out more about what is required to issue a flex.

The appointed Portfolio Manager will establish the terms for their management fee in the Series Documentation, the fee is deducted periodically from the Portfolio. Managers may also charge performance fees (i.e., 2/20 structure). In essence, the flex program allows for the fee arrangement that best suits the Portfolio Manager and its clients.

The Portfolio Manager can be a regulated entity in its specific jurisdiction. This entity is designated when the series is created and will abide by the determined strategy in the portfolio management agreement.

The Portfolio Manager gets paid directly by the paying agent from the assets held within the note’s underlying account.

The name of the flex Series will be custom for each Series. However, some Custody Platforms will show the name of the Issuer in combination with the assigned name.

The flex series are open by default, they allow for additional increases over the life of such Series. However, a Manager may choose to create a closed Series.

A flex offers great flexibility in the type of allowed underlying assets. The strategy can invest in either listed or unlisted securities and assets. Furthermore, underlying assets can originate from different countries (with some restrictions).

A flex can mature in 2 to 30 years, and the maturity can be extended indefinitely. The Notes can be called or redeemed pursuant to the terms set forth in the issuing documentation; the advisor has significant flexibility with respect to the terms of the flex Series issued on their behalf.

No, a flex is not required to make interest payments at any certain rate or at any specific times, unless set forth in the prospectus and issuing documentation. The distribution of gains, losses and earned interest is determined by the advisor as are the procedures and valuation methods to be applied for early redemptions, liquidations, and at the flex maturity.

No, the flex Notes are Exchange Traded Products which are purchased directly from the investor’s brokerage account. There is however a Series Memorandum, which specifies the Conditions of the Notes (terms of investment) as well as identifying Risks and providing information on the transaction Parties and the Series Assets.