Interval Funds
Jul 05. 17:52
Sweater Industries LLC Registers the Sweater Cashmere Fund

Sweater Industries LLC, an adviser operated by "democratized" VC Fund Sweater Ventures, registered the Sweater Cashmere Fund (the "Fund") on 7/01/2021, a closed-end interval fund that will focus primarily on investing in equity securities of private growth companies around the world, operating in the broadly-defined consumer product and emerging technology spaces ("Portfolio Companies").
The Fund intends to hold such securities through Portfolio Companies' liquidity events like public offerings or mergers in order to generate long-term capital appreciation for investors.
This is the second interval fund registration over a two-week period that intends to offer retail investors access to private venture capital investments, hunting a specific type of upside that Fundrise calls "private-public valuation arbitrage." Thus the Sweater Cashmere Fund joins a growing trend in broadening access to previously exclusive investment products.
The Fund's prospectus is clear that this "buy and hold" approach to betting on liquidity events should be viewed as illiquid, and is appropriate for investors looking to invest over the long term. The Fund anticipates that it will take approximately three years to deploy substantially all of its capital into these equity deals, and in the meantime, the Fund will invest proceeds in short-term, high quality debt securities, money market securities, and cash or cash equivalents.
Given that even junk bonds are showing historically low yields of roughly 4%, investors in the Sweater Cashmere Fund should manage their expectations of short-term fund performance, and instead look to Portfolio Companies' press releases for indications of potential liquidity events.
On the "Democratization of Finance"