Preferred Return
9% per annum, non-compounding, subject to the governing documents and availability of distributable cash. The Preferred Return is not a guaranteed payment and no assurance is given that it will be met in any period.
Fund terms
Class A Units — principal terms.
A summary of the principal terms of Karncy SME Synergy Fund, LLC. Definitive terms are set out in the Private Placement Memorandum, Company Agreement and Subscription Agreement.
- Fund
- Karncy SME Synergy Fund, LLC
- Structure
- Texas limited liability company / pooled investment vehicle
- Formation
- August 16, 2024
- Offering
- Class A Units
- Maximum offering
- USD 20,000,000
- Minimum capital commitment
- USD 100,000, subject to Manager discretion
- Investor eligibility
- Accredited Investors
- Exemption
- Regulation D Rule 506(c) and Section 4(a)(2)
- Preferred return
- 9% per annum, non-compounding
- Lock-up
- 36 months from subscription
- Withdrawal after lock-up
- 90 days' written notice after the Lock-Up Period
- Fund term
- Perpetual until terminated pursuant to the governing documents
Distribution mechanics
How realised returns are shared.
First
Investor minimum of 9%
Actual returns realised and available for distribution are first applied so that Class A Members receive their 9% per annum Preferred Return. The Manager receives no allocation until that minimum has been met.
Thereafter
20% Manager allocation
Where returns exceed the 9% minimum, the Manager is allocated 20% of the actual realised and distributable return, limited so that Class A Members still receive at least their 9% Preferred Return.
The Manager allocation is calculated on actual returns realised and distributable, and applies only where investors receive a minimum 9% return for the period. If realised returns are at or below 9%, the Manager receives nothing for that period.
The first annual distribution is not anticipated before December 31, 2027.
Please refer to the Private Placement Memorandum and Company Agreement for complete distribution mechanics.
An illustrative tool only. Outputs are hypothetical, are not projections and do not reflect actual or expected Fund performance.
Offering & capital mechanics
How commitments are called and held.
Offering Period
From the effective date of the Private Placement Memorandum and on an ongoing basis thereafter, unless earlier terminated or extended by the Manager.
Commitment Period
From the date an Investor subscribes through twelve (12) months thereafter, unless earlier terminated or extended by the Manager.
Capital Calls
Up to 100% of the Capital Commitment may be due upfront as the Initial Capital Contribution, with any remaining amount due upon Capital Calls, typically within 30 days of the call.
Equity interests
Class A Members represent up to a 99.9% equity interest; Class B Units currently outstanding represent 0.1%.
No escrow
Subscription funds are deposited into the Fund's operating account upon acceptance of a subscription and are not held in escrow or a segregated deposit account.
Distribution timing
The first annual distribution is not anticipated before December 31, 2027.
Leverage
The Fund does not currently intend to seek debt financing or use leverage, although credit lines may be utilised at the Manager's discretion.
Side Letters
The Manager may enter into Side Letters granting concessions to certain investors without offering them to other Members.
Financial statements
The Fund does not plan to engage an auditor at this time. Any financial statements prepared and distributed will be unaudited but prepared substantially in compliance with US GAAP.
Distribution frequency
The Fund intends to make distributions annually following the close of each calendar year, subject to available Distributable Cash, portfolio performance, working capital requirements, reserves and Manager discretion. The first annual distribution is not anticipated before December 31, 2027.
Lock-up and withdrawal
Class A Members are generally locked in for 36 months from subscription. Withdrawals during the Lock-Up Period require prior written Manager consent. After the Lock-Up Period, 90 days' written notice is required, subject to liquidity, applicable law, the governing documents and Manager approval and processing.
Tax reporting
The Fund expects to be treated as a partnership for U.S. federal income tax purposes and Members will receive a Schedule K-1 to IRS Form 1065. Members may recognise taxable income without corresponding cash distributions.
Fund term
The Fund is perpetual until terminated pursuant to the governing documents.
For accredited investors
Request the Fund materials.
Access to the Private Placement Memorandum and related documents follows eligibility and accreditation verification.
Accredited Investors Only | Private Offering | Subject to Definitive Offering Documents