Savvly Fund 3 and Savvly Advisor, LLC - Notice of Application for Exemptions under the Investment Company Act
AI-generated summary for informational purposes only. Not legal advice. See the original source for the authoritative text.
The SEC is considering an application from Savvly Fund #3, a closed-end fund investing in S&P 500 ETFs, and its adviser Savvly Advisor, LLC. The fund wants to issue common shares plus multiple series of preferred "Tracking Shares" that allow remaining investors to receive reallocated "excess value" from early withdrawals or deaths of other shareholders. Shareholders are divided into units tied to payout ages (80, 85, 90, 95). Early withdrawers forfeit most gains and Tracking Share value, with penalties (after a reallocation fee) redistributed via a formula based on age, longevity tables, investment size and time invested to boost returns for long-term holders. The structure requires exemptions from sections 18(c), 18(i) and 23(c) of the Investment Company Act to operate with these differentiated share classes and repurchase features.
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Key Changes
- Exemption from sections 18(c) and 18(i) to issue multiple series of preferred Tracking Shares with different distribution rights
- Exemption from section 23(c) to allow repurchases of shares upon early withdrawal or reaching payout ages (80, 85, 90, 95)
- Early withdrawal penalty: 75% of purchase price (plus 1% per year up to 100%) or NAV if lower; zero value for unvested Tracking Shares
+ 3 more changes with Pro
Obligations
What this law requires
Savvly Fund #3 must register as a closed-end investment company under the Investment Company Act of 1940 and register the offering of its shares under the Securities Act of 1933
Savvly Advisor, LLC must maintain registration as an investment adviser under the Investment Advisers Act of 1940 and serve as investment adviser pursuant to a written investment management agreement
Savvly Fund #3 must obtain SEC exemptions from sections 18(c), 18(i), and 23(c) of the Investment Company Act to issue multiple series of preferred Tracking Shares with differentiated distribution rights and implement the repurchase mechanism
The Initial Fund must implement the Allocation Formula licensed from Savvly to distribute excess value from early withdrawals to remaining shareholders based on longevity factors, investment size, and years invested
Savvly Fund #3 must restrict share ownership to natural persons only and prohibit transfer of shares except to a shareholder's estate or beneficiaries upon death