A commingled fund is a fund consisting of assets that are pooled together, enabling potential benefits from diversification and economies of scale compared to separate accounts. The risk profile of a commingled fund (such as the Manning Monthly Income Fund) will differ from a separately managed account (which holds assets specifically selected by or on behalf of an investor). The liquidity risk profile may differ given the ability of other investors in the Fund to request redemptions. Redemptions can be funded through a number of sources – through cash held in the fund, underlying asset repayments and if required through asset sales. Although the Fund will aim to manage liquidity to enable redemption requests to be met in a timely manner, in certain cases redemptions may be suspended if not in all remaining investors’ best interests. If there are significant redemptions resulting in the Fund reducing in size, investors who remain in the Fund may have exposure to a more concentrated pool of remaining assets (“tail risk”).
Credit and interest rate risk will also be borne on the Fund’s underlying exposures.