Princeton Everest Fund Extends Share Buyback Deadline

The Fund offers to repurchase up to 5% of shares at net asset value, with payments structured in promissory notes.

October 14, 2024

Share Repurchase and Key Conditions

The Princeton Everest Fund has announced an extension to its current share buyback program, allowing shareholders until November 8, 2024, to tender their shares for repurchase. This offer, part of the Fund’s ongoing strategy to provide liquidity, aims to purchase up to 5% of the Fund’s outstanding shares across its four share classes: Class A, Class I, Class II, and Class L.

The shares will be repurchased at the net asset value (NAV) as of December 31, 2024, which will be calculated post-repurchase. Shareholders who have held their shares for less than one year will face a 2% early redemption fee. Importantly, there are no fees for shareholders who have held their shares for longer than one year, making this an attractive liquidity event for long-term investors.

Shareholders may tender all or part of their holdings, provided they maintain a minimum balance in accordance with their share class requirements. If any tender leads to a balance below the minimum, the Fund reserves the right to reject the tender or adjust it to maintain account requirements. Payments for repurchased shares will be made in two parts: an initial cash payment for 95% of the share value and a final payment based on the audited NAV, delivered after the Fund’s annual financial review in March 2025.

Oversubscription and Extended Periods

In the case of oversubscription, the Fund has outlined several potential responses. It may extend the repurchase period, increase the amount of shares being repurchased, or accept tenders on a pro-rata basis. This flexibility ensures the Fund can meet the liquidity needs of shareholders while maintaining its financial health.

Shareholders who wish to cancel their tenders may do so at any time before the November 8, 2024, deadline. Once a cancellation is made, they may re-tender their shares as long as it is before the final expiration date. This flexibility allows investors to reconsider their decision based on changing market conditions or personal circumstances.

Funding the Repurchase

Princeton Everest Fund plans to finance the repurchase through a combination of available cash, proceeds from the sale of portfolio securities, or if necessary, through borrowings. The Fund’s Board of Trustees would need to approve any borrowing, but it remains a secondary option to preserve the Fund's portfolio strategy. The Fund's management has emphasized that they expect to fund the buyback without needing to alter its investment objectives significantly.

Moreover, by tapping multiple sources of funding, the Fund aims to ensure liquidity for shareholders without creating undue stress on the overall portfolio or altering its long-term investment strategy. Borrowing will only be considered if necessary, with a preference for relying on asset liquidations or new shareholder contributions.

Impact on Financial Structure

Shareholders who participate in the repurchase offer should be aware of the potential impact on the Fund’s financial structure. The decrease in assets could lead to higher costs for remaining investors due to fixed operational expenses. However, this could be mitigated if the Fund continues to accept new subscriptions, which would spread those costs over a larger asset base.

Additionally, shareholders should consider the tax implications of the repurchase. Any gains realized from the sale of shares may be subject to capital gains tax, depending on the duration the shares were held. For those recognizing a loss, it will only be acknowledged once full payment has been received for the tendered shares. The Fund has advised all shareholders to consult with their tax advisors to fully understand the implications of participating in the tender offer.

Conclusion

The extended buyback period presents a valuable liquidity opportunity for Princeton Everest Fund shareholders, particularly those seeking to liquidate portions of their holdings at current net asset values. While reducing the size of the Fund, the structured nature of the repurchase ensures minimal disruption to the Fund’s broader financial strategy and portfolio management. Investors have until November 8, 2024, to take advantage of the offer and decide whether to tender their shares under favorable conditions.