CION Announces New Share Structure
May 2, 2017 | by Beth Glavosek | Blue Vault
CION has announced a new “T share”-type structure for its offering, effective Monday, May 1, for its CION Investment Corporation (CIC) product. CIC is a credit-focused business development company that primarily invests in the debt of private and thinly-traded U.S. middle market companies. Its investment objective is to provide investors with monthly distributions derived from the interest on its loans, which are typically structured as floating rate, senior secured investments.
CIC’s compensation structure provides for a 5% upfront load that consists of a 3% upfront commission plus a 2% Dealer Manager Fee. The adviser, CION Investment Management, may also pay a 1% ongoing fee to dealers, or “trail fee” (.25% a quarter for the remaining three years). The 1% is paid quarterly in arrears on a brokerage account’s net asset value (NAV) for the quarter.
Notably, CION Investment Management, not the Fund’s assets, will cover the trailing payments. Therefore, valuations, distributions, and the investor’s account performance should not be affected in any way. Monies will be coming in equal amounts from CION and Apollo, CION’s sub-adviser.
“While we as an industry continue to wait for the SEC to grant BDCs the right to offer multiple share classes, we felt this move was an innovative way to make CIC- an already a top performing product- even more compelling for our partners,” says Michael Reisner, co –CEO of CION Investments.
Trailing payments to the Broker Dealer will stop if there is a liquidity event, or if the Broker Dealer on record changes. The trail will also stop if CION Investments is no longer an Investment Adviser. The compensation will comply with FINRA 2310 guidelines for the lifetime of the offering.
CION Investments is a leading manager of alternative investment solutions that focuses on alternative credit strategies for individual investors.
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