Here are some recent questions we’ve received from investors who want to invest in the 10,000 Days Fund LP. If you have any questions that you don’t see on here or just want to start a dialogue with Cody about the hedge fund, please email [email protected].
Q. Is it possible to put the 10,000 Days Fund inside an IRA?
A. Yes, it is possible to put the 10,000 Days Fund LP inside an IRA.
Q. Is it possible to lose more money than is invested in the 10,000 Days Fund?
A. No, it’s not possible to lose more money than is invested in the 10,000 Days Fund LP.
Q. What are the tax implications of the 10,000 Days Fund?
A. Pretty standard tax implications like any other investment you might have.
Q. Are profits distributed on a regular basis or is each partner responsible for deciding when to take withdrawals after the 3 year lockup?
A. Each partner will be responsible for deciding when to take withdrawals (if any) after the initial three year lockup. That said, I expect that most of our partners will never take any withdrawals for many years.
Q. What kind of tax reports are submitted to partners?
A. Standard S-1 tax reports are submitted to partners in a timely fashion after each year.
Q. Can lockups be re-instituted after the 3 year lockup as in the movie The Big Short?
A. No, we won’t be re-instituting any additional lockups.
Q. Is there a “highwater” mark?
A. Yes. At the end of each fiscal year, 20% of the net profits (including net unrealized gains) allocated to the capital account of each Limited Partner will be reallocated to the capital account of the General Partner (the “Incentive Allocation”), subject to a loss carryforward provision (sometimes referred to as a “highwater mark”).
The General Partner will be allocated the Incentive Allocation as of the end of each fiscal year. In the event that a Limited Partner makes a complete withdrawal or is required to make a complete withdrawal at any time other than the end of a fiscal year, the General Partner will allocate the Incentive Allocation with respect to the withdrawn amount, on the applicable withdrawal date as if it were the end of the fiscal year.
Under the loss carryforward provision contained in the Partnership Agreement, no Incentive Allocation will be made with respect to a particular Limited Partner’s capital account for a fiscal year until any net loss previously allocated to such capital account has been offset by subsequent net profits. The loss carryforward attributable to a particular Limited Partner’s capital account will be reduced for withdrawals on a pro rata basis.