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Frequently Asked Questions (FAQ)
What is the Rising Wealth Fund LP?
Rising Wealth Fund LP is a Delaware-based private credit fund managed by Persevere Capital. The Fund invests in real estate-backed private credit opportunities, including first and second position loans, with the goal of generating stable, income-driven returns. The Fund is offered under Regulation D Rule 506(c), which allows public marketing but requires all investors to be verified accredited investors.
How does a 506(c) fund work?
A 506(c) fund is a private offering exemption that permits general solicitation, but every investor must be a verified accredited investor. The Fund must take reasonable steps to verify accreditation, and interests are sold only through the Fund’s official subscription documents. Because the Fund is a private partnership rather than a REIT or public fund, it has greater flexibility in investment structure, reinvestment of income, and cash flow management.
Can the Fund be held in non-taxable or tax-advantaged accounts?
Yes. Investors may hold their Fund interests through certain self-directed retirement accounts or trust structures, including accounts administered by Madison Trust Company or other qualified custodians, subject to custodian approval.
Who is eligible to invest?
Only accredited investors may invest in the Fund. Under Regulation D, an accredited investor includes: Individuals with income of at least 200,000 dollars individually, or 300,000 dollars jointly with a spouse, in each of the last two years with a reasonable expectation of the same in the current year. Individuals with a net worth exceeding 1,000,000 dollars, alone or with a spouse, excluding the value of their primary residence. Individuals holding certain securities licenses such as Series 7, Series 65, or Series 82. Entities such as trusts, partnerships, and corporations with more than 5 million dollars in assets or whose equity owners are accredited investors.
What documentation is required to verify accredited investor status?
Because this is a 506(c) offering, all investors must have their accredited status independently verified. Verification may include reviewing recent tax returns or W-2/1099 forms for income, or reviewing bank and brokerage statements, appraisals, and a list of liabilities for net-worth qualification. Investors may also provide a verification letter from a CPA, attorney, SEC-registered investment advisor, or broker-dealer who has reviewed their financial documents. In some cases, larger investment commitments with supporting documentation may satisfy the requirement. Exact verification steps are provided during the subscription process.
How do I invest in the Fund?
Investors may subscribe by creating an account through our secure online investor portal. After registering, investors can review the Private Placement Memorandum, complete the subscription documents, and upload accreditation verification materials. After accreditation is verified and the subscription is accepted, the investor becomes a Limited Partner in the Fund.
Who provides accounting, administration, and reporting?
The Fund’s accounting and fund administration are handled by Formidium, an independent third-party fund administrator. Formidium prepares financial reporting, maintains capital accounts, provides investor statements, and assists with K-1 tax reporting.
How often do investors receive statements?
Investors receive a formal monthly statement through the investor portal. These statements provide updates on capital accounts, income allocations, and other relevant activity for the period.
How often does the Fund distribute income?
The Fund distributes income monthly to Limited Partners, subject to available cash flow and the Fund’s distribution policy.
How is the Fund taxed?
The Fund is a pass-through limited partnership and does not pay taxes at the fund level. Instead, each investor receives a Schedule K-1 each year reflecting their share of the Fund’s income, deductions, and expenses. Most Fund income is expected to be ordinary interest income generated from private credit investments. Because the Fund is not structured as a REIT, it is not required to distribute 90 percent of taxable income, giving it greater flexibility to reinvest earnings when beneficial. Investors should consult their personal tax advisor to determine how K-1 income affects their individual tax situation.
What is the minimum investment?
The minimum investment is specified in the Fund’s offering documents. Investors should review the Private Placement Memorandum for complete details.
Is there a lock-up period?
Yes. The Fund has a 12-month lock-up period for new investors. After this period, redemptions are permitted quarterly, subject to the Fund’s governing documents and available liquidity.
What are the primary risks?
Private credit investments involve risk, including borrower default risk, real estate market changes, interest rate risk, and illiquidity. Investments in the Fund are suitable only for investors who can bear economic loss. All material risks are described in detail in the Private Placement Memorandum.
Who manages the Fund?
The Rising Wealth Fund LP is managed by Persevere Capital, a private credit and real estate investment manager with extensive experience in underwriting, servicing, and structuring collateralized credit investments.
Will the Fund always make a monthly distribution?
The General Partner intends to make monthly distributions; however, distributions are not guaranteed. The GP retains full discretion regarding the timing and amount of any distribution. Market conditions, liquidity needs, borrower performance, or other operational considerations may result in periods where a distribution is not suitable or not made. Investors should review the Private Placement Memorandum for complete details on the Fund’s distribution policy.
What is private credit real estate, and how does it compare to other private credit strategies?
Private credit real estate involves originating or acquiring loans secured by real property, such as residential and select commercial real estate. Our Fund’s portfolio is collateralized by tangible assets with recorded liens.
Traditional private credit funds may invest in non-asset-backed corporate loans, such as those secured by IP, accounts receivable, or other intangible assets. Real estate–backed credit is typically viewed as offering more downside protection due to the presence of underlying collateral, though it carries its own risks described in the PPM.
How are loans sourced for the Fund?
The Fund sources opportunities through Persevere Capital’s established network of borrowers, brokers, and real estate operators, as well as direct correspondence and repeat borrower relationships. All opportunities undergo underwriting, valuation analysis, sponsor review, and collateral assessment prior to approval. Further detail is provided in the Fund’s PPM and underwriting policy.
What types of loans does the Fund invest in?
The Fund primarily invests in first-lien and second-lien short-duration real estate loans, including bridge loans, fix-and-flip loans, construction-related credit, and other senior or subordinate credit instruments. Loan types may vary based on market conditions and opportunities available to the GP.
What is the typical loan-to-value (LTV) ratio?
The Fund generally targets conservative LTV ratios designed to protect principal, but actual LTVs vary by asset type, borrower profile, market conditions, and lien position. Investors should consult the PPM for target metrics and risk disclosures.
How does the Fund mitigate borrower default risk?
Risk mitigation includes collateralized loan structures, property-level underwriting, borrower credit evaluation, conservative LTV thresholds, title insurance, legal documentation, and active loan servicing. In the event of default, the Fund may exercise remedies available under its security documents, including foreclosure, subject to legal and market considerations.
What happens if a borrower defaults?
In a default scenario, the Fund may pursue contractual remedies such as late fees, workout negotiations, collateral enforcement, or foreclosure. Recovery outcomes depend on numerous factors including seniority, market conditions, and collateral value. The PPM details risks and recovery processes.
Does the Fund use leverage?
The Fund may use leverage at the Fund level or investment-level to enhance returns or manage liquidity, subject to the GP’s discretion. Any leverage increases both potential returns and risks. Investors should review the PPM for leverage policies and limitations.
How liquid is this investment?
Private credit funds are inherently illiquid. Rising Wealth Fund LP has a 12-month lock-up period, after which redemptions may be requested quarterly, subject to available liquidity and the Fund’s governing documents. Redemptions are not guaranteed.
How are investor returns generated?
Returns are primarily generated from interest income, loan origination fees, extension fees, and other credit-related charges earned from Fund loans. Actual returns depend on portfolio performance, borrower behavior, and market conditions.
How does the Fund’s risk profile compare to equity real estate investments?
Private credit secured by real estate is generally considered lower on the capital stack than equity investments, offering fixed income and collateral protection. However, it also has limited upside compared to equity and carries risks such as borrower default. Investors should evaluate risk tolerance and read the PPM carefully.
What reporting is provided to investors?
Investors receive monthly statements, quarterly commentary or updates (if provided by the GP), and annual audited financials when applicable. Tax reporting is delivered via Schedule K-1 each year.
Are the Fund’s financials audited?
The Fund engages independent third-party service providers for administration and may engage auditors as described in the PPM. Investors should review the PPM to confirm the Fund’s audit policy and reporting schedule.
How are fees structured?
The Fund charges management and/or performance-based fees as described in the Limited Partnership Agreement and PPM. Fees may include management fees, incentive allocations, and other fund-level expenses. Investors should review the offering documents for the exact terms.
Is my investment capital deployed immediately?
Capital deployment timing depends on deal flow, market conditions, and existing loan pipeline. The GP aims to deploy capital prudently rather than quickly, prioritizing quality underwriting. Some capital may remain undrawn or unallocated during ramp-up periods.
How does the Fund value its loan portfolio?
The Fund values loans based on principal outstanding, accrued interest, and fair-value adjustments when necessary. Third-party administrator Formidium assists with valuation methodology and reporting. Illiquid private credit valuations involve judgment and are subject to change.
Does the GP or its principals invest in the Fund?
The GP and/or its principals may invest in the Fund, aligning interests with Limited Partners. Specific details, if applicable, are disclosed in the PPM.
How are conflicts of interest handled?
Potential conflicts are disclosed in the PPM. The GP implements policies intended to allocate opportunities fairly and act in the best interests of the Fund, though conflicts may still arise in multi-fund or related-party transactions.
Does the Fund issue capital calls?
The Fund may accept capital through a single funding event or utilize capital call structures depending on the operating model. Details are outlined in the subscription documents and PPM.