Alternative Investments

Traditional First Trust Deeds

First trust deeds (FTDs) are a type of non-discretionary investment offered by Macoy Capital Partners, Inc. (Macoy), a real estate broker, that we may recommend to qualified clients to supplement their portfolio. These investments are offered to SEC “Accredited Investor” clients with over $1M in investable assets in accounts under FAN’s management.

When a client participates in these collateralized income-generating investments, they fund or purchase a borrower’s loan or portion of a loan, secured by real estate, and are entitled to interest payments for the duration of the loan. This investment vehicle can act as an alternative within the fixed income portion of a client’s asset allocation. FTDs generally increase portfolio diversification and can provide consistent and regular returns during volatile markets.

Example

If the targeted asset allocation of a client’s portfolio would normally be 40% fixed income, then the client could replace a portion of this 40% target with FTDs. For example, if a client has $1M invested at FAN, with a 60/40 risk allocation, then they may be permitted to invest up to $400,000 (i.e. 40% of their investable assets) in FTDs (may be limited to 25%).

Each investment opportunity through Macoy requires a minimum investment of $40,000, and for diversification purposes, an investment in a single FTD cannot exceed 5% of the client’s assets under management (typically limited to 3.5%). Please note that investment limits are determined at our discretion based on each client’s personal situation and risk tolerance.

First Trust Deed Funds

We are excited to announce that we are now offering qualified investors a first trust deed alternative in the form of a first trust deed fund provided by our new strategic alliance, Futures Financial, LLC. Investors participating in funds can view and track progress through Futures Financial’s Investor Portal.

Investing in FTDs involves unique risks, including possible loss of principal. Funds may be idle in cash before and/or between FTD opportunities. Taxes will differ depending upon the type of funds used (taxable, tax-deferred, or tax-free). There is no assurance that the techniques and strategies discussed are suitable for all investors or will yield positive outcomes.

Every FTD investment opportunity is comprised of multiple investors. Not all clients are considered qualified. All FAN clients that invest in FTDs will be required to attend or view a recording of a FTD informational session and sign our Millennium Trust Company and First Trust Deed Investments ADV Disclosure Addendum as well as complete investment paperwork through Macoy. If clients decide to participate, they will continue to pay their household’s FAN advisory fee on the amount of the FTD investment as agreed upon in your FAN Wrap Fee Agreement. More information regarding the unique risks of FTD investments can be found in our SEC ADV Firm Brochure.