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Morgan Stanley Smith Barney LLC (“Morgan Stanley Wealth Management”) – IMPORTANT DISCLOSURES
Alternative Investments may be highly illiquid and can engage in leverage and other speculative practices that may increase the volatility and risk of loss.
Alternative investments typically have higher fees than traditional investments. Investors should carefully review and consider potential risks before investing. Certain of these risks may include but are not limited to:
As a diversified global financial services firm, Morgan Stanley Wealth Management engages in a broad spectrum of activities including financial advisory services, investment management activities, sponsoring and managing private investment funds, engaging in broker-dealer transactions and principal securities, commodities and foreign exchange transactions, research publication, and other activities. In the ordinary course of its business, Morgan Stanley therefore engages in activities where Morgan Stanley Wealth Management’s interests may conflict with the interests of its clients, including the private investment funds it manages. Morgan Stanley Wealth Management can give no assurance that conflicts of interest will be resolved in favor of its clients or any such fund.
All expressions of opinion are subject to change without notice and are not intended to be a forecast of future events or results. Further, opinions expressed herein may differ from the opinions expressed by Morgan Stanley Wealth Management and/or other businesses/affiliates of Morgan Stanley Wealth Management.
This is not a “research report” as defined by FINRA Rule 2241 or a “debt research report” as defined by FINRA Rule 2242 and was not prepared by the Research Departments of Morgan Stanley Smith Barney LLC or Morgan Stanley & Co. LLC or its affiliates.
Certain information contained herein may constitute forward-looking statements. Due to various risks and uncertainties, actual events, results, or the performance of a fund may differ materially from those reflected or contemplated in such forward-looking statements. Clients should carefully consider the investment objectives, risks, charges, and expenses of a fund before investing.
Unless otherwise stated herein, neither performance nor related information, nor any investment terms presented herein have been adjusted to reflect the impact of the additional fees paid to a placement agent by an investor (for Morgan Stanley Wealth Management placement clients, a one-time upfront Placement Fee of up to 3% on committed capital, and for Morgan Stanley Wealth Management investment advisory clients, an annual advisory fee of up to 2%, generally on amount invested) which, if such fees were incorporated, would result in a substantial reduction in any returns presented herein and may impact any information related to investment terms presented herein, as applicable. In addition to such fees, clients will pay the fees and expenses of any funds in which their account is invested. These fees and expenses are an additional cost and will not be included in the fee amount in the account statements.
For most investment advisory clients, the program account will be charged an asset-based advisory fee every month (the “Advisory Fee”). In general, the Advisory Fee covers investment advisory services and reporting. In addition to the Advisory Fee, clients will pay the fees and expenses of any funds in which their account is invested. These fees and expenses are an additional cost and will not be included in the Advisory Fee amount in their account statements. Additionally, unless stated otherwise herein, neither performance nor related information, nor any investment terms presented herein have been adjusted to reflect the impact of the Advisory Fee which, if incorporated, would result in a substantial reduction in any returns presented herein and may impact any information related to investment terms presented herein, as applicable.
As Advisory Fees are deducted monthly, the compounding effect will increase the impact of the Advisory Fees by an amount directly related to the gross account performance. For example, for an account with an initial value of $100,000 and a 2.0% annual Advisory Fee, if the gross performance is 5% per year over a three-year period, the compounding effect of the Advisory Fee will result in a net annual compound rate of return of approximately 2.40% per year over a three-year period, and the total value of the client’s portfolio at the end of the three-year period would be approximately $115,762.50 without the Advisory Fee and $107,389.50 with the Advisory Fee.
Please see the applicable Morgan Stanley Smith Barney LLC Form ADV Part 2A for more information, including a description of the Advisory Fee schedule. It is available at www.morganstanley.com/ADV or from your Financial Advisor/Private Wealth Advisor.
Certain assumptions have been made regarding the historical performance information included herein, and such performance information is presented by way of example only. Statements in this material are made as of the dates specified herein. No representation or warranty (express or implied) is made or can be given with respect to the accuracy or completeness of the information in this material. No representation is made that the performance presented will be achieved as a result of implementing investments substantially identical or similar to those described herein or that every assumption made in achieving, calculating, or presenting the historical performance information has been considered or stated. Any changes to assumptions could have a material impact on the investment returns that are presented by way of example. Returns for any period may be attributable to certain market conditions, fund size, and timing of transaction, which may not be repeated.
Past performance is no guarantee of future results. Actual results may vary. Diversification does not assure a profit or protect against loss in a declining market.
Alternative investments involve complex tax structures, tax inefficient investing, and delays in distributing important tax information. Individual funds have specific risks related to their investment programs that will vary from fund to fund. Clients should consult their own tax and legal advisors as Morgan Stanley Wealth Management does not provide tax or legal advice.
A majority of Alternative Investment managers reviewed and selected by GIMA pay or cause to be paid an ongoing fee for distribution from their management fees to Morgan Stanley Wealth Management in connection with Morgan Stanley Wealth Management clients that purchase an interest in an Alternative Investment and in some instances pay these fees on the investments held by advisory clients. Morgan Stanley Wealth Management rebates such fees that are received and attributable to an investment held by an advisory client and retains the fees paid in connection with investments held by brokerage clients. Interests in alternative investment products are only made available pursuant to the terms of the applicable prospectus, are distributed by Morgan Stanley Wealth Management and certain of its affiliates, and (1) are not FDIC-insured, (2) are not deposits or other obligations of Morgan Stanley Wealth Management or any of its affiliates, (3) are not guaranteed by Morgan Stanley Wealth Management or any of its affiliates, and (4) involve investment risks, including possible loss of principal. Morgan Stanley Wealth Management is a registered broker-dealer, not a bank.
© 2026 Morgan Stanley Smith Barney LLC. Member SIPC. Alternative investment securities discussed herein are not covered by the protections provided by the Securities Investor Protection Corporation, unless such securities are registered under the Securities Act of 1933, as amended, and are held in a Morgan Stanley Wealth Management Individual Retirement Account.
Below is a summary of some of the risk factors related to an investment in the Funds. Please refer to the Fund’s prospectus for a more complete description of risk factors applicable to the Fund and for the full list of defined terms.
Risks Related to Interests in the Portfolio Funds
The Fund’s performance depends upon the performance of the Portfolio Fund Managers and selected styles, the adherence by Portfolio Fund Managers to such selected styles, the instruments used by such Portfolio Fund Managers and the Sub-Adviser’s ability to effectively allocate Fund assets among the Portfolio Fund Managers.
Currently, the Fund’s universe of investable strategies is limited to those Portfolio Funds on the MS Platform, and under normal circumstances, the Fund will only invest in Portfolio Funds whose Portfolio Fund Managers have agreed to use their own resources to make payments to the Distributor in respect of the Fund’s investment in the Portfolio Fund. This limits the availability of the investable strategies of the Fund, which could cause the Fund to have lower returns than if it had a larger universe of investable strategies.
The Fund’s investment portfolio will consist of interests in the Portfolio Funds which hold securities issued mainly by privately held companies, and operating results for a specified period will be difficult to predict. Such investments involve a high degree of business and financial risk that can result in substantial losses.
A Portfolio Fund’s underlying investments, depending on its style, may be in operating companies whose capital structures are highly leveraged. Such investments involve a high degree of risk in that adverse fluctuations in the cash flow of such operating companies, or increased interest rates, may impair the ability to meet their obligations, which may accelerate and magnify declines in the value of any such investments in a down market.
Shareholders will effectively bear two layers of expenses: expenses of the Fund and indirect expenses of the Fund’s interests in the Portfolio Funds. Using leverage at the Portfolio Fund level will generally increase indirect expenses of the Fund.
Shareholders will have no right to receive information about the interests in private Portfolio Funds and will have no recourse against interests in such Portfolio Funds.
Investments in private funds typically provide greater flexibility than traditional investment funds registered under the Investment Company Act of 1940 with respect to the types of securities that may be owned, the types of trading strategies employed, including with respect to transactions with affiliates, and, in some cases, the amount of leverage that can be used. Accordingly, securities of private funds tend to be more illiquid and highly speculative. Private funds have complex fee structures, including performance fees, that are broader than what is permitted for registered funds, and investors pay these fees indirectly by investing in the Fund Underlying private funds may receive performance fees even if other of the private funds that the Fund invests in or overall performance of the Fund is negative. Furthermore, the Fund may have challenges in monitoring operations and performance of private funds due to the inability to access information about private fund investments and valuations.
The Portfolio Funds may invest in securities and derivatives that often do not have a liquid market. It may be difficult to value certain Portfolio Fund positions. In addition, Portfolio Funds may impose lock-up periods, withdrawal fees, redemption gates or other measures that impact liquidity.
The liquidity of ETFs depends on the adequacy of the secondary market. ETF shares can trade at either a discount or premium to the ETF’s net asset value per share. If an ETF held by the Fund or a Portfolio Fund trades at a discount to net asset value, the Fund or Portfolio Fund could lose money even if the securities in which the ETF invests go up in value. There can be no assurances that an ETF’s investment objectives will be achieved, and ETFs based on an index may not replicate and maintain exactly the composition and relative weightings of securities in the index.
Investments in BDCs may be subject to a high degree of risk. BDCs typically invest in small and medium-sized private and certain public companies that may not have access to public equity or debt markets for capital raising. As a result, a BDC’s portfolio typically will include a substantial amount of securities purchased in private placements, and its portfolio may carry risks similar to those of a private equity or venture capital fund.
REITs may be affected by changes in the real estate markets generally as well as changes in the values of the properties owned by the REIT or securing the mortgages owned by the REIT. REITs are dependent upon management skill and are not diversified. REITs are also subject to heavy cash flow dependency, defaults by borrowers, self-liquidation, and the possibility of failing to qualify for favorable tax treatment under the Internal Revenue Code of 1986, as amended (the “Code”), and to maintain an exemption under the Investment Company Act of 1940 (the “1940 Act”). Finally, certain REITs may be self-liquidating at the end of a specified term, and run the risk of liquidating at an economically inopportune time.
It is expected that when a Portfolio Fund makes a senior secured term loan investment in an issuer, it will generally take a security interest in substantially all of the available assets of the issuer, including the equity interests of its domestic subsidiaries. However, there is a risk that the collateral securing the loans may decrease in value over time, may be difficult to sell in a timely manner, may be difficult to appraise and may fluctuate in value based upon the success of the business and market conditions, including as a result of the inability of the issuer to raise additional capital, and, in some circumstances, the Portfolio Fund’s lien could be subordinated to claims of other creditors.
Portfolio Funds may invest in second and third lien loans, which are subject to the same investment risks generally applicable to senior loans described above. A Portfolio Fund’s second lien senior secured loans will be subordinated to first lien loans. As such, to the extent a Portfolio Fund holds second lien senior secured loans and junior debt investments, holders of first lien loans may be repaid before the Portfolio Fund in the event of a bankruptcy or other insolvency proceeding. Therefore, second and third lien loans are subject to additional risk that the cash flow of the related obligor and the property securing the second or third lien loan may be insufficient to repay the scheduled payments to the lender after giving effect to any senior secured obligations of the related obligor. This may result in an above average amount of risk and loss of principal.
Unsecured loans are subject to the same investment risks generally applicable to loans described above but are subject to additional risk that the assets and cash flow of the related obligor may be insufficient to repay the scheduled payments to the lender after giving effect to any secured obligations of the obligor. Unsecured loans will be subject to certain additional risks to the extent that such loans may not be protected and such loans are not secured by collateral, financial covenants or limitations upon additional indebtedness.
Unitranche loans provide leverage levels comparable to a combination of first lien and second lien or subordinated loans. From the perspective of a lender, in addition to making a single loan, a unitranche loan may allow the lender to choose to participate in the “first out” tranche, which will generally receive priority with respect to payments of principal, interest and any other amounts due, or to choose to participate only in the “last out” tranche, which is generally paid after the “first out” tranche is paid. A Portfolio Fund may participate in “first out” and “last out” tranches of unitranche loans and make single unitranche loans.
To the extent that the Fund does not receive timely valuation information from the Portfolio Fund Managers of Portfolio Funds for which no secondary market exists (the “Non-Traded Portfolio Fund Managers” of the “Non-Traded Portfolio Funds”), the Fund’s ability to accurately calculate its net asset value will likely be impaired. The Non-Traded Portfolio Fund Managers generally provide valuations on a quarterly basis, whereas the Fund provides valuations, and issues Shares, on a monthly basis. The Fund’s interests in the Non-Traded Portfolio Funds, and many of the underlying investments held by the Non-Traded Portfolio Funds, will be priced by the Non-Traded Portfolio Fund Manager in the absence of a readily available market and may be priced based on determinations of fair value, which may prove to be inaccurate. The Fund and the Adviser may use independent pricing services to assist in calculating the value of the Fund’s securities, including illiquid investments. The factors and methodologies used for the valuation of such securities are not necessarily an indication of the risks associated with investing in those securities nor can it be assured that the Fund can realize the fair value assigned to a security if it were to sell the security. A Portfolio Fund’s valuation information could also be inaccurate due to fraudulent activity, misvaluation or inadvertent error. The Fund may not uncover errors in valuation for a significant period of time, if ever.
The Fund may not be able to vote on matters that require the approval of a Portfolio Fund’s investors, including matters that could adversely affect the Fund.
The Fund may receive an in-kind distribution of securities from a Portfolio Fund that are illiquid or difficult to value and difficult to dispose of.
The Fund will allocate to interests in the Portfolio Funds, which may result in indirect expenses, such as asset-based fees and incentive fees, that may be higher than those of other types of securities.
Interests in Portfolio Funds located outside of the U.S. may be subject to withholding taxes in such jurisdictions, which may reduce the returns of the Fund.
Many Portfolio Funds, in which the Fund may invest, will not be registered as investment companies under the 1940 Act, and therefore the Fund, and indirectly, the Fund’s Shareholders may not avail themselves of 1940 Act protections with respect to such interests in such Portfolio Funds.
Concentration in a single industry by Portfolio Funds may involve risks greater than those generally associated with diversified Portfolio Funds, including significant fluctuations in returns.
The Fund may invest in Portfolio Funds that invest in securities of non-U.S. issuers, including those in emerging markets, and the Fund’s assets may be allocated to interests in the Portfolio Funds denominated in non-U.S. currencies, thereby exposing the Fund to various risks that may not be applicable to U.S. securities. The Fund generally considers emerging market countries to be countries included in the MSCI Emerging Markets Index and MSCI Emerging Markets Investable Market Index (IMI).
To the extent permitted by applicable law, certain portfolio companies may operate in, or have dealings with, countries subject to sanctions or embargos imposed by the U.S. government, foreign governments, or the United Nations or other international organizations.
A Portfolio Fund Manager may focus on a particular industry or sector (e.g., technology, healthcare, consumer products, industrials, financial services, utilities), which may subject the Portfolio Fund, and thus the Fund, to greater risk and volatility than if the focus was on a broader range of industries.
A Portfolio Fund Manager may focus on a particular country or geographic region, which may subject the Portfolio Fund, and thus the Fund, to greater risk and volatility than if the focus was on a broader range of countries or geographic regions.
A Portfolio Fund Manager may focus on a limited number of securities or operating companies, which may subject the Portfolio Fund, and thus the Fund, to greater risk and volatility than if the focus was on a larger number of securities or operating companies.
Subject to the discretion of the Fund’s Board of Trustees, the Fund intends to commence a share repurchase program beginning no later than the first full calendar quarter after the date that is six months following its commencement of investment operations. The Fund should therefore be considered to offer limited liquidity. Although iCapital Fund Advisors LLC, the Fund’s investment adviser (the “Adviser”) will recommend to the Board of Trustees (subject to the Board of Trustees’ discretion) that the Fund offer to repurchase Shares from Shareholders on a quarterly basis in an amount not to exceed 3% of the Fund’s net asset value, there is no guarantee that an investor will be able to sell all of the Shares that the investor desires to sell.
If, in connection with the Fund’s share repurchase program, a repurchase offer is oversubscribed by Shareholders who tender Shares, the Fund will repurchase a pro rata portion by value of the Shares tendered by each Shareholder, extend the repurchase offer, or take any other action with respect to the repurchase offer permitted by applicable law.
The Fund’s distributions are not guaranteed and may be funded from offering proceeds or borrowings, which may constitute a return of capital and reduce the amount of capital available to the Fund for investment. Any capital returned to Shareholders through distributions will be distributed after payment of fees and expenses.
The Fund intends to qualify as a regulated investment company (“RIC”) under the Code in each tax year but may be subject to substantial tax liabilities if it fails to so qualify in any tax year.
There is no market exchange available for Shares of the Fund thereby making them illiquid and difficult to dispose of.
The Fund and its interests in the Portfolio Funds are subject to risks associated with legal and regulatory changes applicable to the private equity, private credit and real assets industries.
The Fund is registered as an investment company under the 1940 Act, which limits its investment flexibility compared to a fund that is not so registered.
The Fund is non-diversified, which means it is permitted to invest a greater portion of its assets in a smaller number of issuers than a “diversified” fund. For this reason, the Fund may be more exposed to the risks associated with and developments affecting an individual issuer than a fund that invests more widely. The Fund may also be subject to greater market fluctuation and price volatility than a more broadly diversified fund.
Shares are not traded on any national securities exchange or other market. No market currently exists for the Shares, and the Fund contemplates that one will not develop. The Shares are, therefore, not readily marketable.
The Fund is designed primarily for long-term investors and is not intended to be a trading vehicle. An investor should not invest in the Fund if the investor needs a liquid investment. Closed-end funds differ from open-end management investment companies (commonly known as mutual funds) in that investors in a closed-end fund do not have the right to redeem their shares on a daily basis at a price based on net asset value.
The interests in the Portfolio Funds may be subject to inflation risk, which is the risk that the real value of assets or income from investments will be less in the future as inflation decreases the purchasing power and value of money.
