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Correspondence 0001104659-24-081941 from Fundrise Growth Tech Fund, LLC (CIK 0001867090)

Fundrise Growth Tech Fund, LLC (CIK 0001867090)
Date: July 23, 2024 · CIK: 0001867090 · Accession: 0001104659-24-081941

AI Filing Summary & Sentiment

File numbers found in text: 333-256157, 811-23708

Date
July 23, 2024
Author
Not clearly detected
Form
CORRESP
Company
Fundrise Growth Tech Fund, LLC (CIK 0001867090)

Letter

VIA EDGAR Securities and Exchange Commission Division of Investment Management 100 F Street, NE Washington, D.C. 20549 Attention: Ashley Vroman-Lee Re: Fundrise Growth Tech Fund, LLC (File Nos. 811-23708; 333-256157)

Dear Ms. Vroman-Lee:

On behalf of the Fundrise Growth Tech Fund (the “Fund”), we are writing to respond to comments of the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) that you provided via telephone call on July 17, 2024, in connection with Post-Effective Amendment No. 4 under the Securities Act of 1933 (the “1933 Act”) and Amendment No. 4 under the Investment Company Act of 1940 (the “1940 Act”) to the Fund’s Registration Statement on Form N-2 relating to the common shares of beneficial interest of the Fund, which was filed with the Commission on May 30, 2024.

For the convenience of the Staff, the Staff’s comments have been summarized below and the Fund’s response follows each comment. References in the responses to the Fund’s prospectus or statement of additional information are to those to be filed on Form N-2 (the “Registration Statement”) on or before July 29, 2024. Capitalized terms not defined herein have the meaning given to them in the Registration Statement.

1. Staff Comment: The Staff notes the Fund’s disclosure that it intends to elect to be taxed as a regulated investment company (“RIC”) under the Internal Revenue Code, as amended (“IRC”), but is currently taxed as a C corporation. Please supplementally explain if the Fund ever met the requirements to elect RIC status and subsequently lost its RIC status or if the Fund never met the requirements to elect RIC status.

Response: The Fund confirms that it has yet to meet the requirements to elect RIC status, and thus has never gained and lost RIC status. We note additionally that the following disclosure, which is included in the Prospectus Summary and the “Description of Capital Structure and Shares” section of the prospectus as well as the “U.S. Federal Income Tax Considerations” section of the Statement of Additional Information (“SAI”) indicates that the Fund is not currently a RIC and is currently taxed as a C corporation:

2 July 23, 2024

“The Fund intends to elect to be taxed as a RIC for U.S. federal income tax purposes following such time as the Fund determines that it meets the requirements to qualify as a RIC. Until such time, the Fund expects to be taxed as a C corporation.”

2. Staff Comment: The Staff notes that in the paragraph captioned “Investment Objective,” the statement that there “can be no assurance that the Fund will meet its investment objective” is repeated. Please delete the repeated sentence.

Response: The Fund has made the requested change.

3. Staff Comment: In the section captioned “Investment Strategies,” the Staff notes that the Fund states that it will invest in “U.S. domestic Portfolio Companies, but it is not prohibited from investing in foreign Portfolio Companies.” If it is possible that the Fund will invest in emerging markets Portfolio Companies as part of its principal investment strategy, please disclose that in the description of the Fund’s principal strategies and risks.

Response: The Fund does not currently invest in emerging markets Portfolio Companies and does not anticipate investing in emerging markets Portfolio Companies as part of its principal investment strategies. While the Fund therefore does not believe it is appropriate to add disclosure regarding investments in emerging markets Portfolio Companies to its principal investment strategies and risks, the Fund notes that the SAI includes disclosure regarding the risks of investments in emerging markets securities under the “Emerging Markets Securities” header in the “Investment Objective and Policies” section of the SAI.

4. Staff Comment: The Fund discloses that it may engage in active and frequent trading in its prospectus. In the SAI, it states that the Fund’s portfolio turnover rate is not expected to exceed 100%. Please confirm the disclosure is correct.

Response: The Fund has removed the statement that it may engage in active and frequent trading and, in accordance with Item 4 of Form N-2, its portfolio turnover rate for the fiscal year ended March 31, 2024 (18%) is included in the Financial Highlights section of the prospectus. Additionally, the Fund has updated the “Portfolio Turnover” subsection to the “Portfolio Transactions and Brokerage” section of the SAI to read as follows (additions underlined; deletions in strikethrough):

Although the Fund does not have any restrictions on portfolio turnover, it is not the Fund’s policy to engage in transactions with the objective of seeking profits from short-term trading. It is expected that the annual portfolio turnover rate of the Fund will not exceed 100%. The historical portfolio turnover rate for the Fund is shown under the heading “Financial Highlights” in the Prospectus. The portfolio turnover rate is calculated by dividing the lesser of sales or purchases of portfolio securities or other assets by the average monthly value of the Fund’s portfolio securities. For purposes of this calculation, portfolio securities or other assets exclude all securities or other assets having a maturity when purchased of one year or less. A high rate of portfolio turnover involves correspondingly greater transaction costs than are borne by the Fund and its Shareholders. Changes in portfolio turnover rates were generally the result of active trading strategies employed by the Fund’s portfolio managers in response to market conditions, and are not reflective of a material change in investment strategy. For the period April 1, 2023 through March 31, 2024, the Fund’s portfolio turnover was 18%.

3 July 23, 2024

5. Staff Comment: Consider updating the Fund’s principal investment strategies to disclose a strategy of making investments in companies with complex capital structures in light of the Fund’s principal risk captioned “Risk of Complex Capital Structures.”

Response: Because the Fund does not invest in companies with complex capital structures as an investment strategy, but rather the complex capital structures are often a feature of the companies in which the Fund invests or intends to invest, the Fund respectfully declines to make changes in response to this comment. The Fund continues to believe, however, that the “Risk of Complex Capital Structures” is a principal risk of the Fund’s investment program due to the prevalence of technology companies with complex capital structures.

6. Staff Comment: Please make appropriate modifications to the Fund’s risk captioned “Delay in Use of Proceeds Risk” in light of item 7 of Form N-2 and Guide 1 thereto, which requires a registrant to disclose how long it is expected to take to fully invest net proceeds in accordance with the fund’s objectives and policies and to state any reasons for a delay if the registrant expects the applicable investment period to exceed three months.

Response: In response to your comment, the Fund has deleted the “Delay in Use of Proceeds Risk” from the “Principal Risks” section of the Prospectus Summary as well as the “Risk Factors” section of the prospectus. In addition, the following changes have been made to the “Use of Proceeds” section of the prospectus (additions underlined; deletions in strikethrough):

“The Fund currently intends to fully invest all or substantially all of the net proceeds of its continuous offering as soon as practicable, and typically within one to three months, in accordance with its investment objective and policies, subject to the availability of investments consistent with the Fund’s investment objective and policies, and except to the extent proceeds are held in cash to pay dividends or expenses, satisfy repurchase offers or for temporary defensive purposes. Pending investment of the net proceeds, the Fund may invest in short-term, highly liquid or other authorized investments.”

4 July 23, 2024

7. Staff Comment: The Fund discloses that it is subject to “Corporate Debt Securities Risk” and “Convertible Securities and Synthetic Convertible Securities Risk.” If these are principal risks of the Fund, please update the Fund’s strategy to disclose that it makes investments in these securities.

Response: The Fund notes that the “Principal Investment Strategies” section of the Prospectus Summary and the “Principal Investment Strategies” sub-section of the Investment Objective, Strategies, and Policies section of the prospectus indicate that the Fund may invest in corporate debt and convertible securities. See, e.g., “[t]he Fund seeks to achieve its investment objective by investing in private and public technology companies directly or indirectly, with a primary focus on the equity securities (e.g., common stock, preferred stock or convertible debt) of certain Portfolio Companies”; “securities of technology companies include equity and debt securities of private and public companies operating in the information technology and telecommunication services sectors”; “[t]he Fund may invest up to 20% of its net assets (plus the amount of any borrowings for investment purposes) in the equity or debt securities of companies that are not technology companies.”

As a result, the Fund respectfully declines to add disclosure in response to the comment.

8. Staff Comment: In light of the statement that the Fund will engage in frequent trading, consider adding portfolio turnover risk.

Response: The Fund refers the Staff to its response to Staff Comment #4 above.

9. Staff Comment: In the section captioned “Procedures for Repurchases,” the disclosure states that the amount due to any shareholder whose shares are repurchased will be equal to the value of the shares being repurchased, based on the Fund’s net asset valuation per share as of the valuation date. Please delete or revise this disclosure in light of the requirement in the tender offer rules that the specified amount of cash per share to be paid, the total number of shares to be purchased, and the total amount of funds required to purchase the maximum amount of shares being bought must all be stated at the commencement of an offer. See item 4 of Rule 17 CFR § 240.14d-100 of the Securities Exchange Act of 1934 (the “Exchange Act”), under Schedule TO incorporating 17 CFR § 229.1004(a)(1)(i)-(ii) and item 7 of Rule 17 CFR § 240.14d-100 of the Exchange Act under Schedule TO incorporating 17 CFR § 229.1007(a).

Response: As requested by the Staff, the Fund has deleted the noted disclosure. While the Fund has removed this language from its prospectus, the Fund notes, however, that there are compelling policy reasons why the processes that have been followed by closed-end funds making tender offers for their shares over the past two decades continue to be necessary for the operation of these funds and beneficial for the funds and their shareholders, whether those shareholders have chosen to participate in the tender offer or remain in the fund. In addition, we note that Rule 102(b)(2)(ii) of Regulation M specifically contemplates that closed-end funds that conduct periodic tender offers do so “at net asset value” – which would not be possible if a closed-end fund were to be required to state the amount of cash per share to be paid. Specifically, Rule 102(b)(2)(ii) excepts closed-end funds from the prohibition in Rule 102(a) that would otherwise apply to a tender offer occurring during the distribution of a closed-end fund’s securities, provided that the tender offer is “at net asset value.”

5 July 23, 2024

10. Staff Comment: Please include the Fund’s completed fee table in the correspondence filing made in response to the Staff’s comments.

Response: The fee table to be included in the Registration Statement and associated footnotes are as follows:

SHAREHOLDER TRANSACTION EXPENSES

Maximum Sales Load (As a Percentage of Offering Price) None

Dividend Reinvestments and Cash Purchase Plan Fees None

ANNUAL FUND OPERATING EXPENSES (as a percentage of the Fund's net assets attributable to the Shares)

Management Fee 1.85 %

Other Expenses1

Other Expenses – General 1.43 %

Other Expenses – Marketing 0.16 %

Total Other Expenses 1.59 %

Interest on Borrowed Funds2 None

Deferred Income Tax Expense3 0.44 %

Acquired Fund Fees and Expenses4 0.07 %

Total Annual Fund Operating Expenses 3.95 %

Less Fee Waiver and Expense Reimbursement5 (0.44 %)

Total Annual Fund Net Operating Expenses6 3.51 %

1 Other Expenses have been restated to reflect estimated amounts based on expenses incurred for the Fund’s current fiscal year and include professional fees, marketing expenses and other general and administrative expenses.

2 The table assumes the Fund’s use of leverage in an amount equal to 0% of the Fund’s total assets (less all liabilities and indebtedness not represented by 1940 Act leverage). The Fund’s actual interest costs associated with leverage may differ from the estimates above.

3 Deferred income tax expense/(benefit) represents an estimate of the Fund’s potential tax expense/(benefit) if it were to recognize the unrealized gains/(losses) in the portfolio. An estimate of deferred income tax expense/ (benefit) is dependent upon the Fund’s net investment income/(loss) and realized and unrealized gains/(losses) on investments and such expenses may vary greatly from year to year depending on the nature of the Fund’s i

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CORRESP
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filename1.htm

 ROPES & GRAY LLP

PRUDENTIAL TOWER

800 BOYLSTON STREET

BOSTON, MA 02199-3600

WWW.ROPESGRAY.COM

July 23, 2024 Elizabeth J. Reza

  T +1 617 951 7919

  elizabeth.reza@ropesgray.com

VIA EDGAR

Securities and Exchange Commission

Division of Investment Management

100 F Street, NE

Washington, D.C. 20549

Attention: Ashley Vroman-Lee

Re:          Fundrise
Growth Tech Fund, LLC (File Nos. 811-23708; 333-256157)

Dear Ms. Vroman-Lee:

On behalf of the Fundrise Growth Tech Fund (the
 “Fund”), we are writing to respond to comments of the staff (the “Staff”) of the Securities and Exchange Commission
(the “Commission”) that you provided via telephone call on July 17, 2024, in connection with Post-Effective Amendment
No. 4 under the Securities Act of 1933 (the “1933 Act”) and Amendment No. 4 under the Investment Company Act of
1940 (the “1940 Act”) to the Fund’s Registration Statement on Form N-2 relating to the common shares of beneficial
interest of the Fund, which was filed with the Commission on May 30, 2024.

For the convenience of the Staff, the Staff’s
comments have been summarized below and the Fund’s response follows each comment. References in the responses to the Fund’s
prospectus or statement of additional information are to those to be filed on Form N-2 (the “Registration Statement”)
on or before July 29, 2024. Capitalized terms not defined herein have the meaning given to them in the Registration Statement.

 1. Staff Comment: The Staff notes the Fund’s
                                            disclosure that it intends to elect to be taxed as a regulated investment company (“RIC”)
                                            under the Internal Revenue Code, as amended (“IRC”), but is currently taxed as
                                            a C corporation. Please supplementally explain if the Fund ever met the requirements to elect
                                            RIC status and subsequently lost its RIC status or if the Fund never met the requirements
                                            to elect RIC status.

Response:
The Fund confirms that it has yet to meet the requirements to elect RIC status, and thus has never gained and lost RIC status. We note
additionally that the following disclosure, which is included in the Prospectus Summary and the “Description of Capital Structure
and Shares” section of the prospectus as well as the “U.S. Federal Income Tax Considerations” section of the Statement
of Additional Information (“SAI”) indicates that the Fund is not currently a RIC and is currently taxed as a C corporation:

 2 July 23, 2024

“The Fund intends to elect to be
taxed as a RIC for U.S. federal income tax purposes following such time as the Fund determines that it meets the requirements to qualify
as a RIC. Until such time, the Fund expects to be taxed as a C corporation.”

 2. Staff Comment: The Staff notes that
                                            in the paragraph captioned “Investment Objective,” the statement that there “can
                                            be no assurance that the Fund will meet its investment objective” is repeated. Please
                                            delete the repeated sentence.

Response:
The Fund has made the requested change.

 3. Staff Comment: In the section captioned
                                            “Investment Strategies,” the Staff notes that the Fund states that it will invest
                                            in “U.S. domestic Portfolio Companies, but it is not prohibited from investing in foreign
                                            Portfolio Companies.” If it is possible that the Fund will invest in emerging markets
                                            Portfolio Companies as part of its principal investment strategy, please disclose that in
                                            the description of the Fund’s principal strategies and risks.

Response:
The Fund does not currently invest in emerging markets Portfolio Companies and does not anticipate investing in emerging markets Portfolio
Companies as part of its principal investment strategies. While the Fund therefore does not believe it is appropriate to add disclosure
regarding investments in emerging markets Portfolio Companies to its principal investment strategies and risks, the Fund notes that the
SAI includes disclosure regarding the risks of investments in emerging markets securities under the “Emerging Markets Securities”
header in the “Investment Objective and Policies” section of the SAI.

 4. Staff Comment: The Fund discloses that
                                            it may engage in active and frequent trading in its prospectus. In the SAI, it states that
                                            the Fund’s portfolio turnover rate is not expected to exceed 100%. Please confirm the
                                            disclosure is correct.

Response:
The Fund has removed the statement that it may engage in active and frequent trading and, in accordance with Item 4 of Form N-2,
its portfolio turnover rate for the fiscal year ended March 31, 2024 (18%) is included in the Financial Highlights section of the
prospectus. Additionally, the Fund has updated the “Portfolio Turnover” subsection to the “Portfolio Transactions and
Brokerage” section of the SAI to read as follows (additions underlined; deletions in strikethrough):

Although
the Fund does not have any restrictions on portfolio turnover, it is not the Fund’s policy to engage in transactions with the
objective of seeking profits from short-term trading. It is expected that the annual portfolio turnover rate of the Fund will not
exceed 100%. The historical portfolio turnover rate for the Fund is
shown under the heading “Financial Highlights” in the Prospectus. The portfolio turnover rate is calculated by
dividing the lesser of sales or purchases of portfolio securities or other assets by the average monthly value of the Fund’s
portfolio securities. For purposes of this calculation, portfolio securities or other assets exclude all securities or other assets
having a maturity when purchased of one year or less. A high rate of portfolio turnover involves correspondingly greater transaction
costs than are borne by the Fund and its Shareholders. Changes in portfolio turnover rates were generally the result of active
trading strategies employed by the Fund’s portfolio managers in response to market conditions, and are not reflective of a
material change in investment strategy.  For the period
April 1, 2023 through March 31, 2024, the Fund’s portfolio turnover was 18%.

 3 July 23, 2024

 5. Staff Comment: Consider updating the
                                            Fund’s principal investment strategies to disclose a strategy of making investments
                                            in companies with complex capital structures in light of the Fund’s principal risk
                                            captioned “Risk of Complex Capital Structures.”

Response:
Because the Fund does not invest in companies with complex capital structures as an investment strategy, but rather the complex capital
structures are often a feature of the companies in which the Fund invests or intends to invest, the Fund respectfully declines to make
changes in response to this comment. The Fund continues to believe, however, that the “Risk of Complex Capital Structures”
is a principal risk of the Fund’s investment program due to the prevalence of technology companies with complex capital structures.

 6. Staff Comment: Please make appropriate
                                            modifications to the Fund’s risk captioned “Delay in Use of Proceeds Risk”
                                            in light of item 7 of Form N-2 and Guide 1 thereto, which requires a registrant to disclose
                                            how long it is expected to take to fully invest net proceeds in accordance with the fund’s
                                            objectives and policies and to state any reasons for a delay if the registrant expects the
                                            applicable investment period to exceed three months.

Response:
In response to your comment, the Fund has deleted the “Delay in Use of Proceeds Risk” from the “Principal Risks”
section of the Prospectus Summary as well as the “Risk Factors” section of the prospectus. In addition, the following changes
have been made to the “Use of Proceeds” section of the prospectus (additions underlined; deletions in strikethrough):

“The Fund currently intends to
fully invest all or substantially all of the net proceeds of its continuous offering as soon as practicable, and typically within
one to three months, in accordance with its investment objective and policies, subject to the availability of investments consistent
with the Fund’s investment objective and policies, and except to the extent proceeds are held in cash to pay dividends or expenses,
satisfy repurchase offers or for temporary defensive purposes. Pending investment of the net proceeds, the Fund may invest in short-term,
highly liquid or other authorized investments.”

 4 July 23, 2024

 7. Staff Comment: The Fund discloses that
                                            it is subject to “Corporate Debt Securities Risk” and “Convertible Securities
                                            and Synthetic Convertible Securities Risk.” If these are principal risks of the Fund,
                                            please update the Fund’s strategy to disclose that it makes investments in these securities.

Response:
The Fund notes that the “Principal Investment Strategies” section of the Prospectus Summary and the “Principal Investment
Strategies” sub-section of the Investment Objective, Strategies, and Policies section of the prospectus indicate that the Fund
may invest in corporate debt and convertible securities. See, e.g., “[t]he Fund seeks to achieve its investment objective by investing
in private and public technology companies directly or indirectly, with a primary focus on the equity securities (e.g., common stock,
preferred stock or convertible debt) of certain Portfolio Companies”; “securities of technology companies include equity
and debt securities of private and public companies operating in the information technology and telecommunication services sectors”;
 “[t]he Fund may invest up to 20% of its net assets (plus the amount of any borrowings for investment purposes) in the equity or
debt securities of companies that are not technology companies.”

As a result, the Fund respectfully
declines to add disclosure in response to the comment.

 8. Staff Comment: In light of the statement
                                            that the Fund will engage in frequent trading, consider adding portfolio turnover risk.

Response:
The Fund refers the Staff to its response to Staff Comment #4 above.

 9. Staff Comment: In the section captioned
                                            “Procedures for Repurchases,” the disclosure states that the amount due to any
                                            shareholder whose shares are repurchased will be equal to the value of the shares being repurchased,
                                            based on the Fund’s net asset valuation per share as of the valuation date. Please
                                            delete or revise this disclosure in light of the requirement in the tender offer rules that
                                            the specified amount of cash per share to be paid, the total number of shares to be purchased,
                                            and the total amount of funds required to purchase the maximum amount of shares being bought
                                            must all be stated at the commencement of an offer. See item 4 of Rule 17 CFR
                                            § 240.14d-100 of the Securities Exchange Act of 1934 (the “Exchange Act”),
                                            under Schedule TO incorporating 17 CFR § 229.1004(a)(1)(i)-(ii) and item 7 of Rule 17
                                            CFR § 240.14d-100 of the Exchange Act under Schedule TO incorporating 17 CFR §
                                            229.1007(a).

Response:
As requested by the Staff, the Fund has deleted the noted disclosure.  While the Fund has removed this language from its prospectus,
the Fund notes, however, that there are compelling policy reasons why the processes that have been followed by closed-end funds making
tender offers for their shares over the past two decades continue to be necessary for the operation of these funds and beneficial for
the funds and their shareholders, whether those shareholders have chosen to participate in the tender offer or remain in the fund.
In addition, we note that Rule 102(b)(2)(ii) of Regulation M specifically contemplates that closed-end funds that conduct periodic
tender offers do so “at net asset value” – which would not be possible if a closed-end fund were to be required to
state the amount of cash per share to be paid.   Specifically, Rule 102(b)(2)(ii) excepts closed-end funds from the
prohibition in Rule 102(a) that would otherwise apply to a tender offer occurring during the distribution of a closed-end fund’s
securities, provided that the tender offer is “at net asset value.”

 5 July 23, 2024

 10. Staff Comment: Please include the Fund’s
                                            completed fee table in the correspondence filing made in response to the Staff’s comments.

Response:
The fee table to be included in the Registration Statement and associated footnotes are as follows:

    SHAREHOLDER TRANSACTION EXPENSES

    Maximum Sales Load (As a Percentage of Offering Price)
    None

    Dividend Reinvestments and Cash Purchase Plan Fees
    None

    ANNUAL FUND OPERATING EXPENSES (as a percentage of the Fund's net assets attributable to the Shares)

    Management Fee
      1.85 %

    Other Expenses1

    Other Expenses – General
      1.43 %

    Other Expenses – Marketing
      0.16 %

    Total Other Expenses
      1.59 %

    Interest on Borrowed Funds2
      None

    Deferred Income Tax Expense3
      0.44 %

    Acquired Fund Fees and Expenses4
      0.07 %

    Total Annual Fund Operating Expenses
      3.95 %

    Less Fee Waiver and Expense Reimbursement5
      (0.44 %)

    Total Annual Fund Net Operating Expenses6
      3.51 %

  1 Other Expenses have been restated to reflect estimated amounts based on expenses incurred for the Fund’s current fiscal
year and include professional fees, marketing expenses and other general and administrative expenses.

 2 The
                                            table assumes the Fund’s use of leverage in an amount equal to 0% of the Fund’s
                                            total assets (less all liabilities and indebtedness not represented by 1940 Act leverage).
                                            The Fund’s actual interest costs associated with leverage may differ from the estimates
                                            above.

 3 Deferred
                                            income tax expense/(benefit) represents an estimate of the Fund’s potential tax expense/(benefit)
                                            if it were to recognize the unrealized gains/(losses) in the portfolio. An estimate of deferred
                                            income tax expense/ (benefit) is dependent upon the Fund’s net investment income/(loss)
                                            and realized and unrealized gains/(losses) on investments and such expenses may vary greatly
                                            from year to year depending on the nature of the Fund’s i