Tokenized Single-Vehicle Feeder Fund (Reg D 506(c) Pattern)
On-chain feeder vehicle into off-chain master fund — single-class token, periodic NAV strike, no on-chain waterfall. ACRED-anchored, neutral within the feeder-pattern category.
Step 1 · Investor Onboarding (Reg D 506(c) Verification)Policy-Enforced
"An LP completing subscription documents for a private-credit fund — KYC, accreditation, suitability reviewed before the GP accepts the commitment. The tokenized feeder variant moves the master register on-chain but preserves the LP-onboarding gate intact."
The policy-enforced gate that establishes legal capacity to subscribe to the feeder vehicle. Verification follows the SEC's reasonable-steps standard under Reg D Rule 506(c)(2)(ii) — a principles-based requirement, not a checklist. Securitize's verification workflow re-evaluates accredited status annually and on material change, with the on-chain identity claim refreshed accordingly.
The ACRED-pattern feeder fund has a four-way role separation that the path makes explicit. The issuer of record is the feeder vehicle itself — Apollo Diversified Credit Securitize Fund, LLC for ACRED [VERIFY exact entity name on SEC Form D]. The SEC-registered investment adviser is an Apollo affiliate (Apollo Capital Credit Adviser, LLC pattern [VERIFY exact affiliate name]) operating under the Investment Advisers Act of 1940. The sponsoring asset manager is Apollo Asset Management / Apollo Global Management at the parent-organization level. The transfer agent — and operator of the on-chain transfer-restriction module — is Securitize. None of these four roles substitutes for the others.
Other tokenized single-vehicle feeder patterns follow analogous role separation: Hamilton Lane SCOPE-pattern feeders, KKR / Blue Owl / Ares feeder-vehicle variants where authored, and BlackRock USDXX as the money-market parallel of the same architectural pattern. The identity claim shape and the four-role separation generalize; the specific named entities differ per fund.
L4 ACCOUNT and L5 APPLICATION lit: identity, the custodian's internal controls, and the transfer agent's master register are policy-enforced bank-grade controls. Investment Advisers Act §204 (17 C.F.R. § 275.204-2) recordkeeping attaches to the adviser affiliate at the parallel adviser-side; for ERISA-eligible investor pathways (where the feeder is structured for plan-asset admission via a parallel-fund vehicle or QPAM-relief architecture), additional fiduciary-onboarding steps apply.
Step 2 · Subscription Commitment & NAV StrikeMixed EnforcementINGESTDETECTALERT
"Submitting a subscription order to a private-credit fund — capital committed today, but the share count is set at the next monthly NAV strike. The investor knows the dollar amount they're putting in, not the exact number of shares they'll receive."
The investor commits capital. The commitment is recorded on-chain via the Securitize subscription portal, and DS Protocol's transfer-restriction module fires for the first time on the investor's identity claim from Step 1 — the canonical first enforcement of the policy work done at onboarding. Sanctions screening fires in parallel via the on-chain sanctions-oracle primitive: Chainalysis OFAC Oracle is the dominant implementation on EVM chains, with Elliptic and TRM Labs as parallel attestation services. The screen runs at every transfer attempt thereafter, not only at subscription.
The NAV strike timing is the distinctive feeder-fund characteristic. The feeder does not maintain a continuous NAV — the master fund (Apollo Diversified Credit Fund) calculates NAV at end-of-period through its fund administrator. Industry-standard institutional fund administrators include State Street Alternative Investment Solutions, BNY Mellon Alternative Investment Services, Citco Fund Services, and SS&C GlobeOp [VERIFY ACRED-specific administrator]. Apollo Diversified Credit Fund's NAV cadence is typically monthly for institutional credit funds; quarterly variants exist [VERIFY specific cadence].
Once struck, the NAV is published to the feeder's on-chain oracle. The investor's tokenized share count is then calculated by dividing committed capital by struck NAV; settlement follows T+5 to T+10 after the strike date. This creates a multi-day window during which the investor is contractually committed but does not yet know the exact share count — operationally normal for institutional credit-fund subscriptions, structurally novel relative to the same-block subscription/mint mechanics of S5 / S6 / S7 and other on-chain pool patterns.
L3 EXECUTION, L4 ACCOUNT, and L5 APPLICATION all lit. C9 (prudential) applies because the feeder operator and the master fund's adviser carry credit-risk-management obligations across the NAV-strike-and-settle window. C13 (market integrity) applies to the NAV strike methodology, the choice of NAV oracle, and the disclosure of NAV publication latency to investors.
Step 3 · Master-Fund Sweep (Feeder → Master)Policy-Enforced
"A feeder fund wiring committed capital to the master fund's bank custodian — the moment when the subscription leaves the visible ledger and enters the master's investment program. The on-chain world ends here for the underlying capital."
The structurally distinctive feeder step. The feeder smart contract aggregates settled subscriptions from Step 2, then periodically sweeps the cash leg off-chain. Mechanically: the feeder's accumulated stablecoin balance is redeemed with the cash-leg issuer — Circle for USDC, with Paxos USDP and Circle EURC as analogous rails where applicable — and the issuer wires USD to the master fund's custody account.
The master-fund custody chain takes over. Industry-standard institutional custody banks fitting this role include BNY Mellon, State Street, JPMorgan Custody, and Northern Trust [VERIFY ACRED-specific master-fund custodian]. The master fund — Apollo Diversified Credit Fund — is a separate legal entity from the feeder, with its own SEC-registered investment adviser (an Apollo affiliate operating under the Investment Advisers Act of 1940). The adviser's investment-management discretion directs the deployment of swept capital into underlying private-credit positions per the master fund's investment program: direct loans, mezzanine credit, structured-credit positions.
Visibility transitions at this step. On-chain transparency stops at the feeder. The master fund's portfolio composition, leverage, concentration, and credit-quality state are disclosed through Apollo's quarterly investor reports and audited annual financial statements (auditors fitting the institutional-fund role include KPMG, EY, Deloitte, and PwC [VERIFY ACRED-specific auditor]) rather than via real-time on-chain accessors. Investors see the NAV the feeder publishes; they do not see the master's portfolio composition between disclosure cycles.
L5 APPLICATION lit. C8 (operational resilience) applies at the master-fund custody chain — SEC Rule 17a-4 (17 C.F.R. § 240.17a-4) for any broker-dealer touchpoint, IAA §204 (17 C.F.R. § 275.204-2) for the adviser, and the fund administrator's books-of-record obligations under the master's organizational documents. C10 (operational resilience) also covers the stablecoin off-ramp: the feeder's ability to convert USDC to USD is bounded by Circle's redemption capacity, regulatory posture, and operating uptime. AIFMD Article 24 reporting to ESMA applies if the master fund is marketed to EU investors under AIFMD passport [VERIFY ACRED's marketing-jurisdiction posture].
Step 4 · NAV Reporting & Periodic DistributionMixed EnforcementINGESTDETECTALERT
"A private-credit fund striking its monthly NAV — the GP signs off, the administrator publishes the marks, distributions are calculated, and LPs see their capital account update. In the tokenized feeder variant, the same monthly strike is published to an on-chain oracle that token holders consume directly."
The recurring rhythm of the feeder fund. At end-of-period (typically monthly for institutional private-credit funds [VERIFY ACRED-specific cadence]), the master adviser and fund administrator strike NAV based on marked-to-model or marked-to-market valuations of the underlying credit positions. The struck NAV is then published to the feeder's on-chain NAV oracle, and the token's per-unit value refreshes for everyone simultaneously.
Income distributions are calculated pro-rata across the single class of feeder tokens — there is no tranche structure and no waterfall priority. This is the structural inverse of S5 / S6 / S7, where multi-tranche waterfalls handle the priority problem that single-class feeders simply don't have. Cash flows back from the master custodian to the feeder smart contract as a USD wire, gets converted to USDC via Circle (or analogous stablecoin issuer rail), and is distributed to token-holder wallets through the feeder's distribution function. Redemption requests submitted during the prior redemption window are processed at this same NAV (settled in Step 5).
NAV oracle architecture is load-bearing for compliance integrity. Common patterns: Chainlink Data Feeds with a custom oracle adapter; Apollo-direct attestation via multi-sig with the adviser and administrator as signers; or a third-party NAV-publishing service [VERIFY ACRED-specific NAV oracle architecture]. Whichever pattern the feeder uses, the on-chain NAV is the single number every downstream consumer (the share-count calculation, any lending protocol that accepts the feeder token as collateral, secondary-market quoting on Securitize Markets) reads. The integrity of that single number is the operational center of gravity at this step.
L3 EXECUTION (NAV oracle + distribution function) · L4 ACCOUNT (token-holder balances refresh post-distribution) · L5 APPLICATION (master adviser + administrator + Big 4 auditor) all lit. C9 (prudential) applies to the master adviser's NAV calculation discipline; C11 (recordkeeping) applies to the fund administrator's books-of-record and the on-chain oracle publication trail; C13 (market integrity) applies to NAV publication cadence, methodology disclosure, and any departures from published methodology that require investor notification.
Step 5 · Exit — Secondary Market OR Scheduled RedemptionPolicy-Enforced
"An LP exiting an institutional private-credit fund — either by selling the position to another LP on a secondary market (private-wealth secondaries platforms in TradFi; Securitize Markets in the tokenized variant) or by submitting a redemption request to the GP for fulfillment at the next quarterly window. The two modes have wildly different liquidity profiles and price discovery."
Two exit modes with structurally different mechanics. **Mode 1: Secondary market sale on the SEC-registered ATS hosting the feeder token.** Securitize Markets is the load-bearing ATS for ACRED specifically [VERIFY Form ATS / ATS-N filing]; Prometheum, INX Securities, tZERO, and OnChain Markets operate the same venue category for similar tokenized feeder funds whose tokens list elsewhere. Reg ATS Rule 301 governs the venue's broker-dealer registration and filing; Rule 303 governs the ATS recordkeeping. The trade settles at the bid/offer the buyer accepts — which may diverge from the most recent struck NAV due to thin order books, buyer-specific accreditation overhead, and per-transfer transfer-restriction-module cost overhead.
**Mode 2: Scheduled redemption window.** The investor submits a redemption request through the Securitize subscription portal; the request queues for the next redemption window (typically quarterly for institutional private-credit funds with 60–90 days advance notice [VERIFY ACRED-specific cadence and notice period]). At the window's strike date, the master fund processes the redemption at the struck NAV; the master adviser sources the redemption from the master fund's available liquidity (or, in stressed conditions, from selective portfolio liquidation). Cash settles back through master custodian → feeder smart contract → USDC mint to the redeeming investor's wallet. Settlement T+5 to T+10 after strike.
L4 ACCOUNT and L5 APPLICATION lit: exit is policy-enforced. The Securitize transfer agent's master-register update is the legal record of redemption; the ATS venue's Rule 303 recordkeeping is the legal record of any secondary trade. The on-chain burn (for redemption) or transfer (for secondary sale) is the technical execution; the binding legal artifacts sit at L4 (transfer-agent register) and L5 (ATS records, master fund books).
Tax reporting (C12) applies on realized yield. US persons subject to IRS §6045 cost-basis reporting at the broker-dealer or ATS level. EU intermediaries subject to DAC8 (crypto-asset reporting) propagating to the investor's tax residence. The cross-border overlap can be material: a US-resident investor exiting an ACRED-pattern feeder via Securitize Markets may produce reportable events under §6045 (US) and DAC8 (EU intermediary touch point) simultaneously, plus the master fund vehicle's own AML reporting if structured as a Cayman or BVI feeder. Pool operators typically address this in offering documents but per-investor reconciliation is non-trivial.
Resolved 5 steps across 1 chain(s). 0 threshold(s) triggered. Frameworks: Common Reporting Standard / FATCA.
Coverage notes: 5 disclosed gap(s).