Faes & Co Income Fund · Self-directed IRA investors
Tax-advantaged. Asset-backed.
Invest in the Faes & Co Income Fund through a self-directed IRA and let a real estate-backed income stream compound inside your retirement account.
Retirement capital, invested differently
There is roughly $49 trillion sitting in US retirement plans — and most of it is confined to stocks, bonds and mutual funds. A self-directed IRA lets you put part of yours to work in private, income-producing assets like the Faes & Co Income Fund.
The Faes & Co Income Fund is an open-ended private credit fund that invests in short-term residential real estate bridge loans across the United States, originated by our group company F2 Finance. Every loan is secured by a first mortgage against residential property, and the Fund is designed to deliver a consistent, stable, asset-backed return, paid quarterly.
Because an IRA is a tax-exempt trust, the quarterly income the Fund pays into a self-directed IRA is not taxed as it is received. For investors in high-tax states — many of ours are in California — that can be the difference between a good return and a great one. A growing number of our investors now hold the Fund this way.
9.5%
Target return per annum †
Quarterly
Distributions paid, or reinvested
90 days
Liquidity, after initial 12-month lock-in
Why a self-directed IRA
Four reasons investors hold the Income Fund in a retirement account.
01
Tax-exempt compounding
Income paid into a traditional or Roth IRA is not taxed inside the account, so distributions can be reinvested and compound without an annual tax drag. With a Roth, qualified withdrawals after 59½ are tax-free for life.
02
Real diversification
Most of our self-directed investors keep a brokerage IRA for public markets and a self-directed IRA for private assets. A short-duration, first-lien real estate loan portfolio behaves very differently from an equity index.
03
You choose the investment
A self-directed custodian does not sell products or take commissions. You identify the investment — in this case the Fund — and the custodian holds it in the name of your IRA. All of the income goes to your account.
04
Any stage of life
Self-directed IRAs are most often funded by rolling over an old 401(k), 403(b) or TSP from a previous employer — something investors in their thirties do as readily as those in retirement. Traditional, Roth, SEP and solo 401(k) plans can all be self-directed.
How it works
Three steps. Usually a couple of weeks from first call to funded.
1
Open a self-directed IRA
Apply online with a self-directed custodian such as Directed IRA, our webinar partner. The application takes a few minutes and a copy of your ID. If you already have a self-directed account elsewhere, you can use that.
2
Fund the account
Make a contribution, transfer from an existing IRA, or roll over a former employer plan — 401(k), 403(b), TSP and similar. Rollovers between retirement accounts are not distributions, so no tax or penalty is triggered.
3
Direct the investment
Complete our investor onboarding and subscription documents in the name of your IRA. The custodian reviews and signs, and wires the subscription to the Fund. Quarterly distributions are then paid back to your IRA.
Custodian fees are set by the custodian, not by Faes & Co. As a guide, Directed IRA charges a one-off account opening fee, a flat annual account fee and a modest processing fee per investment — typically a few hundred dollars a year in total, with no commissions on the investment itself. We are happy to introduce you to their team.
Webinar · 29 minutes
Investing with a self-directed IRA.
Christian Faes of Faes & Co talks with Nate Hare, Vice President of Directed IRA, about what a self-directed IRA is, who it suits, how the tax treatment works, what it costs and what the process looks like — and why it has become such a popular route into alternative investments.
Traditional or Roth
Both are tax-exempt inside the account. The difference is when you pay.
Traditional self-directed IRA
Contributions are typically pre-tax, and the Fund's income accumulates untaxed. You pay ordinary income tax only when you take distributions from the IRA in retirement.
- Most common home for a rolled-over 401(k)
- Income and gains untaxed while invested
- Taxed on withdrawal
Roth self-directed IRA
Contributions are after-tax — you pay tax on the seed, not the growth. Qualified distributions after age 59½ are tax-free, and a Roth can pass to heirs with further years of tax-free growth.
- Income and gains untaxed while invested
- Qualified withdrawals tax-free for life
- Favoured by investors stacking income-producing assets
Faes & Co is not a tax or investment adviser. Which account type suits you depends on your circumstances — please speak with your tax adviser.
Common questions
What investors ask us about investing through an IRA.
Is a private fund like this actually permitted in an IRA?
Yes. The tax code prohibits only two categories of investment inside a retirement plan: life insurance contracts and collectibles. Income funds, debt funds, real estate and notes are all permitted, provided a qualified custodian holds the asset on behalf of the plan.
Do I still need to be an accredited investor?
Yes. The Fund is available to accredited investors only, and accreditation is assessed on you as the IRA owner. The investor verification step in our onboarding is the same whether you invest personally or through an IRA.
Will moving money into a self-directed IRA trigger tax or penalties?
A transfer from one IRA to another, or a rollover from a former employer plan, is not a distribution to you — the money moves between retirement accounts, so no tax or early-withdrawal penalty applies. Taking money out of a retirement account to invest in your own name is a different matter, which is precisely why investors use this structure.
How are the quarterly distributions handled?
Distributions are paid to your IRA at the custodian, not to you personally. You can elect to receive them in cash within the IRA or reinvest them in the Fund to compound. The same 12-month initial lock-in and 90-day redemption terms apply as for any other investor.
My adviser says this is risky or will cost me in taxes. Is that right?
The tax concern is usually a misunderstanding — no distribution occurs when an IRA invests in a fund. On risk, we encourage every investor to treat the Fund as one allocation within a diversified portfolio, and to read the offering documents and risk factors carefully. Good advisers increasingly recommend a self-directed account specifically to add private credit alongside public markets.
Get started
Talk to us about investing through your IRA.
Tell us you would like to invest via a self-directed IRA and we will walk you through onboarding, introduce you to a custodian if you need one, and prepare the subscription documents in the name of your account.
† The Fund pays a target return of 9.5% for investments over $250,000; for investments less than this, the Fund pays a target return of 8.5%. Returns are a target distribution rate, are not guaranteed, and are paid at the discretion of the Fund. Capital is at risk. Past distributions are not a guarantee of future distributions. Redemptions are subject to the initial 12-month lock-in, notice requirements and the terms of the Fund's offering documents. This page is for information only and is not tax, legal or investment advice; the tax treatment of retirement accounts depends on your individual circumstances and may change. Faes & Co is not affiliated with Directed IRA and receives no compensation from any custodian. Interests in the Fund are offered only to accredited investors by way of the Fund's offering documents.
Investor relations
Contact our investor relations team
Questions about investing through a self-directed IRA, the onboarding process or our offshore feeder? Michael and Analisa are happy to help.
Michael Tschirley
London. Offshore Investor Relations & Distribution
Analisa Gagliardi
Los Angeles. US Investor Relations & Distribution