Interview with Paul Ghaffari: How did Pursuit Funds get started?

TRANSCRIPT

Why did you start Pursuit Funds?

We founded Pursuit Funds to unlock access to uncorrelated investments and overlooked private debt markets. We saw an opportunity to bring institutional quality management to the RIA market, their investors and other investors like wealth managers and family offices. Our philosophy is really very simple. There’s a large opportunity today in underserved, inefficient, lower middle market niche asset-based investments. We focus on limited competition to be able to give our investors the asymmetry of risk mitigation on the downside and potential capital appreciation and income on the upside,

How did your prior experiences lead you here?

Several years ago, I had the opportunity to form a hedge fund platform with a couple of other partners called Frontpoint Partners, which we set up in the year 2001. The timing was interesting. We were coming off the .com bubble burst, and there was a real demand that we unlocked in the institutional community, specifically in pension funds, public pensions, private pensions, E&Fs trying to gain access to alpha strategies. We set up the platform with a large seed from an insurance company, and over the next six years, we built it up into a multi-billion dollar platform.

So there’s an analog there between what we were doing then and the opportunity before us today that there’s an underserved market. There’s heavy demand coming from a specific channel, and if you can set up the right infrastructure team with experience, design the products, and execute well, you can have great success. And toward the end of the year, 2006, we actually sold the platform to Morgan Stanley.

How did you gain experience in niche investing in these idiosyncratic assets?

After the FrontPoint experience, I went to run a single family office in Seattle called Vulcan Capital, which was the family office of the late Paul Allen. There were some other similarities there as well that gave me experience and the context to look at the opportunity before us today in the market. We were heavily invested in alternatives, in idiosyncratic investments in technology, in the health sciences. And we also saw an opportunity in the credit markets following the burst of GFC in 2008-9, where banks were leaving the market. Banks were forced to shed assets. Banks were being heavily regulated. There were not a lot of other investors stepping in. And so we were able to go into the markets and find opportunities in special situations, stressed and even some distressed credit opportunities, and ran that to a very large sleeve within the family office. And I saw, again, there a void: a gap where there weren’t a lot of buyers, and there was this big opportunity that came out of an event like GFC.

How did you first approach investing in these niche markets? What was your kind of first foray into niche investing?

Following my experience at the family office, I moved further into private debt and credit. I co-founded a firm several years ago, and we began to look at niche opportunities and some emerging places in asset-backed loans and asset-backed credit. Things like river barges, inland marine finance, rail car finance, equipment finance. And we did that very successfully for a few years. And that’s where I met you, and that’s where I met Seth Lowry. And then we saw the opportunity to take this one step further.

What do you think makes what we’re doing here at Pursuit Funds unique?

We believe we’re connecting underserved investors to overlooked opportunities through proprietary sourcing and thoughtful structuring. Secondly, we have a team and an experienced set of very, very tried and experienced underwriters, sourcers, risk managers and portfolio managers. And we’re taking a very rigorous, structured, institutional-grade investment discipline and delivering it into our investor base. I would say lastly, we believe we’re fiercely independent. We’re unaffiliated and unconstrained in our entrepreneurial ability and our independent thinking that enables us to source structure and deliver results to investors.

Now, with all of that experience, people always want to know, why are you still doing this?

Okay. Well, I think the answers to that are: number one, I’m a very bad golfer. Number two, the word retirement really isn’t in my lexicon. And, seriously, most importantly, when I started getting into this niche specialty debt management several years ago, I just saw an opportunity here that I think really rivaled what we saw 25 years ago with my FrontPoint experience. I think it’s every bit as good, every bit as rich, and I just could not not take advantage of the opportunity with you and the other partners.

Subscribe for more insights

Correlation is a statistical measure that describes how two variables move in relation to each other. Investments with low correlation to broad stock and bond markets respond mildly to fluctuations in these markets, which may be helpful in achieving diversification.

Institutional-grade refers to investment management that meets the standards of large institutional investors like pensions, endowments and foundations, including rigorous underwriting, disciplined portfolio oversight, and robust operational controls.

Before investing you should carefully consider the Fund’s investment objectives, risks, charges and expenses. This and other information is in the prospectus, a copy of which may be obtained from the Fund at (888) 723-1542 or by visiting pursuitfunds.com. An investor should read the prospectus carefully before investing.

Summary of Risk Factors

Pursuit Asset-Based Income Fund (“GOFOX”) is a closed-end management investment company structured as an “interval fund” that expects to invest at least 80% of its net assets (plus any borrowings for investment purposes) in specialized investments in smaller, undercapitalized assets and markets, referred to as “Niche Asset-Based Alternatives.” This investment involves a high degree of risk and should be considered speculative. You should purchase these securities only if you can afford the complete loss of your investment. You should read the prospectus carefully for a description of the risks associated with an investment in GOFOX. These risks include, but are not limited to, the following:

The Fund is not intended as a complete investment program but rather the Fund is designed to help investors diversify into private credit investments.
The Fund is a “nondiversified” management investment company registered under the Investment Company Act of 1940. Since the Fund is non-diversified, it is subject to higher reduction of capital and volatility than a fund more proportionately allocated among a large number of securities.
An investment in the Fund involves risk. The Fund is new with no significant operating history by which to evaluate its potential performance. There can be no assurance that the Fund’s strategy will be successful.
The Fund may use leverage its investments by “borrowing.” The use of leverage increases both risk of loss and profit potential.
Shares of the Fund are an illiquid investment. Shares are not listed on any securities exchange and it is not anticipated that a secondary market for shares will develop.
Shares are appropriate only for those investors who can tolerate a high degree of risk, and do not require a liquid investment. You should generally not expect to be able to sell your Shares (other than through the limited repurchase process), regardless of how we perform. Although we are required to and have implemented a Share repurchase program, only a limited number of Shares will be eligible for repurchase by us.
There is no assurance that you will be able to tender your shares when or in the amount that you desire. Although the Fund will offer quarterly liquidity through a quarterly repurchase process, an investor may not be able to sell or otherwise liquidate all their shares tendered during a quarterly repurchase offer. Because you will be unable to sell your Shares or have them repurchased immediately, you will find it difficult to reduce your exposure on a timely basis during a market downturn.
The Fund intends to invest in private companies and private loans for which very little public information exists. Such companies are also generally more vulnerable to economic downturns and may experience substantial variations in operating results. The privately held companies and below-investment-grade securities in which the Fund will invest may be difficult to value and are illiquid. The Fund’s investment in private credit companies is speculative and involves a high degree of risk, including the risk associated with leverage.
Asset-based investments often involve risks that are different from or more acute than risks associated with other types of debt instruments. For instance, asset-based investments may be particularly sensitive to changes in prevailing interest rates. In addition, the underlying assets are subject to prepayments that shorten the securities’ weighted average maturity and may lower their return.
To the extent a loan is secured, there can be no assurance as to the amount of any funds that may be realized from recovering and liquidating any collateral or the timing of such recovery and liquidation and hence there is no assurance that sufficient funds (or, possibly, any funds) will be available to offset any payment defaults that occur under the loans.

The Fund commenced operations on October 1, 2025 (“Commencement of Operations”) following the reorganization of the Pursuit Alternative Income Fund, LP (the “Predecessor Fund”) with and into the Fund, which was effective as of the close of business on September 23, 2025. The Predecessor Fund maintained an investment objective, strategies and investment policies, guidelines and restrictions that are, in all material respects, equivalent to those of the Fund. At the time of the reorganization, the Fund and the Predecessor Fund shared the same investment adviser and portfolio managers. The Predecessor Fund commenced operations on October 11, 2024.

Pursuit Fund Advisers, LLC (“Pursuit Funds”) serves as the investment adviser to the Pursuit Asset-Backed Income Fund. The Fund is distributed by Distribution Services, LLC which is not affiliated with Pursuit Funds or any of their affiliates.