Mutual fund that is managed first as a private fund and only later, after a successful period lasting from four to as many as twenty years, it is opened to the public for investment. Such funds are initially financed by a few select investors (usually the management company's owners and/or its employees) and are tested with different portfolio combinations. In some cases SEC allows the fund's performance record in its incubation period to be used in marketing the fund to the public. also called limited distribution fund.

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