Munder Capital

, adviser to the popular -- but

closed to new investors --

(MNNAX) - Get Report

NetNet fund, plans a

closed-end Net fund,

@Vantage Trust

, that will put a significant portion of its assets into not-yet-public companies.

The new fund will be managed by the same team that runs the $10.3 billion NetNet fund.

Although there's no shortage of Internet funds, this one's closed-end status makes it stand out. While mutual funds can invest only up to 15% of their assets in private companies, closed-ends don't have that limitation. This fund will be able to put up to 40% of its assets in pre-IPO Net stocks, according to a filing with the

Securities and Exchange Commission

. (The paperwork doesn't disclose when the fund will begin offering its shares.)

Unlike

open-end funds that continually offer shares to investors, closed-end funds offer a finite number of shares, which usually trade on an exchange. This fund, however, won't be listed on an exchange. Instead, shareholders only will be able to sell shares back to Munder on a quarterly basis. Each quarter, only 5% of the fund's shares may be sold.

@Vantage will invest in Net companies of any size worldwide, focusing on new media, consumer electronics and wireless companies, in addition to traditional businesses using the Net to grow their earnings. Of the 40% the proposed fund can invest in private companies, up to half can be invested with private venture capital funds, which spread the money among various private Net shops.

The fund's investments in nonpublic companies will focus on those that have revenue and are nearing their initial public offerings. Despite these precautions, these private investments will entail significant risk. While publicly traded Net stocks can be small, aggressive and unprofitable, private companies can be even less stable. They also aren't as liquid because they don't trade on an exchange. The fund is also nondiversified, which means its managers can make big bets on relatively few holdings.

Individual investors of modest means rarely get the opportunity to invest in private companies, typically the domain of high-net-worth and institutional investors. The fund's minimum investment will be $10,000, or $2,000 for those investing through an IRA.

Munder's showing some moxie by rolling out a risky Net fund as the sector is sputtering. Since

TheStreet.com Internet Sector

index's March 10 peak, it's down more than 36%.

NetNet has a 82.7%, three-year annualized return, but is down 20.8% since Jan. 1. That's not as bad as the slew of rookie Net funds that have rolled out in the past six months.

(JAMFX) - Get Report

Jacob Internet, run by high-profile manager Ryan Jacob, is down 44.6% so far this year.

The new Munder fund won't be cheap. It comes with a 4% sales charge in addition to a 3% annual fee. Although that's much higher than the average tech fund's 1.77% annual fee, according to

Morningstar

, the fund's private-company appetite makes this an apples-to-oranges comparison.