Cross Shore - Fund Documents

Prospectus SAI Semi-Annual Report Annual Report Q1 Holdings Q3 Holdings

PROSPECTUS

CROSS SHORE DISCOVERY FUND

Institutional Shares

July 29, 2020

Cross Shore Discovery Fund (“Fund”) is a Delaware statutory trust registered under the Investment Company Act of 1940 (“1940

Act”) as a non-diversified, closed-end management investment company. The Fund invests substantially all of its assets in private

investment vehicles or “hedge funds” (“Portfolio Funds”) managed by a variety of different investment managers. The Portfolio

Funds are not registered under the 1940 Act and the Fund principally invests in Portfolio Funds organized outside of the U.S.

The Fund’s investment objective is to seek rates of return over a full market cycle that exceed the average rate of return of the HFRX

Equity Hedge Index with capital draw downs and overall volatility less than broad U.S. equity market indices. A capital draw down

is a period during which the Fund’s net asset value (the “NAV”) is below its most recent, highest NAV. The HFRX Equity Hedge

Index, an equally weighted performance index, consists of investment managers who maintain positions both long and short in

primarily equity and equity derivative securities.

This Prospectus offers Shares of the Fund’s Institutional class (“Institutional Shares”) which may be purchased through the

Distributor or a Selling Agent or through certain selling shareholders of the Fund (the “Selling Shareholders”). In the future, the

Fund may offer other classes of common shares with different pricing structures.

This Prospectus concisely provides information that you should know about the Fund before investing. You are advised to read

this Prospectus carefully and to retain it for future reference. A Statement of Additional Information dated July 29, 2020, as may be

amended (“SAI”), containing additional information about the Fund, has been filed with the Securities and Exchange Commission

(“SEC”) and is incorporated by reference in its entirety into this Prospectus. You may request, at no charge, a copy of this SAI

(the table of contents of which is on the last page of this Prospectus), annual and semi-annual reports to shareholders, and other

information about the Fund, and make shareholder inquiries by calling (844) 300-7828, by writing to the Fund or by visiting the

Fund’s website (http://www.crossshorefunds.com). These materials, as well as the Fund’s annual and semi-annual reports and

other information about the Fund, are available on the SEC’s website at

www.sec.gov

. If you purchase Shares in the Fund, you will

become bound by the terms and conditions of the Agreement and Declaration of Trust of the Fund as may be amended from time to

time (the “Declaration of Trust”).

Before making an investment decision, you or your adviser should consider factors such as net worth, income, age, risk

tolerance and liquidity needs in evaluating whether the Fund is a suitable investment for you. Short-term investors and

investors who cannot bear the loss of some or all of their investment or the risks associated with the limited liquidity of an

investment in the Fund should not invest in the Fund. See “Principal Risks.”

Neither the SEC nor any state securities commission has approved or disapproved of these securities or determined

if this

Prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

Price to Public

Proceeds to the Fund

Per Institutional Share

(1)

At Current NAV

Amount Invested at Current NAV

Sales Load

None

(2)

None

(2)

Total

38,149,663.80

(3)

38,149,663.8

(3)

(1) Institutional Shares are offered continuously at a price equal to the then current NAV per Share which was $

96.42

as of

June 1,

2020.

Institutional Shares are not subject to a sales load.

(2) See, “Plan of Distribution” for information regarding other compensation to be paid in connection with the sale of Institutional Shares.

(3) These estimated proceeds assume the sale of all Institutional Shares registered under this registration statement. Estimated proceeds are based

on the Fund’s NAV of $

96.42

, as of

June

1, 2020.

You should not construe the contents of this Prospectus as legal, tax or financial advice. You should consult with your own

professional advisers as to the legal, tax, financial or other matters relevant to the suitability of an investment in the Fund.

You should rely only on the information contained in or incorporated by reference into this Prospectus. The Fund has not authorized

anyone to provide you with different information. The Fund is not making an offer of these securities in any jurisdiction where the

offer is not permitted.

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of

the Fund’s shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports from the

Fund or from your financial intermediary such as a broker-dealer or bank. Instead, the reports will be made available on a website,

and you will be notified by mail each time a report is posted and provided with a website link to access the report.

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take

any action. You may elect to receive shareholder reports and other communications from the Fund electronically by contacting the

Fund at 1-844-300-7828 or, if you own these shares through a financial intermediary, by contacting your financial intermediary.

You may elect to receive all future reports in paper free of charge. You can inform the Fund that you wish to continue receiving paper

copies of your shareholder reports by contacting the Fund at 1-844-300-7828. If you own shares through a financial intermediary,

you may contact your financial intermediary or follow instructions included with this document to elect to continue to receive

paper copies of your shareholder reports. Your election to receive reports in paper will apply to all funds held with your financial

intermediary.

An investment in the Fund is speculative, involves significant risk and is not suitable for all investors. Before investing, you should

consider the following specific risks of an investment in the Fund:

• It is possible that you may lose some or all of your investment and attempts by the Fund to manage the risks of investing

in Portfolio Funds does not imply that your investment in the Fund is low risk or without risk.

• An investment in the Fund is illiquid and is not suitable for you if you need access to the money you invest.

• You may not have access to the money you invest for an indefinite period of time and you should not expect to be able to

sell the Fund’s shares of beneficial interest (“Shares”) regardless of how your investment in the Fund performs.

• You do not have the right to require the Fund to redeem or repurchase your Shares although the Fund may periodically offer

to repurchase Shares on such terms as may be determined by the Fund’s Board of Trustees (“Board”). See “Repurchases

of Institutional Shares” for a discussion of the Fund’s repurchase policy and its attendant risks.

• Shares are not, and are not expected to be, listed for trading on any securities exchange. To the Fund’s knowledge, there is

no, nor will there be, any secondary trading market for the Shares.

• Shares are subject to substantial restrictions on transferability and resale and may not be transferred or resold except as

permitted under the Fund’s Agreement and Declaration of Trust.

• Because you may not be able to sell your Shares, you will not be able to reduce your investment exposure to the Fund on

any market downturn. See “Principal Risks.”

In order to achieve its investment objective, Cross Shore Capital Management, LLC (the “Adviser”) allocates the Fund’s assets

among Portfolio Funds whose investment managers generally manage less than $1 billion in assets at the time of the Fund’s

investment, employ a long/short equity strategy and have a minimum of five years’ experience in equity research or portfolio

management. The Fund cannot guarantee that its investment objective will be achieved or that its investment program will be

successful.

Ultimus Fund Distributors, LLC (“Distributor”) acts as principal underwriter and distributor for the Shares on a best efforts basis,

subject to various conditions. The Distributor may retain additional broker-dealers and other financial intermediaries (each a “Selling

Agent”) to assist in the distribution of Shares and Shares are available for purchase through these Selling Agents or directly through

the Distributor. Shares are only offered to investors that are U.S. persons for U.S. federal income tax purposes.

Shares are only sold to investors qualifying as “Eligible Investors” as described in this Prospectus. The term “Eligible Investor”

is limited to investors that: (1) are U.S. persons for U.S. federal income tax purposes and (2) satisfy the definitions of “accredited

investor” as defined in Regulation D under the Securities Act of 1933, as amended. See “Eligible Investors.”

The Fund intends to accept initial and additional purchases of Institutional Shares from Eligible Investors who are “Institutional

Investors” or individual investors. “Institutional Investors” may include: (1) corporations, banks, trust companies, insurance

companies, investment companies, foundations, endowments, defined benefit plans, retirement plans and other similar entities and

(2) Eligible Investors investing through Selling Agents that have entered into an agreement with the Distributor to offer Institutional

Shares through a no-load network or platform. Selling Shareholders may use this Prospectus to resell Institutional Shares consistent

with the restrictions on transferability of the Institutional Shares as discussed in this Prospectus.

TABLE OF CONTENTS

Page

PROSPECTUS SUMMARY

SUMMARY OF FUND EXPENSES

FINANCIAL HIGHLIGHTS

THE FUND

USE OF PROCEEDS

INVESTMENT OBJECTIVE

PRINCIPAL INVESTMENT STRATEGIES

PRINCIPAL RISKS

ELIGIBLE INVESTORS

PLAN OF DISTRIBUTION

PURCHASES OF SHARES

REPURCHASES OF INSTITUTIONAL SHARES

TRANSFER OF SHARES

MANAGEMENT

PERFORMANCE

SERVICES

EXPENSES

DETERMINATION OF NET ASSET VALUE

DISTRIBUTIONS TO SHAREHOLDERS

DIVIDEND REINVESTMENT PLAN

CERTAIN TAX CONSIDERATIONS

CERTAIN ERISA CONSIDERATIONS

DESCRIPTION OF SHARES

OTHER INFORMATION

TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION

PROSPECTUS SUMMARY

This is only a summary and does not contain all of the information that you should consider before investing in the Fund’s

Institutional Shares. Before investing in the Fund’s Institutional Shares, you should carefully read the more detailed information

appearing elsewhere in this Prospectus, especially the information under the heading “Principal Risks.”

The Fund

Cross Shore Discovery Fund (the “Fund”) is a Delaware statutory trust that is registered under

the Investment Company Act of 1940, as amended (the “1940 Act”) as a non-diversified, closed-

end management investment company. Interests in the Fund (“Shares”) are also registered under

the 1940 Act and the Securities Act of 1933, as amended (the “1933 Act”). Although Shares are

registered under the 1940 Act and the 1933 Act, they are subject to substantial limitations on

transferability and resale.

The Fund operates as a “fund of hedge funds” and provides investors access to a variety of

professionally managed private investment funds that predominantly employ equity long/short

strategies (each a “Portfolio Fund”). These Portfolio Funds are not registered under the 1940 Act

and the Fund principally invests in Portfolio Funds organized outside of the U.S.

The Fund is suitable only for investors that can tolerate a significant amount of investment risk

and that do not require liquidity of their interests in the Fund.

This Prospectus offers Shares of the Fund’s Institutional class (the “Institutional Shares”). In the

future, the Fund may offer other classes of common shares with different pricing structures. In

order to add other classes of common shares, the Fund would need to acquire exemptive relief

from the SEC to operate as a multiclass fund. Until the Fund has obtained such exemptive relief,

the Fund may not offer shares to the public and must clearly disclose that shares are not available

to the public.

The Offering

•

Offering of Institutional Shares by the Fund

– the Fund is offering Institutional Shares

on a continuous basis. Institutional Shares are offered at their net asset (“NAV”) per Share

as of the first Fund business day (“Business Day”) of each month. For purposes of this

Prospectus, “Business Day” means any day that the New York Stock Exchange (“NYSE”)

is open for business.

•

Resale of Institutional Shares by Selling Shareholders –

this Prospectus also relates

to the possible resale by certain of our security holders of up to 157,181.16 Institutional

Shares that were issued and outstanding prior to January 30, 2015, the effective date of the

Fund’s initial registration statement (the “Selling Shareholders”). The Fund does not expect

the Selling Shareholders to re-sell their interests in the Institutional Shares to third parties

because: (1) the Selling Shareholders acquired the Institutional Shares for investment

purposes only and not with any view toward a resale thereof; and (2) the Institutional Shares

are subject to substantial restrictions on transferability. Also, the Selling Shareholders have

confirmed that they expect to complete any liquidation of their interests in Institutional

Shares through participation in repurchase offers by the Fund when and if authorized by the

Fund’s Board of Trustees (the “Board”).

See “Purchases of Shares,” “Repurchases of Institutional Shares” and “Plan of Distribution,”

and “Transfer of Shares.”

Eligible Investors

The Fund will only sell Institutional Shares to a prospective investor who is a U.S. person for

U.S. Federal income tax purposes and who: (1) satisfies the definition of “accredited investor” as

defined in Regulation D under the 1933 Act; or (2) is a “knowledgeable employee” as that term

is defined under Rule 3c-5 of the 1940 Act. Investors meeting these requirements are referred to

in this Prospectus as “Eligible Investors.”

After an initial purchase, shareholders subscribing for additional Institutional Shares

will be required to verify their status as Eligible Investors at the time of each additional

subscription. The qualifications required to invest in the Fund appear in the subscription

agreement that must be completed by each prospective shareholder