Private Exchange Funds - What are the advantages?

Can someone explain what the advantages are? I cant understand why teaming up with other individuals who have a low basis position in the same security offers you any advantage.,958709 nevermind

According to the first and last paragraph under the title “A Private Exchange Fund Alternative” (P277~278 of CFAI Texr Vol 2), the regulations of this kind of fund was not finalized when this article was written. Furthermore, no update in the curriculum. I don’t think CFAI shall test this issue on the exam ! Why it was tested on 2007 exam ?

private exchange is when you exchange your stock position for a position in the entire index, thus you get diversified instantly downside is that you may have to sell your position at a discounted price for them to buy it and your stock must be part of the index