Interval Fund Market: 2018Q3 Update
- Net assets in the interval fund sector have increased 50% in the past year. The majority of growth is concentrated in the largest funds.
- BlackRock filed an initial registration statement, joining PIMCO, Blackstone, Nuveen, and several other major asset managers in providing an interval fund solution. BlackRock’s interval fund will implement a diversified credit strategy.
- Detailed competitive intelligence on fund structures and investment strategies is available through Interval Fund Tracker’s premium data product.
Interval Fund Asset Growth
Interval fund asset growth accelerated slightly in 2018Q3. Total interval fund net assets equalled $26.2 billion as of the most recent public filings, up 50% compared to the prior year, and 13% compared to the prior quarter.
Although new entrants are gaining share, interval fund assets remain highly concentrated. The five largest alone account for 65% of total net assets. Click here for AUM data on active interval funds.
Note All data in this post is based on SEC filings available as of October 1, 2018, unless otherwise indicated. To access data and code behind this article, see Interval Fund Tracker’s Bitbucket repository.
Fastest Growing Interval Funds
Thirty-six active interval funds reported net asset growth in the most recent quarter, twelve reported a decrease. Additionally, eight recently launched funds have still not yet filed their first financial statements. In general, large asset managers continue to dominate fundraising. The following list shows the ten fastest growing interval funds, based on net asset growth in the most recent reported quarter.
|Fund||Date of Reporting Period||Net Assets Increase MRQ|
|ACAP Strategic Fund||June 30||$271,237,227|
|Griffin Institutional Access RE Fund||June 30||$247,482,962|
|Versus Cap Multi-Manager RE…LLC||June 30||$177,936,192|
|Pioneer ILS Interval Fund||July 31||$172,271,210|
|Versus Capital Real Assets Fund LLC||June 30||$163,049,154|
|Stone Ridge Trust V||May 31||$136,126,557|
|PIMCO Flexible Credit Income Fund||June 30||$114,025,000|
|Total Income (plus) RE Fund||June 30||$111,083,943|
|Blackstone GSO Floating Rate Enhanced Income Fund||July 31||103,959,639|
|FS Credit Income Fund||July 31||$72,445,000|
Fee structures are becoming more standardized, and several service providers have become critical to the interval fund ecosystem. For detailed information on fund structure trends click here.
Pipeline of New Funds
Although not every new fund will succeed in raising capital, pace of fund registrations and launches is a reliable leading indicator of future sector growth.
New Fund Registrations
Six interval funds filed initial registration statements with the SEC in 2018Q2.
|Fund Name||Registration Date||Strategy|
|Lord Abbett Credit Opportunities Fund||2018-09-28||Credit|
|BlackRock Credit Strategies Fund||2018-09-21||Credit|
|1WS Credit Income Fund||2018-08-10||Credit|
|Thrivent Church Loan & Income Fund||2018-07-13||Real Estate|
|Broadstone Real Estate Access Fund*||2018-07-10||Real Estate|
*Broadstone replaced an earlier fund registration, simply changing from Maryland Corporation to Delaware Statutory Trust.
BlackRock’s Interval Fund
BlackRock’s plan to enter the interval fund space is notable. With $6.3 trillion in AUM, it requires a lot of assets to move the needle. They clearly see potential for growing acceptance of the structure. The BlackRock Credit Strategies Fund will invest across a variety of credit subsectors. Bloomberg recently profiled BlackRock’s post financial crisis growth.
There are currently 27 interval funds in registration, pending the release of final prospectuses and SEC approval. Based on number of funds, credit credit strategies, broadly defined, continue to be the most popular among fund managers getting ready to launch an interval fund.
New Funds Declared Effective
The SEC declared effective 5 interval fund registrations statements in 2018Q3, bringing $1.85 billion in new equity for sale into the market. Several of these funds are officially launching very quickly after filing initial registration statements. Its not clear whether this is due to an expedited SEC approval process, or simply fund managers moving quicker to get registration statements finalized.
The public interval fund offerings declared effective in 2018Q3 are shown in the following table:
|Fund Name||Effective Date||Investment Strategy||Maximum Offering Proceeds|
|American Beacon Apollo Total Return Fund||2018-09-12||Credit||$250,000,000|
|Pioneer ILS Bridge Fund||2018-09-11||Insurance Linked Securities||$300,000,000|
|Variant Alternative Income Fund||2018-08-30||Credit||$200,000,000|
|PIMCO Flexible Municipal Income Fund||2018-07-19||Credit||$1,000,000,000|
|Flat Rock Opportunity Fund||2018-07-02||Credit||$100,000,000|
The interval fund space has expanded rapidly in recent years. Click here for historical data on fund launches.
Premium Data Product
Looking for detailed competitive intelligence on the new interval funds entering the market? Interval Fund Tracker’s new premium service has comprehensive analytics on fund terms and fee structures. That’s why many of the top asset managers and service providers have signed up as Premium Members of Interval Fund Tracker.
Research and Media Coverage
Interval Fund Tracker is frequently quoted in the financial media. Notable articles from 2018Q3 include:
Interval funds boom as investors eye fire sale risk Financial Times
A safer way to invest in private debt Barrons
Interval Fund Whitepapers and Research
Ernst and Young Published : Interval Funds: an Unexpected Revival for an old Vehicle Structure. Has a complete overview of setup requirements and ongoing operational responsibilities for interval fund managers.
Morningstar published Do Interval funds have a Future ? , and Interval Funds: A Dissenting Opinion. (direct links are paywalled after a few days, but readers without a subscription can access the non-paywalled versions via the Internet Archive:Wayback Machine)
For more media coverage and sector research from across the industry, see the Research section of this site.