Four new interval funds filed registration statements in November.
|Denali Structured Return Strategy Fund
|Cion Grosvenor Infrastructure Fund
|Nuveen Enhanced Floating Rate Income Fund
|Octagon XAI CLO Income Fund
For a list of all interval funds with pending registration statements, see New Interval Fund Registrations and Launches
Denali Structured Return Strategy Fund
Denali Structured Return Strategy Fund filed a draft registration statement on November 28, 2023. The fund will use a structured return strategy by investing a substantial majority of assets in income-producing securities while also investing a small portion of assets in call option spreads on a large capitalization U.S. equity index. Denali’s interval fund has one share class, and it is not subject to a sales charge. The management fee will be 1.65% of average daily net assets.
Liquid Strategies, LLC, serves as the investment adviser for the fund. Liquid Strategies has approximately $500 million in discretionary AUM across various ETFs. Mark Garfinkel, CFA® and Shawn Gibson serve as the portfolio managers for the Denali Structured Return Strategy Fund.
CION Grosvenor Infrastructure Fund
CION Grosvenor Infrastructure Fund filed a draft registration statement on November 22, 2023. The fund will seek attractive risk-adjusted returns and current income through a variety of infrastructure investments and infrastructure -related assets or businesses. It will use a master-feeder structure, investing substantially all of its assets in Cion Grosvenor Infrastructure Master Fund, LLC. CION’s new infrastructure interval fund is offering 5 share classes, with minimum initial investment levels ranging from $1,000 to $1,000,000. The draft registration statement does not yet include fee levels.
CION Grosvenor Management, LLC, the fund’s adviser, is a joint venture between affiliates of Grosvenor Capital Management LP, and Cion Investment Group LLC. Grosvenor, which also serves as the interval fund’s sub-adviser, is a global alternatives investment firm with over $76 billion in AUM. Grosvenor manages private equity, infrastructure, real estate, credit, absolute return strategies, and multi-asset class opportunistic investments. CION currently sponsors, among other products, CION Investment Corporation (NYSE: CION), a publicly listed business development company that currently manages approximately $1.8 billion in assets, and the CION Ares Diversified Credit Fund, a globally diversified interval fund that currently manages approximately $4.1 billion in assets.
Nuveen Enhanced Floating Rate Income Fund
Nuveen Enhanced Floating Rate Income Fund filed a draft registration statement on November 21, 2023. The fund will focus on floating rate loans, including senior secured loans, unsecured and/or subordinated loans, loan participations, and unfunded contracts. Scott Caraher and Coale Mechlin will serve as portfolio managers . The registration statement includes one share class: Class I, with a $100,000 minimum initial investment. The draft registration statement does not yet include fee levels.
Nuveen is the investment management arm of TIAA, a life insurance company founded in 1918 by the Carnegie Foundation for the Advancement of Teaching and is the companion organization of College Retirement Equities Fund. As of June 30, 2023, Nuveen managed approximately $1.2 trillion in assets. Nuveen has one other interval fund: Nuveen Enhanced High Income Fund, which has approximately $203 million in net assets.
Octagon XAI CLO Income Fund
Octagon XAI CLO Income Fund filed a draft registration statement on November 13, 2023. This fund will purchase CLO debt and CLO equity in both primary and secondary markets. The maximum amount of managed assets in CLO equity will be 20%. The registration statement includes two share classes: Class A and Class I. The draft registration statement does not yet include fee levels.
XA Investments LLC, will serve as the investment adviser, and Octagon Credit Investors will serve as the sub-adviser. As of September 30, 2023, the Adviser managed approximately $507 million in assets. The Sub-Adviser, as of September 30, 2023, manages $34.8 billion in assets across 50 CLOs, 11 commingled funds, 20 separately managed accounts and one other registered investment company. Portfolio Managers include Andrew D. Gordon, Michael B. Nechamkin, Gretchen M. Lam, Lauren B. Law, Sean M. Gleason, and Maegen Gallagher.
CLOs are becoming an increasingly important niche within the Private Credit Interval Fund category. There are 58 active credit funds, and of those 12 of them have the word “CLO” in the short version of their strategy description, indicating CLOS are one of their main areas of focus. Ignites covered the XAI’s new interval fund in the context of this trend in a recent article (subscription required)
Interval Fund and Alternative Investment Industry Links
Variant Investments Expands Team With Key Executive Hires Interval Fund Tracker
In June 2023, the Wildermuth Fund announced that its Board had approved a plan of liquidation. Normally, interval funds conduct regular quarterly repurchases. However, the Wildermuth Fund suspended repurchases as part of the liquidation plan.
Even prior to the liquidation plan, there pent up demand for investors wanting to exit the Wildermuth Fund. It is one of the small group of funds that has needed to prorate repurchase offers in the most recent year.
Interval Fund Tracker covered this tender offer in an article here.
Click here to access the offer documents.
In past conversations with RIAs, Pender Capital executives often heard that the firm’s investment offerings were attractive, but could only be a fit for a select subset of clients. That’s why in April of this year, the firm decided to launch an interval fund, with an investment minimum of $10,000 and no accreditation requirements.
There are 23 different interval and tender offer funds available on wirehouse platforms, and the majority are private credit or municipal bond focused. Morgan Stanley has the most interval funds (16) on platform followed by UBS (12) and Merrill Lynch (9) and Wells Fargo (5).
As noted in a recent FactRight Weekly Update, Broadridge has a new report out with some interesting insights on the broker-dealer channel. According to this report, the broker-dealer channel is expected to grow at a faster rate than the RIA channel in the coming years.
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