Note: this article has been updated to include First Eagle Real Estate Lending Fund, which filed its registration statement at around 5:00 PM EST on the last business day of the year.
In the final month of 2023, five new interval funds filed draft registration statements.
|First Eagle Real Estate Lending Fund
|StepStone Private Credit Income Fund
|Lord Abbett Flexible Income Fund
|Jackson Real Assets Fund
|Beacon Pointe Multi-Alternative Fund
|Fund of Funds
Next month we will release a comprehensive overview of developments and trends in the unlisted closed end fund market in 2023. In the meantime, this post highlights the three new funds that registered in December 2023.
For a list of all interval funds with pending registration statements, see New Interval Fund Registrations and Launches
First Eagle Real Estate Lending Fund
First Eagle Real Estate Lending Fund filed a draft registration statement on December 29, 2023. This fund will invest in a portfolio of public and private real estate related debt investments. These will include: short-term mortgage loans of 12-36 months to real-estate builders and other investors to purchase, renovate and resell or rent residential, single or multi-family properties, homebuilder development financing loans used to acquire land and sell finished lots to homebuilders, mezzanine loans, and public debt securities including RMBS and CMBS.
First Eagle Real Estate Lending Fund lists two share classes : Class A-2 and Class I. The minimum investment for Class A-2 Shares is $2,500, and the minimum investment for Class I is $1 million. Investors in Class A-2 shares will pay a sales commission of up to 2.50%. In contrast, there is no sales load on Class I Shares. Distribution and shareholder servicing fees are left TBD in the draft registration statement Similarly, the draft registration statement indicates that a management fee will be charged as a percentage of managed assets, but the specific amount is still TBD.
First Eagle Investment Management will serve as the fund’s Adviser, and Napier Park Global Capital(US) LP will serve as sub-adviser. The adviser has approximately $124 billion in total AUM across mutual funds, interval funds and separately managed accounts. First Eagle Credit Opportunities, is a credit focused interval fund that launched in 2020, and has approximately $600 million in net assets.
Stepstone Private Credit Income Fund
Stepstone Private Credit Income Fund filed a draft registration statement on December 29. The fund will focus on direct lending, and will use a multi-lender approach, utilizing a variety of non-bank or corporate lenders to source investment opportunities. It may also implement a portion of its strategy via secondary market transactions.
The draft registration statement has four share classes: Class T, Class S, Class D, and Class I. The minimum investment for Class I Shares will be $1 million, and the minimum investment for all other share classes will be $25,000. Class T and Class S Shares will have a 3.5% sales load. In contrast, Class D and Class I Shares will not have any sales load. Class S and Class T shares will have distribution/servicing fees of 0.85% while Class D shares will have distribution/servicing fees of 0.25%. In contrast, Class I shares will not have any distribution or servicing fees. Stepstone Private Credit Income Fund will have a base annual management fee of 1.15% along with a performance fee of 10% over a 5% hurdle.
StepStone Private Wealth LLC will serve as the adviser, and their affiliate will serve as subadviser. The adviser is a subsidiary of Stepstone Group, Inc. which has $146 billion in AUM and the parent company is currently listed on NASDAQ under the symbol STEP. Stepstone also sponsors the Stepstone Private Infrastructure Fund, an interval fund with approximately $26 million in net assets, along with two tender offer funds: Stepstone Private Venture & Growth Fund ($277 million in net assets), and Stepstone Private Markets ($1.5 billion in net assets).
Lord Abbett Flexible Income Fund
Lord Abbett Flexible Income Fund filed a draft registration statement on December 26. The fund plans to combine short duration liquid credit and private credit strategies. Lord Abbett & Co LLC, will serve as the adviser and will manage the short duration liquid credit portion of the portfolio. Apollo Credit Management LLC, will serve as the subadviser and will manage the private credit strategy. Approximately 35-65% of total assets will be in private credit. The management fee for the fund is still TBD in the draft prospectus, but will be disclosed in future updated versions before the fund is declared effective.
Portfolio managers with Lord Abbett include Steven F. Rocco, Eric P. Kang, and Andrew H. O’Brien. Portfolio managers with Apollo include James Vanek and Bret Leas.
Lord Abbett Flexible Income Fund will offer Class A and Class I Shares. The minimum initial investment is $2,500 for Class A Shares and $1,000,000 for Class I Shares. Class A Shares will have a sales load and a distribution/shareholder servicing fee , although the amounts are still TBD. Class I will not have a sales load or any distribution/servicing fee.
Lord Abbett and Apollo are both active in the retail alternatives market. Lord Abbett sponsors three interval funds, including the Lord Abbett Credit Opportunities Fund with $1.5 billion in net assets, the Lord Abbett Special Situations Income Fund, with $80.4 million, and the Lord Abbett Floating Rate High Income Fund. Apollo has two interval funds including the Apollo Diversified Real Estate Fund, with $5 billion in net assets, and the Apollo Diversified Credit Fund, with $731 million in net assets. Apollo also sponsors a perpetual life public non-traded BDC: the Apollo Debt Solutions BDC, which has $3.2 billion in net assets, and a perpetual life non-traded REIT called Apollo Realty Income Solutions, Inc, which has $458 million in total assets.
Jackson Real Assets Fund
Jackson Real Assets Fund filed a draft registration statement on December 15. This fund will invest in other third party managed private funds that invest in real assets including real estate, infrastructure, and natural capital such as agriculture, farm land, and timberland. Different sub advisers will handle different sleeves of the fund that will each focus on a unique type of real asset investment. The investment management fee was not yet specified in the draft registration statement.
Jackson Real Assets Fund is offering two shares classes: Class A and Class I. The minimum initial investment will be specified in future amendments to the draft registration statement. Class A Shares will have a 5.75% sales load and a 0.25% shareholder servicing fee, while Class I will not have any sales load or shareholder servicing fee.
Jackson National Asset Management, LLC will serve as the fund’s Adviser. Jackson is a subsidiary of Jackson Financial Inc, a Lansing Michigan based company that provides retirement products for industry professionals and their clients. Although they are relatively new to the interval fund market, Jackson is well known for offering variable and fixed index annuities. The Portfolio Managers for the Jackson Real Assets Team include William Harding, CFA, Sean Hynes, CFA, CAIA, Mark Pliska, CFA, and Kyle Ottwell, CFA, CAIA.
The Adviser also sponsors the Jackson Credit Opportunities Fund, an interval fund that went effective at the beginning of December.
Beacon Pointe Multi-Alternative Fund
Beacon Pointe Multi-Alternative Fund filed a draft registration statement on December 15. This fund will invest in a portfolio of other interval funds across a wide variety of asset classes and strategies. The Prospectus mentions Private Equity, Private Credit, Private Real Estate, Hedge Funds, Real Assets, and Short Duration Fixed Income as potential target sectors. It may also invest directly in underlying assets through co-investment arrangements.
Beacon Pointe’s new interval fund is offering Class I Shares and they not be subject to sales load or distribution fee. The annual management fee for the Fund will be 0.85% of net assets.
Beacon Pointe Advisors, LLC, a Newport, California based advisory firm, will serve as the Adviser. As of June 30, 2023, Beacon Pointe had approximately $30 billion in AUM. Michael Dow, Julien Frazzo, and Derek Newcomer, will serve as the Fund’s portfolio managers for the Fund.
Interval Fund and Alternative Investments Industry Links
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Hidden Leverage in Private Credit Funds: How To Assess What’s Hiding Under the Hood Alternative Fund Advisors
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