Interval Funds Monthly- January 2024

January 31, 2024

Two new interval funds filed registration statements in January 2024: Catalyst Strategic Income Opportunities Fund, and Fidelity Floating Rate Opportunities Fund. Additionally, the Meketa Infrastructure Fund, which filed an initial registration statement in September 2023, was declared effective by the SEC in January.

Catalyst Strategic Income Opportunities Fund

Catalyst Strategic Income Opportunities Fund filed a draft registration statement on January 17, 2024. However, they filed a delaying amendment on January 31, so there may be a delay before it is launched. Once launched, this interval fund fund will invest in asset backed fixed income securities, such as non-agency residential mortgage-backed securities and commercial mortgage backed-securities. Catalyst will focus on non-agency RMBS. It may also invest in fixed income securities backed by automobiles, aircraft, credit card receivables, and businesses.

The draft registration statement lists only one share class, which will be sold at NAV, without any sales load. The minimum investment is $2,000. . There will be a shareholder servicing fee of 0.25%. The management fee will be 1.50% of net assets. Under an expense limitation agreement, the adviser will waive its management fee or pay to absorb operating expenses to keep total expenses until at least 2025.

Catalyst Capital Advisors LLC, will serve as the fund’s adviser, and Perini Capital, LLC will serve as sub-adviser. The adviser is under common control with AlphaCentric Advisors LLC and Rational Advisors, Inc. AlphaCentric Advisors was the sponsor of the AlphaCentric Prime Meridian Income Fund, an interval fund that launched in 2019, and liquidated in August 2023. The adviser is a mutual fund manager that has approximately $7.1 billion in AUM across over 20 different funds. The subadviser has approximately $100 million in AUM according to its latest form ADV.

Fidelity Floating Rate Opportunities Fund

Fidelity Floating Rate Opportunities Fund filed a draft registration statement on January 5. As the name implies, the fund will seek a high level of current income by investing in floating rate credit investments including, loans, notes, bonds, debt tranches of CLOs along with private credit investments.

Fidelity’s new interval fund will offer four share classes: A, C, I, and L. The draft registration statement does not yet indicate a minimum initial investment for any of the share classes. Class A will have a sales load of up to 2.75%, and Class L will have a sales load of up to 4.25% Classes C and I will not have any sales load. Classes A, C, and L will have distribution/shareholder servicing fees of up to 0.25%, 1.0%, and 0.50%, respectively. Class I will not have any sales load. The draft registration statement also indicates the fund will have an expense limitation agreement, although details are not specified yet. The management fee will also be disclosed in a future filing.

Fidelity Diversifying Solutions LLC will serve as the fund’s adviser. Fidelity’s parent company has $4.4 trillion in discretionary AUM and $11.5 trillion in assets under administration. They should have a major distribution advantage since there already 43 million individual investors that use Fidelity across 200 investor centers and 13 regional sites around the world. . Fidelity also sponsors Fidelity Multi-Strategy Credit Fund in May 2023.

Other Alternative Fund Registrations

Fairway Private Markets Fund filed a draft registration statement for a new tender offer fund on January 31. This fund is focused on private equity, venture capital and private debt. The fund will have two share classes: Class I and Class A. The minimum initial investment for Class I will be $50,000, and the minimum initial investment for Class A will be $25,000. Fairway also sponsors another tender offer fund: the Fairway Private Equity & Venture Capital Opportunities Fund.

Franklin Lexington Private Markets Fund filed a draft registration statement for a new tender offer fund focused on private equity. This fund will have three share classes: Class S, Class D, and Class I. The minimum initial investment for Class S and D will be $25,000 and the minimum initial investment for Class I will be $1 million. This fund is the latest sign of Franklin Templeton’s major strategic shift into alternative investments.

Morgan Stanley filed an updated registration statement for a new Perpetual life NT REIT called North Haven Net REIT on January 11. This fund will invest in a diversified portfolio of high quality real estate primarily focused on long term pleased and net leased properties.

Antares Strategic Credit Fund filed an an initial form N-54A for a new private, perpetual-life BDC on January 19. Antares Capital Credit Advisers LLC will serve as adviser for this new fund.

Overland Advantage Fund filed an initial Form N-54a for a new private BDC on January 12. The Adviser is a controlled affiliate of Centerbridge, will be the adviser. Overland will have use a drawdown model with a five year commitment. After that, it is expected to list on an exchange.

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