California based VII PEAKS CO-OPTIVIST INCOME BDC II, INC. , has begun the process of converting from a business development company(BDC) to a closed end interval fund.
The universe of closed end interval funds continues to grow, with a diverse group of Sponsors launching new funds. To track funds in registration, and new funds declared effective, see Public Listings Update under Tools and Data.
Several funds have been declared effective and begun raising capital in 2016. For example, Nexpoint Real Estate Strategies Fund was declared Effective by the SEC on July 1, 2016. The fund’s adviser is NexPoint Advisors, L.P., headquartered in Dallas, TX, a SEC-registered investment advisor, and an affiliate of Highland Capital Management. NexPoint/Highland is a highly experienced group in the alternative investments space. It serves as an external adviser to numerous credit and real estate funds, including publicly traded and private funds. With at least 6 closed-end fund interval funds in registration NexPoint/Highland is clearly making a large bet on the structure’s ability to deliver alternative strategies to a wide variety of investors.
Interval Fund Tracker keeps tabs on the best industry research covering interval funds. See the Research section for additional resources and ongoing updates.
Here are the Top 5 Interval Fund Whitepapers in the industry today.
Best balanced review of the benefits and challenges of interval funds and other continuously offered closed-end funds. It also puts interval in their proper context in the broader fund universe. This is a must read for any Sponsor that is considering launching a fund, or any BD/RIA that plans to offer interval funds. A few key quotes:
Finally, with much of the negative press associated with non-traded REITS, and an unwillingness among many advisors to invest in business development companies (BDCs), an interval or tender offer closed-end fund structure might be a better option for managers seeking to introduce new and less-liquid real estate or energy investment strategies…
…Sponsors of interval funds need to ensure their national account, sales, marketing and product teams are working symbiotically to educate and engage advisors at the right time during their decision-making process. This includes both in-person and digital engagement. Naturally, some broker/dealer platforms are more receptive than others. Several asset managers have found a receptive home for their interval funds among small- to mid-size broker/dealers. In those cases, the firm’s National Accounts team diligently identified the fund needs of the platform, and worked closely with the platform gatekeepers to position the fund. In addition, they selected several members of their internal/external sales team to actively support platform advisors…
Interval funds typically operate as a fund of funds, offering investors exposure to a diversified portfolio of alternative investments through one vehicle. Many major alternative investment managers, REIT and BDC sponsors have registered interval funds in recent months. A variety of regulatory and market pressures are driving the growth of interval funds, but lack of data makes it difficult for investors to evaluate choices. The purpose of Interval Fund Tracker is to increase transparency of the interval fund universe.