Non-traded REIT and BDC sponsors are entering the interval fund space en masse. This was a key trend in 2016 and it is continuing in 2017. Here is a partial list of Non-traded REIT and BDC Sponsors with interval funds in various stages of launch.
Union Square Capital Partners Registered USQ Core Real Estate Fund, a new interval fund. USQ Core Real Estate Interval Fund According to the Prospectus: The Fund seeks to provide investors with returns equal to or greater than the NCREIF Fund Index – Open End Diversified Core Equity over an entire market cycle; however, it cannot […]
Four interval funds went effective on the first quarter of 2017:
| Fund Name | Effective Date | Investment Strategy |
|---|---|---|
| Griffin Institutional Access Global Credit Fund | 3/30/2017 | Credit |
| FS ENERGY TOTAL RETURN FUND | 3/8/2017 | Credit& Equity |
| PIMCO Flexible Credit Income Fund | 2/9/2017 | Credit |
| Nexpoint Opportunistic Credit Fund | 1/13/2017 | Credit |
For a complete listing of new fund launches, see Public Listing Update.
Griffin Capital and FS Investments will both be presenting on different panels at the ADISA 2017 Spring Conference. Topics include “Between Theory & Operations: A Practical Discussion of the Formation and Operation of Interval Funds” and “Running the Gauntlet: Interval Funds and the Due Diligence Process”. Highland Capital, an affiliate of interval fund sponsor Nexpoint Capital will also be at the conference.
What we’ve been reading lately:
The New CEFs on the Block (Morningstar)
US asset managers embrace interval funds (Financial Times)
Interval Funds – at the Intersection of Liquidity, Transparency, and Valuation (DLA Piper)
Converting a BDC to an Interval Fund (Interval Fund Tracker)
Interval Funds: Year in Review（Interval Fund Tracker)
Interval Funds Garnering Advisors’ Attention (Financial Advisor)
The Trendiest Investment on Wall Street …That Nobody Knows About (The Wall Street Journal)
With Financial Times coverage of closed end interval funds, and the recent growth in credit focused closed end funds, its a good time to compare the business development company structure to the closed end fund structure(including interval funds). Both provide investors with protections under the 1940 Act, and BDCs are also technically a type of closed end fund, but BDCs have several key differences in terms of fees, regulatory and filing requirements, and investment restrictions. These differences are important for investors, asset managers, and those involved in fund distribution.
Here are interactive tables comparing BDCs and Closed End Interval Fund: