Using a Little-Known Type of Fund for Private-Company Exposure

The Wall Street Journal had an article a while back discussing a type of situation where a financial adviser found interval funds to be a great fit for a client. The interval fund used here is SharesPost 100 Fund (PRIVX), but a similar process would likely apply for many different funds.

According to the adviser in the article:
“What’s interesting to me about closed-end interval funds is that clients get access to these [private] companies, but they have the transparency and regulatory benefits of the mutual-fund structure,”

Vertical Capital Income Fund Announces 2016Q2 Results

Vertical Capital Income Fund has announced 2016Q2 results:
….The Fund produced a total return of 2.42% for Q2 2016—or -2.20% including sales load. The Fund’s total assets under management exceed $181 million.

“Since inception, the Fund has produced a total return of 10.12%—or 9.01% including a 4.50% sales load—compared to a total return of 3.07% for the Barclays Capital Mortgage Backed Securities Index, which reflects the performance of investment grade fixed-rate mortgage-backed pass-through securities,” said Robert J. Chapman, Chairman of the Fund’s board of directors.

Newly Launched Interval Funds

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.

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