• Board oversight is back under the microscope—this time regarding oversight of nontraditional vehicles. Interval fund assets grew to nearly $64 billion in 2022. The launch of 10 new interval funds contributed to this growth, adding over $1.1 billion in AUM and bringing the total number of interval funds offered to 75 with an additional 15 funds in registration as of year-end 2022.
• As interval funds enjoy continued growth, traditional asset managers with mutual fund and ETF experience are looking to leverage the success of this emerging vehicle. With the funds come additional challenges for boards due to hybrid operating attributes shared between open-end and closed-end funds. The approach to oversight of these funds has varied among firms, but thus far, the majority of firms are not making changes to their existing board structure.
• Of the 36 fund complexes that currently offer both interval funds and traditional open-end funds, only three have opted to create a distinct board to oversee their interval fund offerings, while three other complexes have opted to use an existing board that already oversees their listed closed-end funds (CEFs). A majority of complexes (30) simply use a preexisting board that oversees both open-end funds, interval funds, and in some cases, closed-end funds as well.

Board Oversight by Firm Structure