• Over the next few years FUSE expects interval funds to continue growing at a relatively rapid pace of 16% on average per year, topping $100 billion in total assets before 2026. Interval funds have become the far more popular unlisted closed-end vehicle over tender-offer funds due to their more predictable liquidity. We anticipate tender-offer fund assets will increase at an annual rate closer to 5%.
• The popularity of both structures stems from investors’ increased appetite for nontraditional and alternative assets. As SEC-registered products with periodic liquidity, unlisted closed-end funds offer a more advisor-friendly structure than true alternatives such as hedge funds.
• While alternative shops have dominated unlisted closed-end funds, many traditional asset managers have been entering the market. Just this year First Trust (multialternative) and Calamos (multi-strategy credit) launched interval funds. And interval funds from Eaton Vance and Fidelity, among others, await in registration. Over time, participation from more managers with ’40 Act experience should draw a greater number of affluent investors into interval funds and similar products.

Interval and Tender-Offer Fund AUM, 2021-2026P ($B)

Source: FUSE Research Network