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Interval and Tender Offer funds provide investors an opportunity to gain exposure to alternative investment strategies that have been traditionally offered through private fund vehicles. Many of these strategies involve investing in assets that are considered illiquid. If you are a fund sponsor who is considering launching an Interval or Tender Offer fund, understanding how to establish a valuation policy for illiquid assets will be a key area of focus for you.

In our recent whitepaper collaboration with XA Investments, “Launching an Interval Fund – Clear-eyed Approach to Successful Launch,” we explored various launch strategies for fund managers to efficiently bring products to market. It is becoming more and more critical that new funds reach scale quickly so that they can meet distribution platform requirements and cover elevated expenses in the interval or tender offer fund wrapper (in comparison to traditional alts or mutual funds).

Over the past five years, the interval fund market has experienced growth, as the structure has attracted both managers and investors by expanding access to illiquid alternative investments in a registered fund structure.

Today there are about 6,000 companies that trade publicly on the NYSE and Nasdaq.

In fact, according to Cerulli’s May 2020 monthly trends report, the interval fund space has seen several brand-name managers roll out interval funds in recent years, their numbers growing from 11 funds in 2013 to 55 in 2019¹.

Many investment managers and asset owners are struggling with a new reality and working to restructure portfolios, all while trying to shrug off a 10-year bull market euphoria-induced hangover.