September 13, 2017
The bustling marketplace for non-traded alts funds – upended with shifting regulations, sales patterns, more entrants, and a product development surge – is tilting its center of gravity toward a new model. Interval funds are all the rage in product building efforts by both traditional and alts managers, especially around investments typically not available to financial advisors, but no one has yet carved out an edge.
As the markets for non-traded real estate investment trust (REIT) and business development company (BDC) strategies have undergone massive changes, mostly due to regulatory pressure on longstanding sales models, managers have been plowing into the market with non-listed closed-end alts funds. But the balance in that segment is moving from costlier “tender offer” strategies, which aim for wealthier investors and often charge performance fees, to interval funds that are designed to be cheaper and target a wider audience, according to a new study from UMB Fund Services and FUSE Research Network…
