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Interval Fund Market - 2Q 2018 Update

by Jacob Mohs

Interval fund AUM growth continues apace. Total interval fund net assets equaled $23.3 billion as of the most recent public filings available at the end of the second quarter, up 48% compared to the prior year, and 9% compared to the prior quarter.

Filings released subsequent to the end of the quarter increased the total net assets to over $24.9 billion.

Interval fund assets remain highly concentrated. Although there are over 50 active interval funds, the five largest alone account for approximately two-thirds of total net assets. The following table shows the ten largest funds by net assets based on data available as of July 13, 2018:

Fund

Reporting Period

Net Assets MRQ

% of total

Stone Ridge Trust II (Stone Ridge Reinsurance Risk Premium Interval Fund)

April 30

$6.06 billion

24.9%

Stone Ridge Trust V

February 28

$3.17 billion

13.0%

ACAP Strategic Fund

March 21

$2.69 billion

11.0%

Versus Cap Multi-Manager Real Estate Income Fund

March 31

$2.18 billion

8.8%

Griffin Institutional Access RE Fund

March 31

$2.14 billion

9.0%

Stone Ridge Trust III

April 30

$1.55 billion

6.4%

Total Income+ Real Estate Fund

March 31

$931.0 million

3.8%

Pioneer ILS Interval Fund

April 30

$810.2 million

3.0%

Versus Capital Real Assets Fund LLC

March 31

$802.7 million

3.3%

Invesco Senior Loan Fund

February 28

$740.2 million

1.7%

Fastest Growing Interval Funds

Twenty-nine active interval funds reported net asset growth in the most recent quarter. Fourteen reported a decrease, and seven reported no change. The five fastest growing interval funds alone accounted for over 70% of the quarterly increase in net assets for the entire niche. Astute readers will notice substantial overlap between the lists of largest and fastest growing interval funds. The following list shows the ten fastest growing interval funds, based on net asset growth in the most recent reported quarter:

Fund

Date of Reporting Period

Net Assets Increase MRQ

Stone Ridge Trust II (Stone Ridge Reinsurance Risk Premium Interval Fund)

April 30

$1.04 billion

ACAP Strategic Fund

March 31

$275.3 million

Stone Ridge Trust V

February 28

$266.9 million

Versus Capital Real Assets Fund LLC

March 31

$238.1 million

Versus Cap Multi-Manager Real Estate Income Fund

March 31

$188.6 million

Weiss Strategic Interval Fund

March 31

$175.6 million

PIMCO Flexible Credit Income Fund

March 31

$147.1 million

Pioneer ILS Interval Fund

April 30

$133.8 million

Griffin Institutional Access RE Fund

March 31

$120.4 million

Total Income+ Real Estate Fund

March 31

$65.5 million

Fee structures are becoming more standardized, and several service providers have become critical to the interval fund ecosystem.

Pipeline of new funds

Growth of the interval fund pipeline accelerated in the second quarter. Pace of fund registrations and launches is a strong leading indicator of future sector growth.

New registrations

Seven interval funds filed initial registration statements with the SEC in the second quarter.

Fund

Registration Date

Strategy

Oppenheimer ILS Interval Fund

2018-06-13

Insurance-linked securities

American Beacon Apollo Total Return Fund

2018-06-11

Other

Hatteras Reinsurance Fund

2018-05-15

Insurance-linked securities

City National Rochdale Strategic Credit Fund

2018-05-14

Credit

FS Multi-Alternative Income Fund

2018-04-17

Other

Variant Alternative Income Fund

2018-04-13

Credit

Savyon Trust Group, Inc.

2018-04-10

Credit

Credit strategies, broadly defined, continue to be the most popular among fund managers getting ready to launch an interval fund.

New funds declared effective

The SEC declared effective five interval fund registrations statements in the second quarter. Additionally, one interval fund offering shares via a private offering started raising capital in the quarter. This is an acceleration in pace compared to prior quarters.

The public interval fund offerings declared effective in the second quarter are shown in the following table:

Fund Name

Effective Date

Strategy

Maximum Offering Proceeds

American Beacon Sound Point Enhanced Income Fund

2018-06-29

Credit

$250,000,000

NexPoint Latin American Opportunities Fund

2018-06-25

Credit & Equity

$100,000,000

OFI Carlyle Global Private Credit Fund

2018-05-31

Credit

$1,000,000,000

NexPoint Healthcare Opportunities Fund

2018-05-10

Credit & Equity

$100,000,000

Destra International & Event Driven Credit Fund

2018-05-09

Credit

$126,000,000

Note that the Flat Rock Opportunity Fund also launched during the first week of the third quarter. It was declared effective on July 2.

Interval fund research white papers

Several service providers and fund sponsors released several notable research pieces in the second quarter:

For a comprehensive collection of whitepapers, see the resources at this link.  

 Note: this was originally posted by the author on Interval Fund Tracker.

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Filed Under: Interval Funds