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B. G., Opalesque Geneva: Gapstow, a New York-based investment adviser that focuses on alternative credit, has published an annual review of alternative credit interval funds (ACIFs), a growing universe that includes 40 products with $29bn in AuM.
What is an interval fund?
Interval funds are a type of registered investment company that offers to repurchase a limited number of its own shares on only a periodic basis (i.e., intervals), unlike a traditional mutual fund that offers unlimited redemptions daily. As a result, interval funds are a hybrid between traditional mutual funds and private funds.
Alternative credit managers have been attracted to the interval fund format because its restrictive redemption terms are better suited to holding thinly traded investments (e.g., private loans, distressed debt, or structured credit) than are the terms of traditional mutual funds.
Gapstow defines an "Alternative Credit Interval Fund" as an interval fund whose primary investment strategy includes all debt-based investments whose yield and/or expected return is higher than that of investment-grade fixed-income securities.
Universe
At the end of 2022, 40 ACIFs were open and had a total net AuM of $29bn. The ten largest ACIFs account for 85% of all AUM. The biggest of these funds are managed by Cliffwater, followed by Pimco, CION, Variant and Stone Ridge.
The funds are classif...................... To view our full article Click here
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