CION Featured in PDI – Interval Funds: The Cash-Back Option

September 12, 2017

Interval funds – hybrids between hedge funds and closed-end debt funds which repurchase investor shares at regular intervals – are in vogue in the private credit world. The US Securities and Exchange Commission has declared effective 38 active interval funds, which have amassed $16.12 billion in net assets between them as of 8 August, according to data collected by Interval Fund Tracker. The main difference between these hybrid funds and a typical debt fund is that the interval fund manager periodically buys back investors’ shares, which cannot be traded on a secondary market. Interval fund managers must allow investors the option to purchase 5-20 percent of the fund’s equity at select intervals, usually quarterly or semi-annually, and they are required by law to price these shares at net asset value allowing investors more liquidity than your run-of-the mill long-term debt fund.

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