Retail alternative products including interval and tender offer funds have been gaining momentum in the market in recent years. In fact, Fuse Research Network projects interval fund assets to climb to $74.8 billion in assets by the end of this year. This is an increase of almost $11 billion from the end of 2022. The research company projects interval fund assets to hit $100 billion before 2026.

Interval and tender offer funds offer retail and alternative asset managers an opportunity to differentiate their product lineup and create new distribution opportunities. These funds are considered alternative strategies because they encompass a wide array of investments including: real estate, infrastructure, private credit, private equity and venture capital. These asset classes were previously offered in private vehicles for a limited number of investors with higher expense structures.

More asset managers have been focusing efforts on these alternative strategies because they may offer the opportunity to charge higher fees compared to traditional mutual fund or exchange-traded fund (ETF) strategies. However, alternative investments have not been immune from fee pressure including a general trend downward including several major fund managers reducing fees in recent years. Because different investment strategies require different levels of expertise, there are variations in fees between categories, and a fund manager that is able to demonstrate value to shareholders is typically able to command higher fees.

Before entering the interval fund or tender offer fund market, an asset manager should have a solid understanding of the competitive landscape. This whitepaper covers several case studies of managers who have modified fee structures or launched multiple funds in different niches to accommodate investor preferences. A key lesson is that the right investment strategy and market positioning may lead to successful fundraising even with higher fees.

To assist advisers considering the unlisted closed end fund wrapper for new products, Ultimus’ Nick Darsch, Managing Director, and Sean McLean, SVP Retail Alts, collaborated with Interval Fund Tracker’s Jacob Mohs, Managing Member, to examine predominant fee structure options and trends across various strategies in the interval fund and tender offer fund marketplace targeted to retail and high-net-worth investors.

In the whitepaper you will learn about the following:

• Understanding interval fund fee tables
• Types of base management fees
• Management fee levels
• Fee levels by strategy
• Incentive fees
• And more…

Click for access to the whitepaper.

17376431 9/12/2023