Interval Funds

Nov 11. 05:00

Fundrise Registers The Fundrise Income Real Estate Fund

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Fundrise registered its third interval fund on 10/4/2021.

It's the first-ever interval fund electing to be taxed as a REIT, but not the first to leverage the interval fund structure to gain exposure to real estate securities.

The Fund's investment objective is to provide investors with attractive income and capital preservation, with Fundrise's familiar minimum initial investment of just $1000.

Like its flagship interval fund, the Fundrise Income Real Estate Fund expects to invest most of its assets into real estate securities; but the Fund has a more direct approach.

The Fund seeks to achieve its objective by acquiring six existing Fundrise REITs, according to a recent N-14 filing, with the goal of providing quarterly liquidity to shareholders without substantially altering the investment strategies of the to-be-acquired funds.

Additional stated benefits include reducing administrative costs, improving competition on deal flow, reducing risk through diversification, reducing leverage costs, and ultimately seeking to maximize returns to shareholders. According to the Fund's N-14, it expects to launch with at least $436m in acquired managed assets.

While this interval fund isn't as novel as Fundrise's Growth Tech Interval Fund, it certainly sets an example as to why an asset manager would convert an existing investment product (or in this case, products) to an interval fund.