Interval Funds

Jun 30. 14:03

The Month in Interval Funds: June 2021

The Month in Interval Funds: June 2021 featured image. Sunglasses on a beach. Photo by Sai Kiran Anagani on Unsplash.



· Two new interval funds were registered in the month of June, and two additional funds became effective.

· Investment strategies included growth stocks in tech, and credit and asset-backed securities.

· Both registrations came from incumbent managers, though one had only operated private funds previously.

In June, the U.S. economy showed optimism as it worked through the growing pains of a massive economic reopening. Crypto, facing regulatory challenges globally, was particularly volatile. 700,000 jobs were added amidst a labor shortage, and unemployment dropped to 5.7%, its lowest since March 2020 when the pandemic kicked off here in the U.S. Fixed income markets finished a strong quarter as the Fed raised inflation expectations and shortened its timeline for raising rates. The S&P returned 1.99%, DJIA gained 1.82%, and Nasdaq grew 6.07%. Consumer confidence jumped 12.2% to 98.1 – the largest single-month increase since 2011 – and active coronavirus cases, as well as daily Covid-19 tests, both sat at record highs.

Interval Funds remained on track to mark 2021 as the strongest-ever year for new interval fund registrations, with two new funds filed in June, coming off another 3 in May. Two registered funds also became effective this month. We bumped our projected 2021 filing number from 25 to 26 – nearly 24% above 2018, the current record-holder – and there are now 101 interval funds either active or in stages of registration.

Crib notes for new funds filed in June:

· Fundrise Growth Tech Interval Fund: In a seeming departure from Fundrise, LLC's real estate focus, they registered an interval fund that focuses on buying ownership in late-stage, domestic, venture-backed growth companies across the broader technology sector, all of which are pre-IPO. Fundrise calls the potential upside of buying pre-IPO stocks vs. those of publicly traded companies "private-public valuation arbitrage," providing retail investors with a new level of access to these previously exclusive investment opportunities. The fund is launching a single share class with a tentative minimum initial investment of $1000. Read more.

· Monachil Credit Income Fund: This fund, which will be managed by Monachil Capital Partners LP, is focused on a broad range of credit instruments and asset-backed securities, seeking to offer investors returns with low correlation to public equity and fixed income markets. It was reorganized from a private fund, Wolf River INV LLC, and represents the manager's first foray into interval funds. The fund will offer institutional shares at launch with a minimum initial investment of $1m, and is seeking SEC approval to offer Class A shares with a minimum initial investment of $2500. Read more.


· Interval Fund Essentials: Taxes

· Deregistering Interval Funds

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