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Defining Interval and Tender Offer Funds

These funds are a type of continuously offered closed-end fund that frequently price shares at net asset value (NAV) but are not listed on an exchange. They are regulated under the Investment Company Act of 1940 (the ‘40 Act) and are registered with the Securities and Exchange Commission (SEC). This structure combines flexible underlying investment options with the investor protections of SEC registration, such as transparency through frequent public filings, an independent board, and audited financial statements.

Liquidity

Interval funds are required to make periodic repurchase offers at NAV of no less than 5% and up to 25% of shares outstanding.

Tender offer funds periodically offer to repurchase shares on a discretionary basis.

Underlying Investments

Open-end mutual funds are generally limited to holding no more than 15% of assets in illiquid investments. Interval and tender offer funds are not subject to this limitation. That is why these fund structures are attractive for a range of private market strategies.

Eligible Investors

Unlike many other private market structures, these funds have no minimum financial suitability requirements, such as being an Accredited Investor or Qualified Purchaser. Individual funds may set their own requirements.

Comparing Interval and Tender Offer Funds

  INTERVAL FUNDS TENDER OFFER FUNDS
Structure Closed-end Fund Closed-end Fund
Exchange Listed No No
NAV Calculation Weekly/Daily Varies
Redemption Obligation (i.e., liquidity) Mandatory Optional
Redemption Frequency Every 3, 6, or 12 Months Board Discretion
Redemption Threshold 5 – 25% of Shares Outstanding Board Discretion
Liquidity Requirement During Redemption Period Only None
Eligible Investors All – No Requirement All – No Requirement
Minimum Investment (varies by fund) $1,000 – $10,000 $1,000 – $50,000
Tax Reporting 1099 1099
  INTERVAL FUNDS
Structure Closed-end Fund
Exchange Listed No
NAV Calculation Weekly/Daily
Redemption Obligation (i.e., liquidity) Mandatory
Redemption Frequency Every 3, 6, or 12 Months
Redemption Threshold 5 – 25% of Shares Outstanding
Liquidity Requirement During Redemption Period Only
Eligible Investors All – No Requirement
Minimum Investment (varies by fund) $1,000 – $10,000
Tax Reporting 1099
  TENDER OFFER FUNDS
Structure Closed-end Fund
Exchange Listed No
NAV Calculation Varies
Redemption Obligation (i.e., liquidity) Optional
Redemption Frequency Board Discretion
Redemption Threshold Board Discretion
Liquidity Requirement None
Eligible Investors All – No Requirement
Minimum Investment (varies by fund) $1,000 – $50,000
Tax Reporting 1099

BENEFITS

icon-open-hand-with-coinLow investment minimums

icon-clipboard-with-checksNo minimum financial suitability requirements

icon-accessibilityAccess to private market strategies

icon-tax-reporting-v021099 tax reporting

icon-less-volatilitySome liquidity provisions

icon-investor-protections-v02SEC and ’40 Act investor protections

KEY RISK CONSIDERATIONS

Key risk considerations may include, but are not limited to, the following:

icon-liquidityLiquidity: Interval and tender offer funds have limited liquidity, therefore, investors may not receive the amount requested due to oversubscribed redemptions.

icon-feesFees: Interval and tender offer fund fees are generally higher than those associated with traditional investments.

icon-calendarCash drag: Private market investments may take weeks or months to move from identification to acquisition, which can lead to a reduction in fund performance.

icon-strategyUnderlying assets and strategy: Each underlying asset and strategy will exhibit their own inherent risks.

icon-long-term-investmentLong-term investments: Private market strategies should be considered long-term investments.

Please contact your financial professional or a fund manager to learn more.

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IMPORTANT INFORMATION

This material is provided for informational purposes only and is not intended as, and may not be relied on in any manner as legal, tax or investment advice, a recommendation, or as an offer to sell, a solicitation of an offer to purchase or a recommendation of any interest in any fund or security offered by Institutional Capital Network, Inc., or its affiliates (together “iCapital”).

Past performance is not indicative of future results. Alternative investments are complex, speculative investment vehicles and are not suitable for all investors. An investment in an alternative investment entails a high degree of risk and no assurance can be given that any alternative investment fund’s investment objectives will be achieved or that investors will receive a return of their capital. The information contained herein is subject to change and is also incomplete. This industry information and its importance is an opinion only and should not be relied upon as the only important information available. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed, and iCapital assumes no liability for the information provided.

Products offered by iCapital are typically private placements that are sold only to qualified clients of iCapital through transactions that are exempt from registration under the Securities Act of 1933 pursuant to Rule 506(b) of Regulation D promulgated thereunder (“Private Placements”). An investment in any product issued pursuant to a Private Placement, such as the funds described, entails a high degree of risk and no assurance can be given that any alternative investment fund’s investment objectives will be achieved or that investors will receive a return of their capital. Further, such investments are not subject to the same levels of regulatory scrutiny as publicly listed investments, and as a result, investors may have access to significantly less information than they can access with respect to publicly listed investments. Prospective investors should also note that investments in the products described involve long lockups and do not provide investors with liquidity.

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