Unlisted Closed-End Funds: Growth Persists Despite Pandemic
November 23, 2021 | UMB Fund Services
The unlisted closed-end fund structure—primarily interval funds and tender-offer funds—allows asset managers to access the mass affluent market while addressing the liquidity challenges of alternatives and illiquid securities. Nearly 80 products have been launched during the last four years and another 47 sit in registration. UMB partnered with FUSE Research Network to publish a market update as of the second quarter of 2021, with insights into top investment categories, strategies, pricing and top asset managers.
The future of the unlisted closed-end fund space continues to look bright, with strong asset growth expected. Since 2017, annual growth has been in the double-digits. Asset growth in the first half of 2021 outpaced that of active exchange traded funds (ETFs) and mutual funds. As of June 2021, 138 unlisted closed-end funds were available for purchase by investors regardless of accreditation status, with total assets under management (AUM) reaching nearly $85 billion.
The data covered in UMB’s report includes interval funds and tender-offer funds, which are continuously offered registered closed-end funds that provide periodic liquidity to investors. They are primarily differentiated by the structure of repurchase offers. These structures allow asset managers to package complex strategies and access low liquidity asset classes, which cannot be handled by traditional packages.
