Glossary · Structures

What is an interval fund?

An interval fund is a registered closed-end fund that offers to buy back a set share of its shares, between 5% and 25%, at regular intervals such as quarterly.

In practice

Interval funds operate under SEC Rule 23c-3 and usually offer new shares continuously at NAV, unlike traded closed-end funds. The repurchase price is the NAV struck shortly after the offer closes. Common holdings include private credit, real estate debt and other illiquid assets. They are often confused with open-end mutual funds, which allow daily redemptions, and with tender offer funds, whose repurchases are at the board’s discretion.

An example

Round numbers, not a real fund

Say an interval fund offers to repurchase 5% of its shares each quarter. If investors ask to sell more, the fund pays out in proportion.

Why it matters

It is a way for retail investors to hold less liquid assets, with limits on how much can leave at once.

In the news

Related terms

Evergreen fundAn evergreen fund has no fixed end date and lets investors join and redeem on a regular schedule, often quarterly, instead of locking money up for a decade.
BDCA BDC, or business development company, is a U.S. investment company that lends to or invests in private mid-sized businesses, and typically passes most of its income to shareholders.
Private creditPrivate credit is lending by investment firms rather than banks, directly to companies, with the loans held in funds rather than traded on markets.
Tender offerA tender offer is a bid made directly to holders to buy their shares or fund interests at a stated price within a set time window.
NAVNet asset value, or NAV, is a fund’s assets minus its liabilities. In private funds it is usually reported quarterly and rests on the manager’s valuations.

The terms, in the news each morning.

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