Report

The Next Stage of Growth for Unlisted Closed-End Funds

The market for unlisted closed-end funds is beginning to show signs of maturation, but this set of fund structures continues to exhibit the potential for continued growth in assets.

Historically, alternative strategies and asset classes have been exclusively available to institutions and high-net-worth investors. Since traditional mass affluent structures—open-end mutual funds and ETFs—have liquidity requirements, they are not ideal packages for alternatives and illiquid asset classes. However, the unlisted closed-end structure – primarily interval and tender-offer funds – allows manufacturers to manage the liquidity challenges of alternatives and illiquid securities and access the mass affluent market.

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The report provides a market update reflecting on data through the first half of 2022, as well as insights into top investment categories, strategies, pricing and top asset managers.

Key findings from the analysis:

Unlisted CEFs have maintained their momentum even after several years of significant growth, surpassing $100 billion in AUM in 2022, an all-time record for the category
New product development continues, but the pace of new fund launches may have slowed slightly since last year, suggesting that fund sponsors may have turned their attention to reaching scale with their current product lineup
There is no shortage of successful new product launches, with at least 10 new funds reaching $300 million or more in their initial asset-raise
Interval funds have pulled ahead of tender-offer funds in terms of both assets and number of funds due to a combination of distribution strategies driving investors into those funds and the attractiveness of the asset classes/investment strategies in the current market environment
…and more.

The Next Stage of Growth for Unlisted Closed-End Funds

Industry leading expertise and experience in closed-end fund structures

UMB Fund Services is a leader in unlisted closed-end fund servicing, offering a unique servicing technology and a start-up platform both designed specifically for unlisted CEFs. We offer a broad array of services for mutual funds and alternative investments, including turnkey solutions, to help clients bring new products to market and position themselves for future growth.

At UMB, we excel at adapting in an ever-changing market environment. This agility positions our operation to meet client needs now and in the future.

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