XA Investments Non-Listed Closed-End Funds December 2024 Market Update

/EIN News/ -- CHICAGO, Dec. 23, 2024 (GLOBE NEWSWIRE) -- XA Investments LLC (“XAI”), an alternative investment management and consulting firm, tracks developments in the non-listed closed-end funds (CEF) market on a monthly and quarterly basis. The non-listed closed-end funds market includes all interval and tender offer funds.

“As 2024 draws to a close, we’ve been pleased to see that the pace of new N-2 filings with the SEC for new interval and tender offer funds is accelerating. In the month of November alone, there were 5 new filings, with 15 total new filings since the end of the third quarter,” stated Kimberly Flynn, the President of XAI. “The fourth quarter of 2024 is far ahead in the number of filings from the fourth quarter of 2023, which only had nine new funds filed. This is already a remarkable 66% increase from last year, with a month left in the quarter. Based on these robust findings, XAI expects the first half of 2025 to be an evergreen product boom with so many new alternative funds in the SEC registration process now.” she added.

XAI’s December market update report showed that as of November 30, 2024, there were 247 total interval and tender offer funds with combined $171 billion in net assets and $204 billion in total managed assets, inclusive of leverage. The 122 interval funds make up 60% of the total managed assets at $121.8 billion and the 125 tender offer funds make up the other 40% with $81.9 billion in total managed assets. Year-to-date, the market gained 35 funds and marketwide net assets increased $31 billion.

In total, there are 142 unique sponsors in the interval and tender offer fund space. The market has continued to diversify with new fund sponsors that entered the market in late 2024, including Rockefeller Asset Management, Booster Asset Management, and Gladstone Management Corporation. There are a total of 54 funds currently in the SEC registration process. The market will further expand with the anticipated launch of several new funds currently in the SEC registration process. The sponsors of the most recently filed funds include Columbia Threadneedle, Sovereign Financial Group, Segall Bryant & Hamill, Select Equity Group, and Coatue Management. This group includes several high-profile alternative investment managers.

One interesting N-2 filing, Corient Registered Alternatives Fund, filed with the SEC on November 19, 2024. The Corient tender offer fund is the first interval / tender offer fund by Segall Bryant & Hamill, a registered investment adviser with over $185 billion in AUM. XAI observes more RIAs building proprietary alt products and expects the trend to continue in 2025. The Corient tender offer fund engaged Nuveen affiliated Churchill Asset Management, an alternative manager overseeing $50 billion in AUM, to serve as sub-adviser. The fund is planning to invest in a range of different alternatives including direct private equity, co-investments, BDCs, REITs and private funds.

The XA Investments research team forecasts combined interval fund / tender offer fund assets to reach $220bn and 275+ funds by year-end in 2025. The interval fund segment of the market growth rate (23% CAGR) exceeds that of the slower growing tender offer fund segment (16% CAGR). With more long duration alternatives such as private equity and infrastructure launching, we would expect to see the growth rate for tender offer funds accelerate. In 2025, private credit is expected to continue to dominate capital raising and new fund formations. Most private credit funds have been organized as daily NAV interval funds and can be purchased electronically through the NSCC/FundSERV platform making it easier for advisors to implement interval funds into client portfolios. We expect the private equity and hedge fund categories of the interval / tender offer fund market to follow close behind private credit in terms of growth and investor adoption next year.

For more information on the interval fund market and to read our monthly reports and full quarterly reports on non-listed CEFs, please visit the CEF Market research page linked here and click ‘Subscribe’ for access to XAI online research portal and pricing information. In addition, please contact info@xainvestments.com or 888-903-3358 with questions.

About XA Investments
XA Investments LLC is a Chicago-based investment advisory firm founded by XMS Capital Partners in 2016. XAI serves as the investment adviser for two listed closed-end funds and an interval closed-end fund. The listed closed-end funds, the XAI Octagon Floating Rate & Alternative Income Trust (NYSE: XFLT) and Madison Covered Call & Equity Strategy Fund (NYSE: MCN) both trade on the New York Stock Exchange. The interval closed-end fund, Octagon XAI CLO Income Fund (OCTIX), is newly launched. In addition to investment advisory services, the firm also provides investment fund structuring and consulting services focused on registered closed-end funds to meet institutional client needs. XAI offers custom product build and consulting services, including product development and market research, sales, marketing and fund management. XAI believes that the investing public can benefit from new vehicles to access a broad range of alternative investment strategies and managers. XAI provides individual investors with access to institutional-caliber alternative managers. For more information, please visit www.xainvestments.com.

Sources: XA Investments; CEFData.com; SEC Filings.

Notes: All information as of 11/30/2024 unless otherwise noted. Total managed assets is inclusive of leverage. The non-listed CEF market is subject to lags in reporting and limited data availability. Data such as asset levels, net flows, and performance are delayed up to 90 days after quarter-end and are not available for all funds. All data in the report is the most current available. Please contact our team if you have any questions about the non-listed CEF marketplace

Contact

Kimberly Flynn, President
XA Investments LLC
Phone: 888-903-3358
Email: KFlynn@xainvestments.com
www.xainvestments.com