Benjamin Cole writes about 2025 kicking off with a slew of interval fund registration filings, including some from major financial institutions such as J.P. Morgan, Capital Group, KKR, and Oaktree. Industry experts estimate another 50 to 100 new interval funds will hit the market, raising tens of billions of dollars. This estimation supports the land rush that 2025 has become for the interval fund market, expanding U.S. and global private equity efforts to farther reaches.
As investors seek alternatives to conventional equities and bonds, along with a volatile market, the demand for alternative assets continues to increase. Interval funds are a potential solution to the demand, offering a blend of liquidity and access to private markets, making them appealing to a wider range of investors.
The advantages of interval funds are gaining momentum in 2025 according to Kimberly Flynn, President of XA Investments. “We expect interval funds to continue to grow in 2025 and that sustained growth throughout the decade is probable,” says Flynn. “At the end of 2024, there were 53 interval funds in the SEC registration process that are expected to launch within the next six to eight months, along with 257 funds currently in the market.”
As interval funds become more accessible to a variety of investors, there is an ongoing discussion within the financial management industry concerning the issue of “fee compression”. However, with the rise of artificial intelligence within the industry, it may soon reduce administrative and compliance duties to a minimum. “As the industry shifts to adjust to new emerging competitors and the use of artificial intelligence, we will likely see average management fees come down,” says Flynn.
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