CHICAGO, April 23, 2025 (GLOBE NEWSWIRE) — XA Investments LLC (“XAI”), an alternative investment management and consulting firm, announced today that its Non-Listed Closed-End Funds First Quarter 2025 Market Update shows a strong start to 2025 in both fund launches and asset gathering. The market update is a comprehensive research report detailing current market trends and industry highlights. The non-listed closed-end fund (CEF) market includes all interval and tender offer funds. The report introduces the XAI Interval Fund Index™ (INTVL), analyzes recent developments in co-investment relief, and reviews 2024 net flows across the market.
“The non-listed CEF market continues to grow after a record year in 2024, with many sponsors launching a second fund and new sponsors entering the market” stated Kimberly Flynn, the president of XAI. “Such robust growth is great for the interval / tender offer fund market. We believe the market’s trajectory will remain positive, with significant opportunities for expansion throughout the rest of the year,” she added.
XAI recently launched their XAI Interval Fund Index™ (INTVL), a total return index that tracks the interval fund market, helping to address the lack of easily accessible information on the market. “The XAI Interval Fund Index gives asset managers and financial advisors an unprecedented level of clarity in a market that has been notoriously difficult to track,” Flynn noted. “The first index tracking the interval and tender offer fund market, INTVL serves as the sole barometer for the market, giving investors a snapshot of how interval funds as a whole are performing,” Flynn added.
The non-listed CEF market reached a new peak with 270 interval and tender offer funds with a total of $181 billion in net assets and $220 billion in total managed assets, inclusive of leverage, as of March 31, 2025. The market includes 134 interval funds which comprise 50% of the total managed assets at $132.1 billion and 136 tender offer funds which comprise the other 50% with $88.3 billion in total managed assets. This is a significant change from previous quarters, as the number of interval funds has caught up to the total number of tender funds. In Q1 2025, 14 new funds entered the market, representing an increase of four funds compared to the 10 funds launched in Q1 2024. Market-wide net assets increased $9 billion in Q1 2025 from the prior quarter.
In total, there are 143 unique fund sponsors in the interval and tender offer fund space, with 50 fund sponsors that have two or more interval and/or tender offer funds currently in the market. Additionally, there are 27 funds currently in the Securities and Exchange Commission registration process from fund sponsors looking to launch another fund. Notably, the top 20 funds decreased their market share from 65% Q4 2024, to 60% in Q1 2025, displaying the growth of new funds in the market. Among the new funds launched in Q1 2025, there were three new interval fund sponsors, HarbourVest, Gemcorp and Pop Venture Advisers.
In this quarterly report, XAI covers the 2024-year end net flows which are lagged by reporting cycles. In 2024 funds had positive net flows, totaling over $38 billion, with 67% of funds reporting positive net flows. The majority of net flows in 2024 (53%) went into daily NAV funds without suitability restrictions, while 26% went into funds limited to accredited investors, and 21% went into funds limited to qualified clients. In aggregate, the top 20 largest interval/tender offer funds experienced an increase in net flows year-over-year from 2023 to 2024 including many of the market leaders such as the Cliffwater Corporate Lending Fund, Partners Group Private Equity (Master Fund), LLC, and ACAP Strategic Fund. In addition, Private Credit funds continued to dominate capital raising in 2024, bringing in over $20 billion in net assets, with Venture / Private Equity funds coming in second, bringing in over $11 billion in net assets.
“The non-listed CEF market continues to grow with a total of 58 funds in the SEC registration process at the end of the first quarter,” said Flynn. “The SEC backlog increased by five funds from the end of 2024 to the end of Q1 2025. So far in 2025, there have been 23 new SEC filings, compared to 15 new filings from Q1 2024, representing a 53% increase in registrations. Newly launched non-listed CEFs spent around seven months in the SEC registration process, with the fund’s asset class continuing to be the main driver of time spent in the SEC review process. Tax-Free Bond funds were the quickest to launch, at 160 days on average spent in registration,” she added.
At 49%, the majority of interval and tender offer funds do not have any suitability restrictions for investors imposed at the fund level — 30% of funds are available to accredited investors and 21% are only available to qualified clients. Alternative funds without suitability restrictions also prove to be more accessible and have gathered more assets at $118.2 billion in managed assets or 54% of market-wide assets.
For more information on the interval fund market and to read our full quarterly report on non-listed CEFs, please visit the CEF Market research page linked here and click ‘Subscribe’ for access to XA Investments’ online research portal and pricing information. In addition, please contact [email protected] or 888-903-3358 with questions.
About XA Investments
XA Investments LLC (“XAI”) is a Chicago-based 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, respectively the XAI Octagon Floating Rate & Alternative Income Trust, the XAI Madison Equity Premium Income Fund, and the Octagon XAI CLO Income Fund. 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, 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. For more information, please visit www.xainvestments.com.
