Interval Funds Having Big Year on Private Credit Demand

Ron Day

Mon, Jun 9, 2025, 5:00 AM 2 min read

Interval funds, a niche rival to ETFs and mutual funds, are having a big year as investors increasingly utilize the vehicle to gain access to private markets.

Asset managers including TCW have launched new interval funds, while Blackstone Inc., Wellington Management and Vanguard Group issued a joint fund this year. Asset managers have launched 25 so far this year, bringing the market total to 139, according to Morningstar Direct. They hold about $100 billion in assets, the largest being the $27.9 billion Cliffwater Corporate Lending Fund, Morningstar said.

Interval funds are closer to mutual funds than ETFs due to their illiquidity. Still, their market is dwarfed by the $11 trillion in nearly 4,400 exchange-traded funds, as well as the $20 trillion in about 6,600 mutual funds.

The funds’ structure lends itself to investing in things like private credit and other assets not readily accessible in public markets. Unlike ETFs, which must be redeemable daily, interval funds can be redeemed at certain periods—intervals—typically quarterly. This quarterly redemption permits fund managers to participate in esoteric investments like asset-backed finance.

Tom Balcom, founder of 1650 Wealth Mgt. in Lighthouse Point, Florida, said he’s putting more client money into interval funds as demand for access to private credit markets rises. For example, a client wanting 20% exposure to fixed income may have 10% of his or her assets put into interval funds, he said.

“They offer better yields, and clients say, ‘I’ll give up the liquidity for the higher yield’,” he said. The funds carry higher fees, with the tradeoff being less volatility and better yield, he added.

For example, TCW in April launched the TCW Private Asset Income Fund, which allocates about 80% of the portfolio to private asset-backed credit in consumer finance, residential, hard assets and financial assets, the company said.

The launches also come as ETF issuers struggle to crack the private asset market. The $54.7 million SPDR SSGA Apollo IG Public & Private Credit ETF (PRIV), the first exchange-traded fund offering private market access, hasn’t budged since its late February launch and has had no inflows since early March.

The Securities and Exchange Commission has raised liquidity and naming issues with State Street Corp., which launched the ETF with Apollo Global Management. The agency has said the fund was misleadingly named and had liquidity risk issues.

Permalink | © Copyright 2025 etf.com. All rights reserved