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Interval Funds: How They Got Here and Where They’re Going

Fund Intelligence's Compliance Reporter

"Pilgrim did the very first interval fund, in maybe 1988 or 1989, before there even was a rule," Jay Gould recalled about the former Pilgrim Group, as if telling a roguish story of his youth. 


"One reason interval funds did not catch on as fast as some people thought they might may be because many large brokerage firms didn't fully appreciate the concept, and, therefore, they didn't provide the interval funds with the sales support. That is starting to change," said Tom Westle, a partner at Blank Rome, who registered the second ever interval fund. 


However, most remain confident that current compliance environment will encourage the sector to grow. The SEC recently proposed a fund-of-funds rule, which would standardize and regulate how a fund of fund operates, replacing current patchwork of exemptive orders. 

"The proposed fund of funds rule may create more opportunities for growth of interval funds," said Westle. "It will allow interval funds to invest in and hold a larger percentage of private equity and hedge funds and open-end and closed-end funds and might, therefore, result in interval funds experiencing growth." 

"Interval Funds: How They Got Here and Where They’re Going," by David Isenberg was published in Compliance Reporter, a Fund Intelligence publication, on January 24, 2019.