The Future of Interval Funds: Growth for Family Offices

Partner content by David Jejelava of CION Investments.

Over the past decade, interval funds have become more of a mainstream private markets access point for investors seeking exposure to alternative assets while balancing liquidity needs. For family offices already active in the private markets space, they could represent a structural evolution. The interval fund wrapper can serve as a complementary tool to their alternatives portfolio alongside closed-end fund commitments, co-investments or direct investments. Interval funds can enhance an alternatives sleeve in a family office portfolio by filling strategic gaps, simplifying administration, and offering limited periodic liquidity through a '40 Act wrapper.

Interval funds are registered under the Investment Company Act of 1940, but unlike their exchange-traded counterparts, they do not trade on secondary markets. Investors purchase shares at net asset value (NAV) and can exit only through periodic repurchase offers, typically quarterly, for a set percentage of fund assets generally 5% of NAV. Shares are priced at NAV through quarterly valuations on assets rather than at market-driven discounts or premiums, and the structure allows managers to hold illiquid assets without having to meet daily redemption obligations.

Family offices may already be familiar with adjacent structures such as tender offer funds and non-traded business development companies (BDCs), which unlike interval funds generally conduct repurchase offers at the discretion of their boards. Interval funds are further distinguished by Form 1099 tax reporting rather than Schedule K-1, which can reduce the administrative burden for lean family office teams managing multiple entities and accounts.

Family offices understand that illiquid private market investing typically comes with tradeoffs, including J-curves, fund lives with multi-year extensions, and lack of visibility with capital calls that tie up substantial cash reserves. Interval funds can offer an alternative that compresses much of that complexity into a single registered vehicle with a defined limited liquidity mechanism. As such, a recent Blackrock survey, found that alternative assets made up 42% of family office portfolios in 2025, up from 39% in 2023. with a third of offices planning to increase private credit allocations over and with infrastructure close behind at 30%.¹ 

These themes contributed to why CION sought to pioneer the interval fund space with an income-focused credit strategy managed in partnership with Ares Management, that invests in private and public credit across the capital structure. The fund has grown to approximately $7 billion in assets under management across nearly 950 individual investments since its launch in 2017. More recently, in 2024 CION launched an infrastructure vehicle managed in partnership with GCM Grosvenor, investing across digital infrastructure, transportation, and energy transition infrastructure. The fund has since grown to 46 investments across 35 different infrastructure sponsors. Investors have found that the choice of wrapper is becoming increasingly more relevant to how capital gets deployed, with registered interval funds providing investors access to similar alternatives’ exposure with limited periodic liquidity.

Interval funds have been scaling rapidly in both number of launches and assets under management. According to XA Investments, 37 new interval funds launched in 2025, up from 31 in 2024, with 21 already launched as of mid-year 2026. Interval fund launches have outpaced those of tender offer funds since 2023 and account for 180 of the 332 non-listed closed-end funds launched since 2015, with net assets reaching roughly $127B as of yearend 2025.² Sponsors have broadened portfolio construction beyond traditional concentrations in real estate and direct lending, expanding into infrastructure/real assets, secondaries, venture, and specialty strategies.

For family offices, interval funds could become a more attractive way to hold private assets without the operational burden of K-1 reporting and capital commitment thresholds of 10+ year long drawdown funds. Since invested capital is fully deployed at purchase, interval funds allow for simpler allocation management than drawdown funds, reducing cash drag, monitoring of capital calls and maintenance of cash reserves.

Additionally, interval fund portfolios can potentially offer more diversified private market exposure than a single concentrated position.

Interval funds additionally provide periodic opportunities to repurchase shares, giving investors a degree of liquidity access unavailable with long-term lockups. Though repurchases are capped and sometimes pro-rated, the semiliquid structure can help family offices to rebalance their private market exposure as market dynamics evolve.

As private market access continues to evolve, interval funds are drawing more attention from established managers who started to deploy strategies in a 40-act interval fund wrapper. Because of their liquidity component, interval funds have traditionally been positioned as a vehicle designed for retail investors seeking private market exposure with some access to liquidity. However, the structural profile of interval funds could be well suited to family office portfolios, given their ability to complement illiquid direct investments with actively managed semiliquid portfolios.

Interval funds are generally best used as a complement to direct private market relationships in a portfolio rather than as a replacement. Within an alternative’s allocation, their flexibility as compared to a traditional 10-year fund commitment enables them to function as a partial liquidity sleeve while capitalizing on the illiquidity premium, since they are still illiquid relative to public markets. Allocation size should account for the possibility of limited liquidity in stressed periods; quarterly repurchase mechanics are not equivalent to daily liquidity when planning around cash-flow needs.

Family offices may already be considering how their investing strategies could benefit from interval funds. Interval funds can serve as a foundational piece of family office allocations to private markets, or as an option for alternatives exposure with comparatively lower minimum capital commitments.

Continued strategy broadening, maturing platform infrastructure, and improved reporting standards may serve to reduce friction further. Demand for both income and private market exposure may stimulate growth for interval funds, and structural innovation can make private market allocations adaptable to a variety of portfolio strategies.

The lack of daily liquidity available with interval funds has the potential to expose investors to liquidity risk. Repurchase offers can be oversubscribed and prorated, meaning an investor may not be able to exit in full during a given quarterly repurchase period. Each fund will also have specific capital, market and strategy risks, depending on the underlying fund assets. They can be affected by economic downturns, interest rate changes, and other factors that can reduce their value and performance. Fund-level leverage varies by sponsor and strategy and warrants attention in any underwriting review.

Practical due diligence for family office allocators should include historical repurchase fulfillment rates; valuation policy and independent oversight; GP alignment; transparent all-in cost comparison against a comparable direct fund commitment; underlying asset liquidity under stress; and manager tenure through full market cycles.

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Family Office personnel interested in learning more about CION Investments and interval funds generally can reach out to David Jejelava at [email protected] or schedule a time at the following Calendly link. 

_{1. BlackRock, Global Family Office Report 2025 July 2025.} 

_{2. XA Investments LLC, XAI Non-Listed Closed-End Fund Second Quarter 2026 Market Update, June 30, 2026 (GlobeNewswire).} 

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