Cox Capital Bids 40% Below NAV for Variant Interval Fund Shares
Pennsylvania-based Cox Capital Partners has launched a $2.5 million cash tender offer for shares of Variant Alternative Income Fund, or NICHX, at a 40% discount to net asset value, in what the secondaries firm said is the first third-party tender offer for shares of an active interval fund.
Cox Capital Retail Secondaries Fund I, a private fund managed by a Cox affiliate, is seeking up to 161,290 shares at $15.47 per share, or approximately $2.5 million in total. The price is a 40% discount to the fund’s reported NAV of $25.79 per share as of Oct. 26. The offer expires at 5 p.m. ET on Nov. 30 unless it is extended or terminated. If more shares are tendered than sought, Cox will accept them on a pro rata basis.
Whether any shares change hands depends on Variant. The fund’s governing documents require its consent for share transfers, and Variant may withhold that consent at its discretion. Cox sent its formal consent request on Oct. 28, and Variant had not responded as of publication, according to Cox. If consent hasn’t been granted by expiration, Cox can extend the offer or terminate it and release tendered shares. Variant declined AltsWire’s request for comment when contacted Oct. 30.
Cox said it had previously spoken with Variant about one-off secondary trades but never about a tender offer.
“It’s our first interval fund tender offer, but far from our first interval fund trade,” said John Cox, Cox Capital founder and chief investment officer. “Several sponsors have let us provide liquidity to their shareholders over the last six years, and we hope Variant and others will do the same.”
Cox said it has completed interval fund trades with at least three major sponsors, including Bluerock, at discounts of approximately 5% to 31% to NAV.
Why Variant
NICHX conducts quarterly repurchase offers for 5% of its outstanding shares at NAV and may buy up to an additional 2% before prorating requests. Cox said Variant doesn’t publish its proration results, but that shareholders have told the firm the fund’s backlog is among the deepest in the interval fund space.
Cox rejected the idea that holders can simply wait for the fund’s repurchase program to work through the queue.
“If holders are getting 10% to 20% of their request filled each quarter, getting most of the way out at NAV takes roughly 2½ to 5+ years,” Cox said. “That assumes NAV holds and the fund doesn’t change course along the way.”
NICHX’s NAV has declined this year, from $26.42 per share as of Feb. 19 to $25.79 as of Oct. 26.
Cox said the discount, wider than the 12.5% to 30% discounts in its nontraded BDC offers this year, reflects proration of the fund’s repurchase offers as well as its portfolio, which includes specialty finance assets such as litigation finance and royalties that the firm called hard to value and hard to sell. Cox said it also weighs how concentrated a sponsor’s business is in a single fund.
“When one fund is most of a sponsor’s business, the sponsor has more reason to protect those assets, through a listing or tighter liquidity, than to hand capital back,” Cox said. “NICHX is Variant’s flagship.”
The Bluerock Comparison
Cox benchmarks the discount against Bluerock Total Income+ Real Estate Fund, which converted from an interval fund to a listed closed-end fund in December 2025. As previously reported by AltsWire, the renamed Bluerock Private Real Estate Fund closed its first day of trading on the New York Stock Exchange at $14.70 per share, 39.7% below its prior NAV of $24.36.
Cox said Bluerock’s fund honored its quarterly repurchases through 10 straight quarters of net outflows before suspending sales and listing. According to Cox, NICHX is eight quarters into the same pattern, and its most recent quarter of net outflows, equal to 3.5% of net assets, is slightly worse than Bluerock’s at the same point.
“We’re more concerned with whether NAV will be the exit at all,” Cox said. He added that a condition allowing Cox to terminate the offer if the fund’s NAV falls by a specified amount protects against a material event before closing and “isn’t a view on today’s NAV.”
Building a Platform
The Variant bid is the latest in a string of Cox offers for shares of nontraded vehicles. These include current and recent offers for Class I shares of Blue Owl Credit Income Corp., Blackstone Private Credit Fund, HPS Corporate Lending Fund, Apollo Debt Solutions BDC, and Ares Strategic Income Fund. Boards at several target funds have recommended that shareholders reject Cox’s offers, including Ares Strategic Income Fund in July.
Ares Strategic Income Fund’s board repeated its recommendation in October. Last week, the firm also launched a pilot lending program for nontraded BDC shareholders.
“We’re building a platform,” Cox said. “Retail investors should have the same options institutional investors do: secondary buyers, and lenders who will lend against their holdings.”
Cox said the firm isn’t pressing sponsors to enlarge their repurchase programs. “Nobody wants a fund forced to sell assets to meet redemptions. We just hope they won’t block transfers to willing buyers without a good reason,” he said.
On whether transfer restrictions need to change, Cox said it was too early to say.
“What we’re hearing is that the market was surprised by proration once the quarterly limits were enforced,” Cox said. “It would be even more surprised to learn it can’t sell to a willing buyer.”
Cox said it and its purchasing fund are independent of NICHX and Variant Investments, that the offer doesn’t imply the fund’s endorsement, and that no independent fairness opinion was obtained.
Variant Alternative Income Fund is a closed-end interval fund managed by Variant Investments that invests in specialty finance and other income-producing alternative assets.
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