Interval Fund Watch: ABL Wealth Advisors, Russell Investments Register With SEC
The alternative investments industry continues to see the proliferation of investing opportunities, and interval funds – which have found particular favor among registered investment advisors – continue to populate the investing landscape at a progious rate.
Three new interval funds are poised to enter the space – one from ABL Wealth Advisors and two from Russell Investments – all of which filed amended preliminary prospectuses recently with the U.S. Securities and Exchange Commission.
ABL Longevity Growth and Income Fund
ABL Longevity Growth and Income Fund aims to achieve long-term appreciation and current income by primarily investing in longevity assets, which include mortality contracts, such as non-variable and variable individual life insurance policies, and annuity contracts.
The fund aims to invest at least 25% of its total assets in longevity assets or similar structured finance products. While it can also invest in short-dated treasuries and money market funds for cash management, the company said its core strategy involves acquiring mortality contracts at a discount from the tertiary market, with the goal of appreciation as insureds age. According to the company prospectus, annuity contracts will be acquired directly from insurers.
The fund also has the flexibility to invest up to 25% of its total assets in wholly-owned offshore subsidiaries. These subsidiaries, while not registered under the Investment Advisers Act of 1940, will follow the same investment objectives and limitations as the main fund, primarily to gain exposure to fixed life settlements within U.S. tax regulations.
Managed by ABL Wealth Advisors, the fund is offering an indefinite number of common shares at net asset value with an initial price of $10 per share. The minimum initial investment is $10,000, with subsequent purchases at $1,000.
The interval fund management fee is at the rate of 1.45% per annum of the average daily assets under management. Shares are sold subject to a maximum sales load of up to 5% of the investment amount, a distribution fee of up to 0.7% per annum of the shareholder’s average daily NAV (subject to a minimum annual fee of $18,000) and/or a shareholder service expense of up to 0.15% per annum of the shareholder’s average daily NAV. The fund will also pay to UMB Fund Services as administrator and transfer agent fees of a) up to 0.12% on average net assets (subject to a minimum annual fee of $57,000) for fund accounting, and regulatory and legal administration services; and (b) up to 0.05% on average net assets (subject to a minimum annual fee of $30,000) for transfer agent services, plus a per account fee of up to $30.00.
The fund will offer to repurchase at least 5% of its outstanding shares on a quarterly basis. Share repurchases will occur at the NAV per share, determined roughly two weeks after the repurchase request deadline.
Russell Investments
- Russell Investments New Economy Infrastructure Fund
Russell Investments New Economy Infrastructure Fund aims to provide long-term capital growth and current income by investing in a broad range of global infrastructure assets.
Its objective is to seek long-term capital growth and current income. Under normal circumstances, the company prospectus noted that at least 80% of its net assets will be invested in infrastructure assets – broadly defined to include systems, networks, and facilities in energy, utilities, transportation, and communication industries.
The fund’s investments will encompass both public and private infrastructure, strategically allocated across diverse industry sectors and geographies by its investment adviser, Russell Investments Infrastructure Adviser LLC, or RIIA. This includes:
- Underlying funds: Primarily private funds exempt from 1940 Act registration, as well as Russell Investments’ own Global Infrastructure Active ETF and other active or passive infrastructure ETFs;
- Secondary acquisitions: Purchasing existing investor interests in underlying private funds;
- Co-investments: Direct investments alongside other funds in individual infrastructure assets; and
- Public securities: Debt and equity of infrastructure companies.
The fund intends to diversify its portfolio across regions – United States, developed, and emerging markets – and issuer risk profiles, such as operational, under construction and pre-construction development. The investment philosophy emphasizes “new economy” infrastructure, which evolves with changing global needs, while also recognizing the enduring importance of traditional infrastructure types.
RIIA will manage the fund, receiving a monthly management fee at an annual rate of 1.25% of the fund’s average daily net assets. The adviser has agreed to waive or reimburse direct fund-level expenses to the extent they exceed 1.75% of average daily net assets until July 31, 2026.
The fund plans to declare and pay distributions from its net investment income on an annual basis, typically in mid-December for capital gains. All dividends and distributions will be automatically reinvested in additional fund shares unless a shareholder elects to receive cash.
- Russell Investments Strategic Credit Fund
Russell Investments Strategic Credit Fund aims to provide total return as its primary objective, with current income as a secondary objective, by investing predominantly in a diverse range of credit assets.
The fund’s primary objective is to seek total return, with current income as a secondary goal. A key non-fundamental investment policy dictates that, under normal circumstances, at least 80% of its net assets, plus any borrowings, will be invested in credit assets, broadly defined as:
- Underlying funds: Direct or secondary investments in various vehicles that primarily invest in private or public loans, credit securities, and other credit-related instruments, including private funds and credit ETFs;
- Co-investments: Direct co-investments in loans, credit securities, and other credit-related instruments alongside other funds;
- Credit default swaps;
- Other lending activities: Such as loan origination and marketplace lending;
- Credit securities: Including asset-backed, mortgage-backed, or distressed securities; and
- Credit-related instruments: Such as senior and other types of loans.
The fund’s assets will be allocated primarily among these underlying funds, which are managed by various investment managers. While a non-diversified fund, the advisor, Russell Investments Credit Adviser LLC, or RICA, intends to maintain a broad and diverse portfolio of credit assets across multiple sectors and strategies, and may invest globally without restriction.
According to the preliminary offering document, RICA will manage it, receiving a monthly management fee at an annual rate of 0.95% of the fund’s average daily net assets. Until July 31, 2026, RICA has contractually agreed to waive its management fee and reimburse other direct fund-level expenses if they exceed 1.25% of average daily net assets. The fund may also pay an incentive fee to the adviser, equal to 10% of “pre-incentive fee net investment income” attributable to co-investments, subject to a hurdle rate.
The fund will ordinarily declare and pay distributions from its net investment income on a quarterly basis. Capital gains distributions are typically declared once a year in mid-December. All dividends and distributions will be automatically reinvested in additional fund shares unless a shareholder elects to receive cash.
Ultimus Fund Solutions LLC is expected to serve as the administrator and transfer agent for both funds, and State Street Bank and Trust Company as custodian to each. Shareholders will also indirectly bear a portion of the fees and expenses of the underlying funds for their respective interval fund.
Both Russell Investment funds plans to use leverage, which can increase portfolio volatility, to pursue their investment objectives, primarily through credit facilities. The borrowing limit is up to 33.33% of each of their total assets. However, neither interval fund anticipates using leverage during their respective first year of operations.
Both Russell Investment funds plan to offer two classes of common shares:
- Class F shares are generally for institutional investors with significant aggregate investments ($5 million initially, increasing to $25 million after 30 days of operations), and have an initial minimum investment of $5,000. These shares will close to new investors approximately one year after the fund’s commencement of operations, with exceptions for employees and trustees.
- Class I shares have a minimum initial investment of $5,000 and are subject to an annual shareholder servicing fee of up to 0.25% of average daily net assets.
Russell Investments employees and trustees are exempt from minimum investment requirements for both funds’ respective share classes.
To offer liquidity, both Russell Investments funds plan to adopt a fundamental policy to conduct quarterly repurchase offers for at least 5% (and up to 25%) of its outstanding shares at NAV.
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