Interval funds and tender-offer funds have continued to raise assets at a rapid clip. As of June 30, 2025, we serve more than 46% of the unlisted closed-end fund market, and because of this, we are regularly involved in product development conversations. We’ve gathered some perspectives drawn from our conversations with asset managers—including private fund managers entering ’40 Act registered-fund space for the first time—and share them below.

Fund distribution planning and strategy

The basic need is ensuring that sales, operations and investment teams are aligned on a viable distribution plan. Sometimes, managers get most of the way through the development process before they need to backtrack because assumptions in one area lead to problems in another. Think carefully about both your target audience and how, exactly, you will serve them—considering increased operational and servicing complexities versus private funds.

The following are key distribution considerations that frequently surface during product development.

Demand

Real and verifiable advisor demand for your product is what will ultimately determine the success of getting product added to various RIA and broker-dealer platforms. Absent this demand, your fund may not gain any traction or approval at most distribution outlets. You may quickly find yourself taking only smaller direct purchases until you can drum up more support.

Availability

Private fund managers need to carefully evaluate the RIA and family office marketplace to make sure audience expectations are met. For example, retail-oriented RIAs may expect your product to be available alongside traditional ’40 Act funds such as mutual funds. Others may look to alternative platforms like CAIS, iCapital or AIX. Institutional-oriented RIAs and family offices, by contrast, are unlikely to require that platform presence.

Custodian

Do the advisors who are interested in your product work primarily—or only—with funds handled by a specific clearing custodian?

Other expectations

Are you confident that your target market is comfortable with the implications of your elections about valuation frequency, tax treatment and other critical factors?

Investor status

Are you selling to accredited investors only (or a higher standard such as qualified client or qualified purchaser)? And are you intending to charge a performance fee? These features are more commonly associated with tender-offer fund structures and are generally not permitted for interval funds seeking broad distribution.

Multiple share classes

If you anticipate a need for multiple share classes, you will need to file for exemptive relief with the SEC. We generally recommend seeking permission up front to create additional share classes if you think your target market may evolve over time—for example, starting with the RIA market and later evolving to include broker-dealers and wire house channels. You don’t have to actually create the additional share classes now, but seeking advance permission simplifies the process later.

Platform economics and ongoing distribution costs

Too often, managers map out their anticipated fees and costs but leave out ongoing platform fees—because they haven’t yet reached the point where those are charged. That’s an oversight if getting on one or more platforms is an important element of the distribution strategy. It’s important to know not only what the fees may be but how they’ll be paid. For example, in some cases, 12b-1 distribution plans and/or shareholder-service plans—by available share class—can be paid from fund assets and used to offset eligible expenses.

Other fees

One-time setup and due diligence fees, on the other hand, are usually not paid from fund assets but are paid by the fund manager. Your distribution path and share class structure will ultimately pre-determine which fees you might need to pay.

Closing thought

When it comes to registered products, several operational facets simply need thinking about up front. A solid investment strategy isn’t enough to make a product successful. An intentional distribution strategy is essential and requires having your sales and operations teams on the same page. Unfortunately, managers sometimes go far down a path before realizing there’s a disconnect.

Learn more about UMB Fund Services and how we can support your firm’s registered and alternative investment fund servicing needs or contact us to be connected with a fund services team member.