By partnering with Lincoln, clients gain not only the firm’s market-wide insights but most importantly, the knowledge of how to build an organization capable of successfully managing a retail fund.

Interval funds offer periodic liquidity for investors at the fund’s NAV, presenting unique challenges. Funds must ensure there is sufficient liquidity to meet redemptions without overly diluting returns.  Careful consideration must be made as to the most efficient ways to provide liquidity when the underlying investments are inherently illiquid.  Additionally, more frequent buy-ins can cause sudden surges of dry powder requiring rapid deployment. Without a steady pipeline of ready-to-close deals, funds must find alternative ways to utilize new capital such as the establishment of warehouse or subscription lines.  To deal with unexpected redemption requests, managers are choosing to seed their interval funds with more liquid products such as broadly syndicated loans or secondaries and retain a portion of such product perpetually.

Managers tapping retail investor capital face strict regulatory scrutiny. In fact, the SEC and FCA have recently highlighted valuation and retail investor protections as key priorities for 2025.  The SEC’s Division of Examinations recently noted in its 2025 Examination Priorities publication that reviews may have a heightened focus on valuation if invested in illiquid or difficult to value assets. Examinations of investment companies working with retail investors, particularly those saving for retirement, will continue to be a priority. Similarly, the FCA’s supervision priorities, published in February 2025, highlight valuations as well as its focus on retail product development. The FCA acknowledges the growing popularity of retail offers of private market products and expects valuation processes of illiquid assets to be robust, with a strong governance framework, noting that investors need fair valuations to make informed decisions and understand how their investments are performing.

With periodic liquidity events and tighter regulatory oversight, it’s time to rethink your valuation processes. Do you have sufficient resources including the right team, technology, and expertise to adapt?

Here are the critical questions every manager should be asking:

Interval fund marketing hinges on earning the trust of wealth managers and distributing banks.  Since the private investments within these funds do not trade on public markets, these stakeholders demand additional assurance that their clients are transacting at fair prices.  Historically, many private equity advisors have handled valuations in-house but retail gatekeepers are now requiring third-party opinions in many instances.  For advisors with internal processes in place, choosing a valuation provider that integrates seamlessly and minimizes disruption is critical.