Tender Offer Funds: Structure Meets Strategy

April 2026 / Authored by Jay Alicandri, Thomas Friedmann and David Marcinkus

I. Summary

 Liquidity-matching: Tender offer structure matches the nature of the underlying assets.

 Built-in flexibility: Board’s ability to exercise judgment can protect all shareholders during periods of stress.  Robust disclosure: Investors are clearly informed of liquidity terms (investments in private assets should not be understood to be liquid).  Private credit funds: Investment objective to generate income and distribute such income to shareholders.

II. Introduction

Over the past decade, asset managers have sought to expand investor access to private markets assets, such as private credit, real estate, infrastructure and other illiquid assets, within the regulatory framework of the 1940 Act. Two vehicles have emerged as the principal means of accomplishing this: interval funds and tender offer funds. 1 This paper discusses tender offer funds and concludes that their structural features align well with the liquidity profile of private market investments. This paper also suggests that the repurchase framework of tender offer funds protects the interests of all shareholders and not only those seeking to redeem their shares. In particular, the discretionary repurchase framework allows tender offer funds to balance providing liquidity for redeeming shareholders with preserving value for long-term investors. Tender offer funds are closed-end investment companies, including business development companies, whose common stock is not traded on a national securities exchange. Unlike traditional listed closed-end funds, tender offer funds generally conduct continuous offerings of shares at net asset value (NAV) in an offering registered under the 1933 Act which allows for access by retail investors. Shareholders are offered limited liquidity periodically through repurchase offers conducted at NAV. These funds are primarily distributed through financial intermediaries and wealth management platforms and provide individual investors with access to private market strategies that have historically been available only to institutional investors and the very wealthy.

1 Ultimately, the most suitable structure for a fund should be determined in the fiduciary judgment of the fund’s investment adviser and board based on all relevant factors, which may include, among others, the fund’s investment objective, strategy, anticipated portfolio and liquidity profile, offering methodology, and target investor market. Accordingly, there is no “one-size-fits-all” structure, and the full array of options, including tender offer funds, interval funds, listed closed-end funds, and other potential structures as appropriate, should be considered.

April 2026 / Page 1