PHILADELPHIA, PA — Cox Capital Partners plans to extend its secondary-liquidity business into interval funds, offering retail investors another potential exit from increasingly popular private-market vehicles that restrict when shareholders can redeem their holdings.
An affiliate of the Philadelphia-based firm intends to launch tender offers for at least three interval funds managed by three separate sponsors following upcoming fund repurchase periods, subject to market conditions and regulatory requirements.
The expansion builds on Cox Capital’s tender-offer program for non-traded business development companies and other illiquid investments. The firm has spent six years sourcing and executing secondary transactions for retail investors through financial advisers and intermediaries at registered investment advisers, independent broker-dealers and wirehouses.
Interval funds have become another channel for individual investors to gain exposure to private credit, private equity and other alternative assets. Unlike conventional open-end mutual funds, the vehicles provide liquidity through periodic repurchase offers rather than allowing shareholders to redeem their investments daily.
Cox Capital is seeking to provide an additional source of liquidity outside those scheduled fund repurchases by purchasing investor positions for its own account.
“Our mission is to bring to the retail market what institutional investors have long been able to count on: an accessible and durable secondary source of liquidity for illiquid alternatives exposure,” founder and Chief Executive Officer John Cox said.
Cox argued that more dependable secondary liquidity could make financial advisers more comfortable allocating client money to long-term private-market investments.
“Private markets may face challenges reaching their full potential in the wealth channel without reliable liquidity options in place,” Cox said.
The firm and its affiliates recently launched tender offers involving certain publicly registered funds managed by HPS, Apollo, Ares and Blue Owl. Those fund sponsors have not endorsed or approved Cox Capital or its tender-offer program, according to the company.
Cox Capital intends to make additional offers involving those investments later this year and again in January, subject to market and regulatory conditions.
The firm’s model differs from secondary-market venues that facilitate continuous trading between buyers and sellers. Cox Capital and its affiliates instead acquire positions directly and do not charge investors a separate transaction fee.
Its compensation is incorporated into the purchase price, which is typically below the fund’s net asset value. When applicable, pricing is disclosed through regulated tender offers and public filings governed by Securities and Exchange Commission rules.
The planned interval-fund expansion comes as private credit, real estate, infrastructure and other alternative investments reach a broader retail investor base, increasing the importance of mechanisms for investors seeking liquidity before an underlying vehicle would otherwise provide it.
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