The Rise of Interval Funds & the Democratization of Alternatives

For decades, access to private market investments, venture capital, private credit, real estate, and other alternatives, was reserved for a select few. But that’s changing. And fast.

At the center of this shift? A quiet revolution in fund structure: the interval fund.

Interval funds are making it possible for retail investors to tap into asset classes once exclusive to institutions and ultra-high-net-worth individuals. At the same time, they’re giving fund managers a powerful, compliant framework to raise capital from a broader investor base without compromising on operational efficiency or oversight.

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Why Interval Funds Are on the Rise

The demand for alternatives is growing. According to a 2024 Preqin report, individual investors are expected to drive nearly $5 trillion into private markets by 2030. But traditional fund structures, like limited partnerships or private REITs, come with built-in barriers for retail participation: high minimums, long lockups, and restrictive accreditation rules.

That’s where interval funds come in.

Interval funds are SEC-registered closed-end funds that offer limited liquidity at set intervals and can accept capital from both accredited and non-accredited investors. They provide an elegant middle ground between daily liquid mutual funds and fully locked-up private vehicles.

Key drivers behind the rise:

• Retail demand for yield and diversification - With volatility in public markets and inflation eating into returns, individual investors are actively seeking new ways to diversify and protect their portfolios.

• More flexible fund structures - Interval funds allow GPs to maintain long-term investment horizons while still offering some redemption flexibility, making them attractive to investors and managers.

• Regulatory clarity - As a 1940 Act structure, interval funds offer a well-understood compliance framework that can be operated transparently and efficiently with the right technology in place.

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How Fintech Is Fueling the Movement

Historically, launching an interval fund was slow, expensive, and complex. But thanks to modern fintech platforms like Sweater that’s no longer the case.

We’re helping a new generation of fund managers:

• Launch interval funds with lower upfront costs and faster time to market compared to traditional fund launch models - From legal structuring to investor onboarding, Sweater provides the infrastructure to get your fund off the ground—without needing a 10-person back office.
• Reach and serve retail investors compliantly - With AML/KYC, transaction processing, and disclosure workflows supported through our platform, you can scale your investor base with confidence.
• Manage liquidity events and fund flows - We support interval-based redemption windows and cash management tools so your fund operations stay smooth and transparent.

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What This Means for Fund Managers

The shift toward interval funds isn’t just about investor access, it’s about manager enablement. If you’re running a venture strategy, building a real asset portfolio, or investing in emerging alternatives, interval funds can open new doors:

• Broaden your capital base.
• Increase AUM more sustainably.
• Build a durable brand with long-term retail relationships.

In short, you no longer need to choose between innovation and compliance. With the right structure and the right fintech partner, you can have both.

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Ready to Launch Your Interval Fund?

Sweater was built for fund managers who want to unlock retail capital without cutting corners. Our platform gives you everything you need to operate securely, compliantly, and confidently in the new era of alternatives.

Let’s talk. Click here to explore what’s possible.

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The information contained in this post is provided for informational and educational purposes only and should not be construed as investment, legal, or tax advice. The content does not constitute an offer to sell, or a solicitation of an offer to buy, any securities or investment products.