At a glance
- The interval fund must offer to repurchase at least 5% of outstanding shares each quarter and may buy back an additional 2% at its discretion.
- At 16% demand against a 5% offer, the third-quarter fill rate works out to about 31%, consistent with the "about one-third" the September letter described.
- Cliffwater said investors who have requested repurchases since the first quarter have received about 78% of their capital to date.
Cliffwater Corporate Lending Fund capped third-quarter repurchases at 5% of shares after investors sought to redeem about 16% of the $30.4 billion interval fund, AltsWire reported. A Sept. 3 letter to shareholders said the fund would fill about one-third of requests, its second straight quarter of pro rata redemptions at the 5% floor.
The interval fund must offer to repurchase at least 5% of outstanding shares each quarter and may buy back an additional 2% at its discretion. When requests exceed 7% and the extra 2% goes unused, shares are repurchased pro rata. Unfilled requests do not carry forward, so shareholders must resubmit in a later offer. Tenders may be accepted in full for shareholders who own less than $2,500 and tender all of them, and for required minimum distributions from IRAs and qualified plans.
At 16% demand against a 5% offer, the third-quarter fill rate works out to about 31%, consistent with the "about one-third" the September letter described. First-quarter requests reached about 14%, and Cliffwater used its discretion to repurchase 7% of the fund for $2.34 billion. Requests rose to about 17% in the second quarter and about 16% in the third, and the fund stayed at the 5% floor in both. The second-quarter offer returned about $1.58 billion to shareholders in June; third-quarter payout figures have not been filed.
Cliffwater said investors who have requested repurchases since the first quarter have received about 78% of their capital to date. The next repurchase request deadline is Dec. 1.
Cliffwater has said the fund holds enough liquidity to meet 5% quarterly repurchases for more than a year without selling assets. After the first-quarter decision, S&P Global Ratings revised its outlook on the fund to negative from stable, according to Bloomberg. Net asset value per share fell to $10.28 as of July 23 from $10.52 at the March 10 repurchase pricing date. Net assets declined to $30.38 billion at June 30 from $31.26 billion at March 31, and new share sales cooled to $195.5 million in May and $216 million in June from $413.4 million in April.
Not every interval fund holds at 5%. Priority Income capped its quarterly exit at 2.5%; this publication reported in September. Cliffwater has not used its discretionary 2% in two quarters.
Redemption requests stayed near 3x the 5% repurchase cap
Cliffwater filled 7% in Q1; the 5% minimum in Q2 and Q3
Show as table
| Label | Value (%) |
|---|---|
| Q1 | 14% |
| Q2 | 17% |
| Q3 | 16% |
At 16% demand against a 5% offer, the third-quarter fill rate works out to about 31%, consistent with the "about one-third" the September letter described.
Reported by the Liquidity desk from AltsWire and The DI Wire. Published . Corrections