Alternative credit interval funds AUM jumps 37pc to $83bn

Alternative credit interval funds (ACIFs) saw their collective assets under management (AUM) rise by 37 per cent – or $22.6 billion (£16.8 billion) – in 2025, taking total ACIF AUM to $83 billion, according to a report by Gapstow.

The $22.6 billion rise marks its largest ever year-on-year increase, surpassing a rise of $19.6 billion in 2024. Gapstow said that more than 20 per cent of this growth is attributable to new ACIFs that launched in 2025, and around 80 per cent to the growth of funds that were in existence at the start of the year.

The increase is in line with its three-year compound annual growth rate, but is below its five-year rate of 58 per cent per annum, Gapstow said.

The report found that the ACIF universe now includes 91 funds, with 2025 seeing a “record number of new fund launches” at 22. However, it said AUM remains “highly concentrated, with the ten largest funds having an 76 per cent market share”.

Asset-backed finance funds grew twice as fast as corporate credit funds, becoming ACIFs’ “new engine of growth”.

“Asset-backed finance and diversified strategies produced stronger relative returns than corporate credit strategies, which were basically in line with public, long-only, unleveraged credit indices. After a strong prior two years, CLO-centric strategies were the weakest,” the report said.

Investment performance in 2025 was more modest than previous years, Gapstow found, with average yields down by over one per cent.

“Overall, the yield from the total sample fell by over 1 per cent, from 10.4 per cent to 9.3 per cent, from 2023 to 2025. That said, results varied significantly by strategy.

“The yield from broadly syndicated credit funds dropped by about 150 basis points and the yield from CLO-centric funds dropped by even more. The yields from the more “private” investment-focused funds, held steady, or dropped by only 0.4 per cent to 0.6 per cent,” it added.