IRVINE, CA—The Vertical Capital Income Fund has become one of the first interval funds to exceed $100 million in assets. The fund has outperformed its benchmark, the Barclays Capital US MBS Index, since it was introduced in 2011 and has surpassed MBS Index results both at net asset value and at the fund's maximum sales charge from inception through the second quarter of this year. For the one-year period ending June 30, VCAPX produced a return of 6.79%, compared with a return of 4.66% for the benchmark MBS Index.

According to Bayard Closser, president of Vertical Capital Markets Group, “VCAPX has become one of the fastest-growing, continuously offered, closed-end interval funds because the fund is based on a strategy that resonates with investors and enables them to tap into a large asset class that previously was unavailable to the public.”

Christopher Chase, Co-portfolio manager for the fund, tells GlobeSt.com, “Our goal for the Vertical Capital Income Fund is to provide a higher-than-normal yield and above-average returns, with relative capital protection and investments that are non-correlated to equities and bonds. The fund also seeks total return potential and capital stability.” He adds the fund “would like to finish the year above $150 million and eventually reach a $.5 billion in assets.”

VCAPX invests in whole mortgage notes and deeds of trust. As closed-end interval fund, it provides limited liquidity on a quarterly basis. The structure combines the flexibility of quarterly withdrawals with the assurance that the fund will maintain sufficient assets to adjust to changing market conditions, according to Closser. He points out that there is no guarantee that any investment strategy will achieve its objectives, generate profits or avoid losses.

“While passing the $100-million milestone makes this a successful offering for Vertical, it's even more important to us that this be a successful offering for our investors, who to date have benefited from returns that have exceeded benchmark performance,” says Gus Altuzarra, CIO of Vertical.

Closser adds, “We continue to increase our asset size not only by attracting new investors, but by continuing to purchase additional whole mortgage notes from lenders. Income-oriented investors may be attracted to the fund because it is less sensitive than the bond market to changes in interest rates. The fund may also benefit from the continuing recovery of the housing market, so we are hopeful that VCAPX will continue to grow.”