IRVINE, CA—The Vertical Capital Income Fund hasbecome one of the first interval funds to exceed $100 million inassets. The fund has outperformed its benchmark, theBarclays Capital US MBS Index, since it wasintroduced in 2011 and has surpassed MBS Index results both at netasset value and at the fund's maximum sales charge from inceptionthrough the second quarter of this year. For the one-year periodending June 30, VCAPX produced a return of 6.79%,compared with a return of 4.66% for the benchmark MBS Index.

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According to Bayard Closser, president ofVertical Capital Markets Group, “VCAPX has become one of thefastest-growing, continuously offered, closed-end interval fundsbecause the fund is based on a strategy that resonates withinvestors and enables them to tap into a large asset class thatpreviously was unavailable to the public.”

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Christopher Chase, Co-portfolio manager for the fund, tellsGlobeSt.com, “Our goal for the Vertical Capital Income Fund is toprovide a higher-than-normal yield and above-average returns, withrelative capital protection and investments that are non-correlatedto equities and bonds. The fund also seeks total returnpotential and capital stability.” He adds the fund “would like tofinish the year above $150 million and eventually reach a $.5billion in assets.”

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VCAPX invests in whole mortgage notes and deedsof trust. As closed-end interval fund, it provides limitedliquidity on a quarterly basis. The structure combines theflexibility of quarterly withdrawals with the assurance that thefund will maintain sufficient assets to adjust to changing marketconditions, according to Closser. He points out that there is noguarantee that any investment strategy will achieve its objectives,generate profits or avoid losses.

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

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Closser adds, “We continue to increase our asset size not onlyby attracting new investors, but by continuing to purchaseadditional whole mortgage notes from lenders. Income-orientedinvestors may be attracted to the fund because it is less sensitivethan the bond market to changes in interest rates. The fund mayalso benefit from the continuing recovery of thehousing market, so we are hopeful that VCAPX willcontinue to grow.”

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Carrie Rossenfeld

Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.