AllianceBernstein Launches Opportunistic Credit Interval Fund

AllianceBernstein L.P. has launched the AB CarVal Credit Opportunities Fund (ABAYX), an unlisted, closed-end interval fund that will invest in a mix of public and private credit across the US and Europe, including aircraft leasing, specialty finance, and energy transition investments.

ABAYX aims to outperform high-yield bonds over time with less volatility and lower correlation to public markets, the firm said. AB CarVal principal John Withrow and AB CarVal managing director Roger Newkirk will oversee the fund, supported by AB CarVal managing principals James Ganley, Jody Gunderson, and Lucas Detor.

The fund’s strategy was introduced in February and has since grown to exceed $183 million in assets as of the end of August. The fund’s prospectus notes that it carries an adjusted net expense ratio of 1.98% and for the year to date is up more than 4%.

“Historically, this strategy has been limited to only institutional clients; that changes today with this vehicle as it is now available to individual investors with low minimums, providing easy access to a differentiated diversified credit solution,” said AB’s head of global client group and head of private wealth, Onur Erzan.

AB acquired CarVal Investors in July 2022. The interval fund launch follows AB CarVal’s close of CVI Clean Energy Fund II at $1.5 billion in August of 2023.

AB had $791 billion in assets under management as of August 31. AB CarVal, part of AB’s private alternatives business since 1987, has about $16 billion in assets under management and invested $149 billion in 5,765 transactions across 82 countries.

Dechert LLP served as legal advisor to AllianceBernstein on the transaction. The Dechert team was led by financial services partners William J. Bielefeld, Matthew E. Barsamian and Alexander Karampatsos.