Kimberly Flynn

Kimberly Flynn is the president of XA Investments, which has a $1 billion fund platform and alternative investment consulting practice. She is regularly quoted in media as a subject matter expert on interval funds. Kim was head of product development for Nuveen’s structured products group.

Kim graduated from Harvard Business School and earned her B.B.A. in finance, summa cum laude, from the University of Notre Dame. Kim earned the Chartered Financial Analyst designation and is a member of the CFA Institute and CFA Society of Chicago. Kim serves on the Notre Dame Wall Street committee and on the Chicago Symphony Orchestra’s women’s board and is co-chair of their 2025 benefit gala.

CIO: What actionable thing have you learned over the course of your career that has proven itself this year?

FLYNN: Niche investment expertise can be valuable to help distinguish your firm and yourself from the crowd. I have spent the last 25+ years focused on the origination and development of SEC-registered closed-end funds. It’s only been in the last year that rest of the industry has started to appreciate the power of CEFs. A type of SEC-registered, non-listed CEF that was popularized in the last year is the interval fund (and its sister structure, the tender offer fund). The interval fund has “proof of concept” as a viable way to open access to alternative investments for individual investors. It also has found a following among asset managers and alternative investment boutiques who see the interval fund as an attractive evergreen capital solution for the private wealth marketplace. During the last year, I initiated and oversaw the development of the XAI Interval Fund Index, a rules-based total return index designed to track the performance of interval funds and tender offer funds. In addition, through our consulting practice at XA Investments, we’ve helped more than 20 asset managers with their plans to launch interval funds.

CIO: What do you think will be the biggest innovation in the institutional asset allocation industry in the next 10 years?

FLYNN: Americans saving for retirement should have the benefits of private market investments with respect to return enhancement and risk reduction. With the rapid decline of pensions in the U.S., the burden for saving and growing retirement assets is on the shoulders of individual Americans. Interval funds are the best way for individual investors to secure access to institutional quality private market investment strategies. A large portion of assets in the private wealth marketplace are in model-driven managed accounts. In the next 10 years, we expect major changes in model portfolio creation and execution, with the inclusion of private market assets. The interval fund industry is growing at a 30% compounded annual growth rate, according to XA Investments research, and is expected to accelerate with more institutional adoption in model portfolios. Sophisticated models and techniques will be required to help with portfolio rebalancing, and liquidity management required to incorporate illiquid or less liquid private market assets into retirement model portfolios such as target-date funds or collective investment trusts.

CIO: What asset classes (specific securities or sectors) look good to you now? Why?

FLYNN: Private credit is the largest category of the interval and tender offer fund market, with 91 total funds and $100.9 billion in net assets, which represents 54% of the market as of May 1. A growing sub-category of the private credit market is asset-backed lending, with 14 total active funds in the market today and four funds in the SEC registration process that are expected to launch later in the year. Current leaders in the asset-backed lending segment of the interval fund market include Cliffwater, Keystone, Federated Hermes, 1WS and KKR. With more equity market volatility in recent months, it is not surprising to see so many new interval fund sponsors enter the marketplace with asset-backed lending funds. Asset-backed loans are secured by collateral and produce attractive cash flows. Investors appreciate the benefits of asset-backed lending in the portfolio because these investments can serve as a buffer against losses experienced during market downturns. With shorter loan durations, asset-backed lending may offer faster capital returns and greater flexibility than corporate loans.