ACAP Strategic Fund (XCAPX): $11.9B, 25% Offers, 1.3% Taken

What the fund is, and why it is on this site

Search results for XCAPX are quote pages. The SEC filings say something quote pages do not: ACAP Strategic Fund was organized as a Delaware statutory trust in June 2009, began operations on March 1, 2010, and is a registered closed-end fund that “operates as an interval fund under Rule 23c-3”. It buys listed stocks, sells others short, and holds options and swaps. It is not a real estate fund and it is not a private credit fund. It sits in our coverage because it is the second-largest interval fund on the list we compiled from the SEC's repurchase notices (the full list of interval funds), and because investors who hold non-traded real estate, BDC and interval vehicles are often offered it next to them by the same advisers.

Who runs it, from the report's notes: SilverBay Capital Management LLC is the adviser, “controlled by its sole member, Alkeon Capital Management, LLC”, and Alkeon is also “the non-managing member of Breakwater”, the broker-dealer that distributes the shares. So the firm that sets the strategy has an ownership interest in the distributor. Shares can be bought only by investors who certify “a net worth of more than $2,200,000” excluding their primary residence, or who are “qualified client”; the minimum initial investment is $50,000 and each later purchase at least $5,000. Class A can carry a sales load of up to 3%; Class W, for wrap-fee accounts, has none. For how the interval structure works in general, see what an interval fund is.

Six years of NAV and returns

Fiscal years end September 30. The table is Class A, from the financial highlights in the March 2026 report.

Chaining the six net total returns gives +17.4% over five and a half years, about 2.9% a year (our arithmetic; it ignores any sales load and any tax). Net assets halved in fiscal 2022: from $12.22 billion to $6.82 billion, down 44% (our arithmetic), a year in which the Class A NAV lost 41.51%. The fund then more than recovered: Class A NAV was $29.22 on September 30, 2025. The repurchase notices put it at $31.53 on May 8, 2026 and $30.40 on August 7, 2026, and Form N-PORT puts net assets at $11.87 billion on June 30, 2026, $1.52 billion (14.7%) above March 31 (our arithmetic). The two classes' monthly returns on that filing were 10.68% and 10.76% in April 2026, 0.80% and 0.84% in May, and 2.72% and 2.78% in June.

What the $7.7 billion of liabilities is

The March 31, 2026 balance sheet shows total assets of $18.08 billion, total liabilities of $7.73 billion and net assets of $10.35 billion. Liabilities are 75% of net assets and 43% of total assets (our arithmetic). Read quickly, that sounds like a borrowing fund. It is not:

The short positions are 51.25% of net assets. Actual borrowing is small: note 10 gives average daily borrowings of $189,137,182 for the six months at “the daily weighted average annualized interest rate” of 2.63%, and the amount at March 31, 2026 was $59,175. Interest expense was $2.2 million in the half. The same note caps borrowing at 33⅓ percent of total assets (excluding short sales and derivatives), and still says: “The Fund’s investment program makes frequent use of leverage.” The leverage is in the long and short books and the swaps, below.

The fund also lists, at March 31, 2026, $1.23 billion of purchased options (11.92% of net assets) and total return swaps with Morgan Stanley (net unrealized appreciation of $824.4 million, 7.96% of net assets), against $917.9 million of cash collateral received. The notes warn that the derivative agreements “contain credit-risk related contingent features which include, but are not limited to, a percentage decline in the Fund’s NAV over a specified time period”, which could let a counterparty “require the Fund to post additional collateral or terminate the derivative positions”. None was triggered at March 31, 2026. Every common stock held was priced at Level 1 ($10.74 billion) and the fund had no Level 3 assets, so, unlike a private credit or real estate vehicle, NAV here is market prices, not an appraisal.

Long, short and gross exposure

Form N-PORT gives each position as a percent of net assets. Our sums of the equity lines at seven dates:

At June 30, 2026 the long book was 108.5% of net assets and the short book 51.9%, so gross exposure was 160.4% and net long exposure 56.6% before the options and swaps (our sums). The ten largest longs were 45.3% of net assets: Taiwan Semiconductor Manufacturing ($724.3 million, 6.10%), Amazon.com (5.26%), Lam Research (5.06%), Applied Materials (4.52%), Safran (4.49%), KLA (4.13%), Amphenol (4.09%), Teradyne (3.91%), Meta Platforms (3.88%) and Siemens Energy (3.87%). The largest shorts were Broadcom (−5.03%), GE Vernova (−3.92%), Arm Holdings (−3.80%), the VanEck Semiconductor ETF (−3.42%) and Shopify (−1.80%), and the ten largest shorts together were 24.3% of net assets. At March 31 the report's industry tables show semiconductor equipment at 12.18% and semiconductor integrated circuits at 7.99% of net assets on the long side. Turnover is high: 105% in the half and 143% in fiscal 2025.

What it costs

The January 2026 prospectus table, as a percentage of net assets, using the fiscal 2025 incentive fee:

The incentive fee is 20% of net profits above the “loss carryforward account” (a high-water mark), and the prospectus says it is “calculated and accrued daily as an expense of the Fund (as if each day is the end of a fiscal year)”, so NAV is already net of it. It is also due when a repurchase offer sets a Fiscal Period: “only that portion of the Incentive Fee that is proportional to the Fund’s assets paid in respect of such share repurchases” is paid then. The adviser earned $525,269,738 of incentive fees for the year to September 30, 2025, of which $518.7 million was still accrued at September 30 and was paid in the half that followed (the cash flow statement shows the decrease). In the six months to March 31, 2026 there were “no accrued Incentive Fees”.

A worked example (our arithmetic) on $100,000 held a full year at the prospectus ratios: in a year like fiscal 2025, when Class A returned 36.12% before and 29.81% after the incentive fee, costs of 9.25% are $9,250; in a year with no incentive fee they are 3.60 points, $3,600 in Class A and $2,850 in Class W (8.50 minus 5.65). In the half to March 31, 2026 the Class A ratio was 4.09% and Class W 3.33%, of which core costs (excluding dividend and interest expense and trading costs) were 2.36% and 1.61%. In dollars the fund spent $211.0 million in the half against $90.2 million of investment income, a net investment loss of $120.7 million that gains on positions have to cover; fiscal 2025's expenses were $895.4 million. Of the half's expenses, $81.1 million was management fees, $51.9 million stock loan fees and $39.1 million dividends paid on shares sold short.

25% offered, 1.3% taken

Every notice we read says the same thing: the fund offers to repurchase up to 25% of its shares at NAV as of the last day of the quarter, requests due at 4:00 p.m. New York time about two weeks earlier, and proceeds credited within seven days.

What the fund then repurchased is in the shareholder reports, which do not give shares tendered (unlike some credit funds' reports). The balance sheet gives the March 2026 result: payable for shares repurchased of $136,780,657 at March 31, 2026, 1.32% of net assets (our arithmetic), against about $2.59 billion that 25% of net assets would be (our arithmetic). The statement of changes in net assets shows $285.8 million repurchased in the six months to March 31, 2026, which implies about $149.0 million for the December 31, 2025 offer (285.8 minus 136.8, our arithmetic). The September 30, 2025 payable was $137.3 million.

In shares, the fund repurchased 34,349,737 shares in fiscal 2025 (8.3% of the 412.8 million it began with) and 10,828,516 in the six months to March 31, 2026 (2.75% of 393.3 million), our arithmetic from note 11. So the pattern in the filings is: a 25% offer every quarter, repurchases that were 14.8% of opening net assets in fiscal 2024 and have eased to about 5.4% a year at the latest half's pace (our arithmetic), and sales of new shares that, in the latest half, exceeded them. Because the amount repurchased was far below the 25% offered, the March 2026 offer was not prorated at 25% (our reading), but the reports do not say how many shares were tendered.

Why that matters: the 25% is a Board decision. The notes say: “Currently, the Fund intends to offer to repurchase 25% of its outstanding Shares as of or prior to the end of each fiscal quarter. However, repurchase offers in excess of 5% of the Fund’s outstanding Shares for any particular fiscal quarter are entirely within the discretion of the Board of Trustees of the Fund”. The fundamental policy is only 5%. In an oversubscribed offer the fund “may, but is not required to” buy up to 2% more, otherwise it prorates, and the prospectus warns that “the shareholder’s repurchase request will not be given any priority over other shareholders’ requests at this later date.” The notice itself says: “you may be unable to liquidate some of your investment, and you would have to wait until a later date to tender the Shares that the Fund was unable to repurchase.” For comparison, Carlyle Tactical Private Credit Fund offers 5% and has been prorated at 32% to 42% of requests. Funds that hold listed stocks can usually raise cash faster than ones that hold loans, but a 25% offer at full use would be about $2.6 billion at the March 31 net assets (our arithmetic), and the fund's own risk language is that short sales and leverage “are speculative investment practices and involve a high degree of risk.”

Taxes on a sale or tender

The notice says: “Shares tendered pursuant to the Fund’s offer will be treated as a taxable sale of the Shares”, short-term if held under twelve months and long-term if held for more. The financial highlights show no distributions to shareholders in the six months to March 2026 or in fiscal 2023, 2024 or 2025. A loss on a tender can be affected by the wash sale rule if you buy substantially identical shares within 30 days either side (our page on the wash sale rule for REIT, BDC and interval fund tenders). The December offers price on December 31 and pay within seven days: for the offer priced December 31, 2025, proceeds were due “no later than January 7, 2026”, which is after year-end; an IRA owner who needs cash for a required distribution should read our page on required minimum distributions from illiquid IRA assets.

What a reader can do with this

• If you hold it: the number to track is not the 25% in each notice but what the fund repurchased that quarter, which shows up as the payable for shares repurchased in each report. The next one covers September 30, 2026 and is due with the annual report.
• If an adviser proposed it next to a non-traded REIT or BDC: it is a different risk: daily-priced stocks with shorts and swaps, a 1.50% fee plus a 20% incentive fee over a high-water mark, and a distributor owned in part by the firm that runs the strategy. Compare it with a NAV REIT and an interval fund on the same questions: what you can sell, how often, at what price and at what cost.
• If you hold it in a taxable account: a tender is a taxable sale, there were no distributions in fiscal 2023 to 2025, and the incentive fee is already inside NAV.
• What would change the picture: requests above the 5% fundamental minimum, a notice offering less than 25%, a use of the extra 2%, or a fall in NAV that triggers the swap collateral terms.

FAQ

All figures are from SEC filings of ACAP Strategic Fund (CIK 1467631) read on EDGAR on October 23, 2026: the semiannual report on Form N-CSRS for the six months to March 31, 2026 (accession 0001206774-26-000313), the annual report on Form N-CSR for the year to September 30, 2025 (0001206774-25-000753), the prospectus on Form 486BPOS of January 15, 2026 (0001206774-26-000041), seven Form N-23C-3 repurchase notices from February 2025 to August 2026, and seven Form N-PORT filings for December 31, 2024 to June 30, 2026, the last being accession 0001193125-26-374394. The reports do not state shares tendered; percentages, sums, chained returns and implied repurchase amounts are our arithmetic. This is analysis of public documents, not investment, legal or tax advice.