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RiverNorth Flexible Municipal Income Fund
RiverNorth's closed-end municipal fund targets pricing gaps across the $4T muni market, managed by CIO Patrick Galley.
RiverNorth Flexible Municipal Income Fund
RiverNorth Capital Management launched the Flexible Municipal Income Fund in 2018 as a closed-end vehicle trading on the New York Stock Exchange under the ticker RFM. The firm — founded in 2000 and headquartered in West Palm Beach — built its reputation managing opportunistic closed-end fund strategies. President Brian Schmucker and CIO Patrick Galley, who also oversees the broader RiverNorth municipal platform, designed RFM to exploit persistent pricing disconnects in the municipal credit market. The fund deploys across the full municipal capital structure, holding investment-grade general obligation and essential-service revenue bonds, high-yield unrated muni positions, and taxable municipal securities when the after-tax calculus favors them. RFM can also hold closed-end fund shares, giving Galley's team a tool to arbitrage discounts to net asset value that appear in periods of forced selling. Confirmed sector exposures span state and local government debt, charter school financings, healthcare and hospital revenue bonds, and dedicated-tax-backed paper. The fund's geographic footprint concentrates on issuers in California, Texas, New York, and Illinois — the four largest municipal debt markets by issuance volume. RiverNorth manages several municipal closed-end funds, and RFM sits within a broader $5 billion-plus specialist platform as of mid-decade (per the firm's official communications). The manager's core competency is trading closed-end fund structures — buying when discounts widen, tendering when discounts narrow — a discipline the investment team applies across fixed income and equity mandates. September 2023: RiverNorth merged the Flexible Municipal Income Fund with the RiverNorth Managed Duration Municipal Income Fund, folding in its assets under the surviving RFM symbol in a transaction designed to reduce overlapping expenses and increase secondary-market liquidity. The fund's structural distinction is its dual-mandate flexibility — it is neither a pure investment-grade muni vehicle nor a dedicated high-yield fund, but an actively rebalanced portfolio that can migrate between credit-quality segments within a single ticker. The closed-end wrapper locks permanent capital, allowing Galley to hold through drawdowns that force daily-liquid mutual funds to sell, a posture that has historically captured recovery premiums in municipal credit events.
General information
Firm type
Asset Manager
Year founded
2018
AUM
Undisclosed
Location
Region
North America
Country
United States
City
West Palm Beach
Corporate office
West Palm Beach, FL, United States
Principals
Brian Schmucker
President
Patrick Galley
Chief Investment Officer
Sector focus
Frequently asked questions
Who makes portfolio decisions at RiverNorth Flexible Municipal Income Fund?
Patrick Galley serves as Chief Investment Officer and runs the municipal platform, with Brian Schmucker as President of the fund. RiverNorth Capital Management, the adviser, operates a centralized investment committee model. Galley has managed the firm's closed-end municipal strategies since their inception.
How does RFM differ from a standard municipal bond mutual fund?
RFM is a closed-end fund, meaning it issues a fixed number of shares that trade on the NYSE. That permanent-capital structure lets the portfolio manager hold through liquidity crises that force open-end mutual funds to sell into declining markets. The fund also invests in other closed-end funds, a layering strategy that lets the team capture discounts to net asset value when market dislocations appear.
What credit quality does the fund target?
The mandate is flexible by design — the fund can hold AAA-rated general obligation bonds, high-yield unrated muni positions, and taxable municipals. The allocation shifts depending on the relative value Galley's team sees across credit tiers. In tight-spread environments, the fund typically carries a higher investment-grade allocation; when spreads widen, high-yield exposure increases.
Does the fund use leverage?
Yes. As a closed-end fund, RFM can employ leverage to enhance distributable income. The fund typically uses a combination of floating-rate preferred shares and tender-option bond trusts. The leverage ratio varies based on market conditions and the adviser's assessment of funding-cost spreads versus portfolio yields.
Which municipal sectors does the fund explicitly avoid?
RiverNorth's public materials do not list explicitly prohibited sectors, but the portfolio skews toward essential-service revenue bonds — water and sewer, transportation, healthcare — and away from project-finance structures with unproven revenue streams. The team has historically underweighted Puerto Rico and other distressed territories except during restructuring events where recovery value was clearly identifiable.
How did the 2023 merger affect existing shareholders?
In September 2023, RiverNorth merged the Managed Duration Municipal Income Fund into RFM. The surviving fund kept the RFM ticker and the Flexible Municipal Income Fund name. Shareholders of the acquired fund received newly issued RFM shares based on the relative net asset values of each fund at closing. The merger was designed to reduce expense duplication and improve trading liquidity for the combined asset base.
What is RiverNorth's core competency as an asset manager?
RiverNorth Capital built its reputation on closed-end fund arbitrage — buying shares of closed-end funds when they trade at discounts to NAV and exiting when discounts narrow or the fund liquidates. The firm applies this discount-capture discipline across municipal bond, taxable fixed-income, and equity closed-end fund strategies. The manager's operational edge lies in analyzing the structural drivers of closed-end fund pricing rather than forecasting interest rates.
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