Bluerock High Income Fund Implements Noteworthy Fee Reductions

Bluerock High Income Fund Updates Fee Structure

Bluerock High Income Institutional Credit Fund, often referred to as the High Income Fund, has announced an exciting development regarding its fee structure. The fund has decided to lower both its management and incentive fees, an action that underscores its commitment to maximizing returns for investors.

Key Details of the Fee Reduction

Effective from the first day of the year, the High Income Fund has reduced its base management fee by 0.50%, bringing it down to 1.25% annually. Additionally, the Fund’s incentive fee has been revised, now set at 12.5% over a 7.5% annualized yield hurdle, as opposed to the previous 20% over an 8% annualized yield hurdle. This adjustment serves to diminish the fund's total expense ratio significantly, translating to a more favorable investment landscape for all share classes.

Impact on Expense Ratios

The changes in fees will result in a reduced maximum expense ratio for the High Income Fund, specifically 1.85% for Class I shares, 2.10% for Class A, and 2.85% for Class C. With lowered expenses, investors can expect their net returns to improve, a vital factor for current and prospective shareholders alike.

Insights from Leadership

Ramin Kamfar, the founder and CEO of Bluerock, emphasized this fee reduction aligns with their ongoing mission. He stated, "The significant reduction in fees for the High Income Fund is consistent with Bluerock's focus on delivering superior investment outcomes for our customers. Lower fees mean stronger net returns for our investors." Jeffrey Schwaber, the CEO of Bluerock Capital Markets, shared his perspective, noting the strong performance of the Fund in the past year. Schwaber remarked, "On the heels of an extremely strong year, this fee structure enhancement fortifies our commitment to our investors, making this fund a valuable option for credit allocations in their portfolios."

Recent Performance Highlights

In recent announcements, the High Income Fund declared its Q4 distribution rate at an impressive 12.2% annualized yield. Additionally, the Fund’s I share net asset value saw an increase of $0.20 per share, along with a remarkable total return of 13.7% for the past year. This exceptional performance can be attributed to strategic portfolio diversification, which has increasingly leaned towards senior debt positions, offering greater protection against risks while providing ongoing strong yields.

Company Background and Market Position

Bluerock has established itself as a notable player in the alternative asset management sector, with over $18.7 billion in assets under management. For more than two decades, Bluerock has pioneered alternative investment solutions, enabling individual investors to access private credit opportunities, supported by a robust historical performance.

Understanding the High Income Fund

The Bluerock High Income Institutional Credit Fund is classified as a public closed-end interval fund. It primarily aims to generate high current income, seeking attractive long-term risk-adjusted returns. The fund achieves its objectives by investing—both directly and indirectly—into private credit through diversified pools of Senior Secured Loans. Their partnership with WhiteStar Asset Management adds depth to their investment strategy, allowing them access to extensive expertise in the field of CLOs.

Investment Considerations

Investors considering participation in the High Income Fund should acknowledge the minimum investment requirements, which stand at $2,500 for Class A and C shares and $1,000 for retirement plans. Even beyond the exciting developments regarding fee reductions and performance, potential investors need to evaluate the risks and rewards thoroughly, as with any investment. The fluctuating nature of market conditions means that returns can vary significantly based on economic factors.

Frequently Asked Questions

What is the significance of the fee reduction for investors?

The fee reduction enhances net returns for investors, thereby improving overall investment outcomes.

How has the High Income Fund performed recently?

The fund reported a total return of 13.7% for the previous calendar year, reflecting its solid investment strategy.

What investment strategies does the Fund employ?

The Fund invests in private credit and focuses on Senior Secured Loans, ensuring a diversified and strategic approach to yield generation.

Who can invest in the Bluerock High Income Fund?

Individual investors looking for opportunities in institutional private credit can invest, with varying minimum investments based on share classes.

What are the risks associated with investing in the Fund?

Investors should consider risks such as market fluctuations, potential credit defaults, and the liquidity characteristics of the Fund.

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