Bluerock Capital Markets Logs a Record $4+ Billion in Annual Capital Raise in 2022, Up 92% Over 2021’s Record Inflows
New York, NY (January 17, 2023) – Bluerock Capital Markets, LLC (“BCM” or “Company”), a distributor of institutional alternative investment products and the dedicated dealer manager for Bluerock (“Bluerock”), announced today a new annual record capital raise of over $4 billion in 2022,1 resulting in the top spot for new equity capital exclusively in the RIA/independent broker-dealer channel, the highest inflows of all real estate interval funds and more than 4% of all new equity raised in the entire Direct Investment Industry for 3rd highest overall (all rankings as of November 2022, most recent data available).2
BCM’s record inflows represents a notable 92% year-over-year increase from 2021’s record sales driven by strong sales of over $3.8 billion in Bluerock’s flagship interval fund, Bluerock Total Income+ Real Estate Fund, up 164% year-over-year,1 the successful launch of the Company’s industrial REIT, Bluerock Industrial Growth REIT, and continued strong sales in Bluerock Value Exchange, Bluerock’s 1031 division.
“Entering 2022, we expressed our bullish outlook for institutional private real estate to outperform the broader markets as the sector has historically generated above average returns during high interest rate and high inflationary environments (notably 55% and 22% above historic average, respectively) and this trend proved correct again during the year”, said Jeffrey S. Schwaber, CEO of Bluerock Capital Markets. Bluerock Total Income+ finished 2022 up approximately 10% on the year while public REITs were down 22% and most peer funds were flat to negative. “Given the underlying healthy fundamentals of private real estate including broad-based high occupancy rates, low levels of debt, and an undersupply to demand, we believe private real estate will continue to weather the expected economic headwinds in 2023 and will be poised for the next upcycle, particularly in our high conviction sectors including the apartment, life-science, industrial and single-family rental home sectors”, added Schwaber.
2022 Highlights of Bluerock’s Investment Programs Include:
The Bluerock Total Income+ Real Estate Fund (“TI+ Fund” or “Bluerock Total Income+”) celebrated its 10-year anniversary in October 2022 and became the largest real estate-related interval as ranked by net assets with approximately $7 billion in net assets (the first real estate interval fund to achieve this milestone) and the 3rd largest interval fund among all 77 active interval funds, as of December 2022.3 TI+ Fund had the highest capital inflows among all active interval funds since 2020 within the direct investment industry.2 TI+ Fund is invested in approximately $394 billion of underlying private institutional real estate.
TI+ has delivered 10+ consecutive years of positive returns with no down years, and an impressive 8.71% annualized return with a remarkably low 1.9% standard deviation since inception (A-share (TIPRX), no load, 10.22.12), and a 10.14% net total return in 2022 (I-share (TIPWX).
Further, Bluerock Total Income+ has been a consistent leader in risk-adjusted performance generating the single highest Sharpe and Sortino Ratios (key measures of risk-adjusted returns) among all 6,000+ domestic ‘40 Act funds in the trailing 5-year and since inception time periods as of 12.31.22, per Morningstar.4 Past performance is not a guarantee of future results.
The TI+ Fund has paid 40 consecutive quarterly distributions at a 5.25% annualized rate5 (approximately 63% has been tax deferred since inception) and has generated nearly 350 basis points (3.50%) of annual appreciation over and above the distributions since inception in 2012. Based on initial share price of $25.00 per share, TIPRX has paid more than $15.00 per share in total distributions to its shareholders. In addition to these quarterly distributions, TIPRX NAV has grown more than 40% from $25 to $35.14 per share (as of 12.31.22).
Bluerock Fund Advisor, TI+ Fund’s Advisor, was named a finalist for Asset Manager of the Year (AUM under $25 billion) by Barron’s and Money Management Institute. The award recognizes innovation and leadership in the investment advisory solutions industry and honors the asset manager that best exemplifies innovation in delivering better outcomes for investors and financial advisors.
* Returns would have been lower if the calculation reflected the load.
Bluerock Residential Growth REIT (BRG) completed the sale of its multifamily assets to affiliates of Blackstone for $24.25 per share in an all-cash transaction valued at $3.6 billion. The transaction resulted in a 145% premium for shareholders – the largest ever achieved for a public REIT M&A transaction6 – excluding the value of our single-family rental business (see BHM below). BRG ranked #1 in total shareholder returns among all public REITs for 1-2-3-and-4-year periods and #2 for the 5-year period (approx. 160 REITs).7 In connection with the sale to Blackstone, all Series of BRG preferred stock (B, C, D, T) were redeemed in cash at full stated / par value.
In conjunction with the Blackstone sale, Bluerock separately spun-out BRG’s rapidly expanding single-family rental business into a newly formed publicly traded REIT – Bluerock Homes Trust (NYSE-American: BHM). The REIT was launched with $750 million in assets and approximately 4,000 single-family homes in attractive economy growth & lifestyle markets across the U.S.
Bluerock Industrial Growth REIT (BIGR), a private non-traded REIT focused on the industrial sector, continued its growth of the portfolio and pipeline.
Bluerock High Income Institutional Credit Fund (“HI Fund”) was launched in Q2 2022 to provide individual investors access CLO equity, which has been an institutionally only asset class that has traditionally delivered both high income and very strong total returns through several market cycles, including inflationary environments. The HI Fund was seeded with approximately $85 million in assets and eight high-performing CLO positions with approximately $84 in founder’s equity by the Fund’s Advisor and Sub-Advisor and is currently comprised of 12 high-performing CLO positions with $6 billion of underlying loan exposure (as of 9.30.2022).
Finally, Bluerock Value Exchange (BVEX) acquired more than $211 million of new real estate and during the year and launched its first DST programs in the single-family residential and industrial sectors. BVEX also successfully sold five individual DST programs in 2022 comprised of more than $393 million in value returning more than $199 million in proceeds to investors from an initial $127 million of combined equity investments resulting in a 16.7% combined average annual return.
1 Includes distribution reinvestment.
2 Source: R.A. Stanger, Market Pulse as of November 2022; exclusively RIA/independent broker dealer intermediary distribution and exclusive of institutionally distributed programs. Total alternative industry sales of $98.67 billion.
3 Intervalfunds.org and Bloomberg.
4 Source: Morningstar Direct based on daily data as of 12.31.2022, among of all U.S. open-end, closed-end, and exchange traded funds 8,098 funds in the trailing 5-year period, and 6,020 funds since inception) TIPRX generated the highest annualized Sharpe Ratio and annualized Sortino Ratio; compiled by Bluerock Fund Advisor, LLC. TIPRX, no load. Sharpe Ratio, and Sortino Ratio are only two forms of performance measure. The Sharpe Ratio and Sortino Ratio would have been lower if the calculation reflected the load. The funds considered in the analysis have significant differences, including various objectives, strategies, liquidity, and fees (see definitions below). Past performance does not guarantee future results.
5 The Fund’s distribution policy is to make quarterly distributions to shareholders. The level of quarterly distributions (including any return of capital) is not fixed. However, this distribution policy is subject to change. The Fund’s distribution amounts were calculated based on the ordinary income received from the underlying investments, including short-term capital gains realized from the disposition of such investments. Shareholders should not assume that the source of a distribution from the Fund is net profit. All or a portion of the distributions consist of a return of capital based on the character of the distributions received from the underlying holdings, primarily Real Estate Investment Trusts. The final determination of the source and tax characteristics of all distributions will be made after the end of the year. Shareholders should note that return of capital will reduce the tax basis of their shares and potentially increase the taxable gain, if any, upon disposition of their shares. There is no assurance that the Company will continue to declare distributions or that they will continue at these rates (distributions historically 63% tax deferred from 1.1.2013-12.31.21.
6 BRG shareholder 145% premium is based on the unaffected closing stock price on September 15, 2021, the date prior to a media article reporting that BRG was exploring strategic options including a sale. BHM implied Net Asset Value estimated of $5.60 is based on the midpoint of the valuation range provided by Duff & Phelps, independent financial advisor to the Company’s board of directors.
7 Source: KeyBanc, September 2022.
TI+ Fund Class A and I-Share Net Performance
|TI+ Fund Class A|
|TI+ Fund Class A with Max Sales Charge9|
|TI+ Fund Class I|
Returns presented are total net return: expressed in percentage terms, the calculation of total return is determined by taking the change in price, reinvesting, if applicable, all income and capital gains distributions during the period, and dividing by the starting price. Returns greater than one year are annualized. A fund’s performance, especially for very short periods of time, should not be the sole factor in making your investment decisions.
8 Inception date of the TI+ Fund Class A share is October 22, 2012 and Class I share is April 1, 2014.
9 The maximum sales charge for the Class A shares is 5.75%. Investors may be eligible for a waiver or a reduction in the sales charge.
The performance data quoted here represents past performance. Current performance may be lower or higher than the performance data quoted above. Investment return and principal value will fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. For performance information current to the most recent month end, please call toll-free 1-888-459-1059. Past performance is no guarantee of future results.
The total annual fund operating expense ratio, gross of any fee waivers or expense reimbursements, is 2.09% for Class A and 1.83% for Class I. The Fund’s investment advisor has contractually agreed to reduce its fees and/or absorb expenses of the fund, at least until January 31, 2023 for Class A and I shares, to ensure that the net annual fund operating expenses will not exceed 1.95% for Class A and 1.70% for Class I, per annum of the Fund’s average daily net assets attributable to Class A and Class I shares, respectively, subject to possible recoupment from the Fund in future years. Please review the Fund’s Prospectus for more detail on the expense waiver. Fund performance and distributions are presented net of fees.
A basis point is a measurement with one basis point equal to 1/100th of 1%.
An open-end fund is a type of mutual fund that does not have restrictions on the amount of shares the fund can issue. The majority of mutual funds are open-end, providing investors with a useful and convenient investing vehicle. Shares are bought and sold on demand at their net asset value (NAV), which is based on the value of the fund’s underlying securities and is calculated at the end of the trading day.
A closed-end fund is organized as a publicly traded investment company by the Securities and Exchange Commission (SEC). Like a mutual fund, a closed-end fund is a pooled investment fund with a manager overseeing the portfolio; it raises a fixed amount of capital through an initial public offering (IPO). The fund is then structured, listed and traded like a stock on a stock exchange. Unlike open-end funds, closed-end funds trade just like stocks. While open-end funds are priced only once at the end of the day, closed-end funds are traded and priced throughout the day.
Sharpe Ratio: Measurement of the risk-adjusted performance calculated by subtracting the annualized risk-free rate (3-month Treasury Bill) from the annualized rate of return for a portfolio and dividing the result by the annualized standard deviation of the portfolio returns.
Sortino Ratio: Measurement of risk-adjusted performance and a modification of the Sharpe ratio to measure the return to “bad” volatility (i.e., volatility caused by negative returns considered bad or undesirable by an investor), calculated as the excess return over the risk-free rate divided by the downside semi-variance.
Annual standard deviation is the daily percentage change in an investment. Standard deviation shows how much variation from the average exists with a larger number indicating the data points are more spread out over a larger range of values.
Bluerock is a leading institutional alternative asset manager with more than $16 billion of acquired and managed assets headquartered in Manhattan with regional offices across the U.S. Bluerock principals have a collective 100+ years of investing experience with more than $120 billion real estate and capital markets experience and have helped launch leading private and public company platforms.
About Bluerock Capital Markets
Bluerock Capital Markets, LLC (BCM) serves as the managing broker dealer for Bluerock and is a member of FINRA/SIPC. Formed in 2010, BCM distributes a broad range of institutional investment products with potential for growth, income, and tax benefits exclusively through broker dealers and investment professionals including the Bluerock Total Income+ Real Estate Fund, Bluerock Residential Growth REIT, Inc., and programs sponsored by Bluerock Value Exchange, LLC. BCM was a top five capital fundraiser over the prior 4-year period (2019-2022) among all active managing broker dealers in the Direct Investments Industry (Source: Robert A. Stanger Market Pulse, as of November 2022).
Investors should carefully consider the investment objectives, risks, sales charges and expenses of the Bluerock Total Income + Real Estate Fund and the Bluerock High Income Institutional Credit Fund (the ”Funds”) before investing. This and other important information about the Fund is contained in the prospectus, which can be obtained online at bluerockfunds.com. The prospectus should be read carefully before investing.
About Bluerock Total Income+ Real Estate Fund
The Bluerock Total Income+ Real Estate Fund offers individual investors access to a portfolio of institutional real estate securities managed by top-ranked fund managers. The Fund seeks to provide a comprehensive real estate holding designed to provide a combination of current income, capital preservation, long-term capital appreciation and enhanced portfolio diversification with low to moderate volatility and low correlation to the broader equity and fixed income markets. The Fund utilizes an exclusive partnership with Mercer Investment Management, Inc., the world’s leading advisor to endowments, pension funds, sovereign wealth funds and family offices globally, with over 3,300 clients worldwide, and over $16.8 trillion in assets under advisement.
The Bluerock Total Income+ Real Estate Fund is a closed-end interval fund that invests the majority of its assets in institutional private equity real estate securities that are generally available only to institutional investors capable of meeting the multi-million dollar minimum investment criteria. Net assets under management for TI+ are approximately $7.0 billion as of December 31, 2022. As of Q4 2022, the value of the underlying real estate held by the securities in which the Fund is invested is approximately $394 billion, including investments managed by Ares, Blackstone, Morgan Stanley, Principal, Prudential, Clarion Partners, Invesco and RREEF, among others. The minimum investment in the Fund is $2,500 ($1,000 for retirement plans) for Class A, C, and L shares and $1,000,000 for the Class I.
The Fund will concentrate its investments in real estate industry securities. The value of the Fund’s shares will be affected by factors affecting the value of real estate and the earnings of companies engaged in the real estate industry. These factors include, among others: (i) changes in general economic and market conditions; (ii)changes in the value of real estate properties; (iii) risks related to local economic conditions, overbuilding and increased competition; (iv) increases in property taxes and operating expenses; (v) changes in zoning laws; (vi)casualty and condemnation losses; (vii) variations in rental income, neighborhood values or the appeal of property to tenants; (viii) the availability of financing; (ix) climate change; and (x) changes in interest rates. Many real estate companies utilize leverage, which increases investment risk and could adversely affect a company’s operations and market value in periods of rising interest rates. The value of securities of companies in the real estate industry may go through cycles of relative under-performance and over-performance in comparison to equity securities markets in general.
Additional risks related to an investment in the Fund are set forth in the “Risk Factors” section of the prospectus, which include, but are not limited to the following: convertible securities risk; correlation risk; credit risk; fixed income risk; leverage risk; risk of competition between underlying funds; and preferred securities risk.
Limited liquidity is provided to shareholders only through the Fund’s quarterly repurchase offers for no less than 5% of the Fund’s shares outstanding at net asset value. There is no guarantee that shareholders will be able to sell all of the shares they desire in a quarterly repurchase offer. Since inception, the Fund has made 40 repurchase offers, of which 35 have resulted in the repurchase of all shares tendered, four have resulted in the repurchase of less than all shares tendered, and one is pending. In connection with the November 2022 repurchase offer, the Fund repurchased all shares tendered for repurchase. Quarterly repurchases by the Fund of its shares typically will be funded from available cash or sales of portfolio securities. The sale of securities to fund repurchases could reduce the market price of those securities, which in turn would reduce the Fund’s net asset value.
The ability of the Fund to achieve its investment objective depends, in part, on the ability of the Advisor to allocate effectively the Fund’s assets across the various asset classes in which it invests and to select investments in each such asset class. There can be no assurance that the actual allocations will be effective in achieving the Fund’s investment objective or delivering positive returns.
An investment in shares represents an indirect investment in the securities owned by the Fund. The value of these securities, like other market investments, may move up or down, sometimes rapidly and unpredictably. The Fund is “non-diversified” under the Investment Company Act of 1940 and therefore may invest more than 5% of its total assets in the securities of one or more issuers. As such, changes in the financial condition or market value of a single issuer may cause a greater fluctuation in the Fund’s net asset value than in a “diversified” fund. The Fund is not intended to be a complete investment program.
The Bluerock Total Income+ Real Estate Fund is distributed by ALPS Distributors Inc. Bluerock Capital Markets, LLC is not affiliated with ALPS Distributors, Inc. or Mercer Investment Management, Inc. ALPS Distributors, Inc. is not affiliated with Bluerock Residential Growth REIT or Bluerock Value Exchange.
About Bluerock High Income Institutional Credit Fund
The Bluerock High Income Institutional Credit Fund (the “HI Fund” or “Fund”) is a public, closed-end interval fund that provides individual investors access to a rapidly growing institutional asset class. The Fund’s primary investment objective is to generate high current income, while secondarily seeking attractive, long-term risk-adjusted returns, with low correlation to the broader markets. The Fund has partnered with WhiteStar Asset Management, LLC, whose management team has overseen the issuance of $40 billion in CLOs since 2001, to serve as sub-advisor to the Fund.
The Bluerock High Income Institutional Credit Fund is a closed-end interval fund that invests the majority of its assets directly and indirectly in private credit through actively managed pools of diversified Senior Secured Loans known as Collateralized Loan Obligations (CLOs). Net assets under management for HI Fund are approximately $85 million as of December 31, 2022. As of Q3 2022, the value of the underlying loan exposure by the securities in which the Fund is invested is approximately $6 billion. The minimum investment in the Fund is $2,500 ($1,000 for retirement plans) for Class A and C shares and $1,000,000 for the Class I.
Investors should carefully consider the investment objectives, risks, sales charges and expenses of the Bluerock High Income Institutional Credit Fund (the “Fund”). This and other important information about the Fund is contained in the prospectus, which can be obtained online by visiting bluerock.com/hi-fund/documents. The prospectus should be read carefully before investing.
Past performance is not a guarantee of future results. The ability of the Fund to achieve its investment objective depends, in part, on the ability of the Advisor and Sub-Advisor to allocate effectively the assets of the Fund among the various available investment opportunities. There can be no assurance that the actual allocations will be effective in achieving the Fund’s investment objective or delivering positive returns. There is no guarantee that the Fund’s investment strategies will work under all market conditions. Statements relating to the performance of the Fund contained herein are historical and the Fund’s performance subsequent to the date as of which such statements were made may differ materially. Updated performance data for the Fund is available at bluerock.com/hi-fund/performance.
Please note that the performance data relating to various indices included herein is for informational purposes only. You cannot invest directly in an index. Index performance does not represent actual fund or portfolio performance. Performance of a fund or portfolio may differ significantly from the performance of index holding the same securities. Index performance assumes reinvestment of dividends but does not reflect any management fees, transaction costs or other expenses that would be incurred by a fund or portfolio, or brokerage commissions on transactions in fund shares. Such fees, expenses, and commissions would likely reduce returns.
The Fund is a closed-end interval fund, the shares have no history of public trading, nor is it intended that the shares will be listed on a public exchange at this time. No secondary market is expected to develop for the Fund’s shares. Limited liquidity is provided to shareholders only through the Fund’s quarterly repurchase offers for no less than 5% of the Fund’s shares outstanding at net asset value. There is no guarantee that shareholders will be able to sell all of the shares they desire in a quarterly repurchase offer. Quarterly repurchases by the Fund of its shares typically will be funded from available cash or sales of portfolio securities. The sale of securities to fund repurchases could reduce the market price of those securities, which in turn would reduce the Fund’s net asset value. The Fund is suitable only for investors who can bear the risks associated with the limited liquidity of the Fund and should be viewed as a long-term investment.
Investors in the Fund should understand that the net asset value (“NAV”) of the Fund will fluctuate, which means the value of your shares at any point in time may be worth less than the value of your original investment, even after taking into account any reinvestment of dividends and distributions. An investment in shares represents an indirect investment in the securities owned by the Fund. The value of these securities, like other market investments, may move up or down, sometimes rapidly and unpredictably. The Fund is “non-diversified” under the Investment Company Act of 1940 and therefore may invest more than 5% of its total assets in the securities of one or more issuers. As such, changes in the financial condition or market value of a single issuer may cause a greater fluctuation in the Fund’s net asset value than in a “diversified” fund. The Fund is not intended to be a complete investment program.
Because the Fund invests primarily in debt-anchored instruments and securities, the value of your investment in the Fund may fluctuate with changes in interest rates. The Fund may invest in senior secured debt and CLOs. Substantial increases in interest rates may cause an increase in loan defaults and the value of the Fund’s assets may also be affected by other uncertainties such as economic developments affecting the market for senior secured term loans or uncertainties affecting borrowers generally. There is a risk that the borrowers under the Senior Secured Loans may not make scheduled interest and/or principal payments on their loans and/or debt securities, which may result in losses or reduced cash flow to the Fund, either or both of which may cause the NAV of, or the distributions by, the Fund to decrease. CLOs carry additional risks, including but not limited to (i) the possibility that distributions from collateral will not be adequate to make interest or other payments; (ii) the quality of the collateral may decline in value or default; (iii) the possibility that the Fund’s investments in CLOs are subordinate to other classes or tranches thereof; and (iv) the complex structure of the CLO investment may not be fully understood at the time of investment and may produce disputes with the issuer, holders of senior tranches or other unexpected investment results. In addition, the nature of the Fund’s investment strategy also subjects it to various risks, including credit risk (the debtor may default), liquidity risk (the investment may not be able to be sold at an advantageous time or price) and prepayment risk (the debtor may pay its obligation early, reducing the amount of interest payments). All potential investors should read the Risk Factors section of the prospectus for additional information related to the risks associated with an investment in the Fund.
The Bluerock High Income Institutional Credit Fund is distributed by ALPS Distributors, Inc (ALPS). Bluerock Credit Fund Advisor, LLC is not affiliated with ALPS, or WhiteStar Asset Management.
This material is provided for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product or be relied upon for any other purpose. Certain information contained herein has been obtained from sources deemed to be reliable, but has not been independently verified. This material represents views as of its date and is subject to change without notice of any kind.
About Bluerock Homes Trust
Bluerock Homes Trust (NYSE-American: BHM) is an externally managed real estate investment trust (REIT) formed to assemble a portfolio of infill first-ring suburban single-family rental homes in knowledge-economy and high quality of life growth (“Knowledge/Quality”) markets across the United States, targeting middle-market single-family home renters in the Sunbelt and the West, which we expect should have healthy long-term demand fundamentals for single-family rentals.
About Bluerock Industrial Growth REIT
Bluerock Industrial Growth REIT, Inc. (“BIGR”) is a private, non-traded real estate investment trust (REIT) that acquires Class A and B industrial properties including distribution centers, warehouses, logistics and light manufacturing industrial properties, primarily in growth markets across the United States. BIGR has elected to be taxed as a real estate investment trust (REIT) for U.S. federal income tax purposes.
THIS IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY THE SECURITIES DESCRIBED HEREIN. AN OFFERING IS MADE ONLY BY THE PRIVATE PLACEMENT MEMORANDUM (“MEMORANDUM). THIS SALES AND ADVERTISING LITERATURE MUST BE READ IN CONJUNCTION WITH OR ACCOMPANIED BY A MEMORANDUM FOR BLUEROCK INDUSTRIAL GROWTH REIT (“BIGR”) IN ORDER TO UNDERSTAND FULLY ALL OF THE IMPLICATIONS AND RISKS OF THE OFFERING OF SECURITIES TO WHICH IT RELATES. A COPY OF THE MEMORANDUM MUST BE MADE AVAILABLE TO YOU IN CONNECTION WITH THE OFFERING. NEITHER THE ATTORNEY GENERAL OF THE STATE OF NEW YORK NOR ANY OTHER STATE REGULATORS HAS PASSED ON OR ENDORSED THE MERITS OF THE OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
About Bluerock Value Exchange
Bluerock Value Exchange is a national sponsor of syndicated 1031-exchange offerings with a focus on Premier Exchange Properties™ that seek to deliver stable cash flows and potential for value creation. Bluerock has structured 1031 exchanges of approximately $2.5 billion in total property value and 12.5 million square feet of property.
Bluerock Value Exchange and Bluerock Industrial Growth REIT’s programs are offered by Bluerock Capital Markets, LLC.