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Bluerock Interval Fund Reports 15% Trailing 12-Month Return

Bluerock High Income Institutional Credit Fund reported annualized returns of nearly 15% for each of its share classes, as of the close of the first quarter 2024. The fund offers Class A, Class C and Class I shares, each of which realized annualized returns of 14.87% (Class A) or 14.88% (Class C and I).  Since inception of the fund on June 21, 2022, each shares class has realized a return of approximately 9.4% (Class A: 9.38%, Class C: 9.42%, Class I: 9.41%), according to Bluerock. Returns are net of all fees.

The interval fund, which currently pays an 11% annualized dividend rate, is more than 99% invested in senior secured loans via collateralized loan obligations. These are floating rate loans issued to large corporations and have a first lien claim on all company assets and typically retain the highest priority of repayment. The fund says that through effective credit analysis and active management, it has been able to generate distributions to its investors of 11% annualized since fall 2023, as well as an approximate additional 4% in special distributions in the trailing 12 months.

“Credit investments, when managed correctly, currently have the potential to generate double-digit yields and total returns comparable to long-term equities, but with lower volatility than is typically exhibited in the public debt and equity markets,” said Jeffrey Schwaber, chief executive officer of Bluerock Capital Markets. “The fund invests in CLOs which comprise hundreds of underlying senior secured loans diversified across a variety of companies and industries. By strategically investing in various positions across the CLO capital stack, the fund seeks to increase its overall risk-adjusted return profile and generate alpha by risk avoidance.”

“Further, unlike some other closed-end credit funds, the fund is not utilizing leverage to enhance returns which we also see as an important risk mitigator. We believe investors in today’s market want meaningful income while minimizing potential downside and risk in their credit-focused investments,” added Schwaber.

The fund currently maintains underlying positions in 47 CLOs representing more than $27 billion of underlying loan value with exposure to approximately 1,600 underlying senior secured loans across multiple industries. Net assets under management for the fund were approximately $126 million as of March 29, 2024.

The Bluerock High Income Institutional Credit Fund is a public, closed-end interval fund that provides individual investors access to a rapidly growing institutional asset class. It invests, directly and indirectly, in private credit through actively managed pools of diversified senior secured loans known as collateralized loan obligations. 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-adviser to the fund.

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