Bluerock Capital Markets, LLC (“BCM” or “Company”), a distributor of institutional alternative investment products and the dedicated dealer manager for Bluerock (“Bluerock”), reported another monthly record of equity capital inflows with over $240 million in October, eclipsing September’s record flows by 22%, and more than $1.55 billion of new capital raised YTD through October1. The Company’s trailing 3-month fund sales annualize to over $2.35 billion, with trending monthly upward momentum.
The record-setting pace was led by Bluerock’s flagship institutional real estate fund, Bluerock Total Income+ Real Estate Fund (the “Fund or TI+”), with nearly $184 million in new equity inflows in October 2021; up 37% from the prior record set in September1. The Fund has maintained an approximate 20% market share YTD among all interval funds in the direct investments industry with total new capital inflows of over $1 billion YTD through October 20212.
The Company believes that new equity investments into TI+ are being driven by financial advisors’ and investors’ recognition of the strong overall performance with the Fund generating an outsized 19.12% total return to shareholders with a remarkably low 1.6% standard deviation over the trailing 12 months (I-share: TIPWX) as of November 5, 2021.
Further the Bluerock Total Income + Real Estate Fund just celebrated its 9-year anniversary, paid its 35th consecutive quarterly distribution at a 5.25% annualized rate, has generated positive returns in every year and boasts an 8.25% annualized net return since Fund inception (A-share: TIPRX, Oct 2012) as of 10.31.21, thus generating more than 300 basis points of annual appreciation above the annual 5.25% distribution rate3, providing shareholders with attractive income, tax efficiency, growth, an inflation hedge and very low relative volatility since inception.
The Bluerock Total Income+ Real Estate Fund is also a well-documented leader in risk-adjusted performance generating the single highest Sharpe and Sortino Ratios (key risk-adjusted return metrics) of all 6,000+ domestic ‘40 Act funds in the trailing 5-year and since inception time periods as of 10.31.21, per Morningstar.4 The Fund’s peer-leading performance spans multiple time periods with the Fund’s A-share and I-shares both reporting the highest total net returns in the trailing 3-year and 5-year periods among all active real estate sector interval funds as of 10.31.21.5
In addition, the Company also reported a new monthly record of equity inflows for the Bluerock Residential Growth REIT’s (BRG) Non-Traded Series T Preferred Stock program with more than $50 million of new equity investment during October; up 16% from the prior record set in July. BRG holds a robust 47% market share of new investments into non-traded preferred stock within the alternative investment industry and recently paid its 66th consecutive monthly distribution at the stated dividend rate (6% for Series B and 6.15% for Series T) without any principal fluctuation to its shareholders2.
“October represented a notable upsurge in new equity investment into our performance leading suite of institutionally structured funds,” said Jeffrey S. Schwaber, CEO of Bluerock Capital Markets. “Our continuous pace of record monthly inflows and growth across our entire intermediary distribution complex is the culmination of a longstanding, experienced investment management firm consistently delivering on its stated investment objectives. Bluerock is a shareholder-first, conservative manager that has earned the trust of the financial advisory community with long-term performance and excellence of service,” added Schwaber.
1 Includes distribution reinvestment.
2 Source: R.A. Stanger, Market Pulse as of September 2021.
3 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.
4 Source: Morningstar Direct based on daily data from 10.22.2012-10.31.2021, among of all U.S. open-end, closed-end, and exchange traded funds 7,840 funds in the trailing 5-year period, and 6,223 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 Source: Morningstar Direct as of October 31, 2021, real estate interval funds listed on intervalfundtracker.com. TIPRX generated the highest total return of all 10 real estate interval funds per Morningstar data for October 2021, the 3-year period ending October 2021 which included ten funds, and the 5-year period ending October 2021 which included seven funds. Criteria based on trailing total returns for the respective time periods.
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.
6 Inception date of the TI+ Fund Class A share is October 22, 2012 and Class I share is April 1, 2014.
7 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 2.18% for Class A and 1.92% 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, 2022 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. A fund’s performance, especially for very short periods of time, should not be the sole factor in making your investment decisions. Fund performance and distributions are presented net of fees.
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. As of Q2 2021, the value of the underlying real estate held by the securities in which the Fund is invested is approximately $238 billion, including investments managed by Ares, Blackstone, Morgan Stanley, Principal, PGIM, 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.
For copies of TI+ public company filings, please visit the U.S. Securities and Exchange Commission’s website at sec.gov or the Company’s website at bluerockfunds.com.
Definitions
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. Closed end funds also require a brokerage account to buy and sell, while an open-end fund can often be purchased directly through a fund provider.
An ETF, or exchange-traded fund, is a marketable security that tracks a stock index, a commodity, bonds, or a basket of assets. Although similar in many ways, ETFs differ from mutual funds because shares trade like common stock on an exchange. The price of an ETF’s shares will change throughout the day as they are bought and sold. The largest ETFs typically have higher average daily volume and lower fees than mutual fund shares which makes them an attractive alternative for individual investors.
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 $15 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 $3.06 billion as of September 30, 2021. As of Q3 2021, the value of the underlying real estate held by the securities in which the Fund is invested is approximately $252 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.
For copies of TI+ public company filings, please visit the U.S. Securities and Exchange Commission’s website at www.sec.gov or the Company’s website at www.bluerockfunds.com.
Investing in the Bluerock Total Income+ Real Estate Fund involves risks, including the loss of principal. The Fund intends to make investments in multiple real estate securities that may subject the Fund to additional fees and expenses, including management and performance fees, which could negatively affect returns and could expose the Fund to additional risk, including lack of control, as further described in the prospectus.
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.
Investors should carefully consider the investment objectives, risks, charges and expenses of the Bluerock Total Income+ Real Estate Fund. 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
Bluerock is a leading institutional alternative asset manager with more than $10 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 $48 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 capital fundraiser over the prior 3-year period (2018-2020) among all active managing broker dealers in the Direct Investments Industry.8
About Bluerock Residential Growth REIT
Bluerock Residential Growth REIT, Inc. is a real estate investment trust that focuses on developing and acquiring a diversified portfolio of institutional quality highly amenitized live/work/play apartment communities in demographically attractive knowledge economy growth markets to appeal to the renter by choice. BRG’s objective is to generate value through off-market/relationship-based transactions and, at the asset level, through value-add improvements to properties and operations. BRG reports assets in excess of $2.4 billion and approximately 17,900 apartment units. BRG has elected to be taxed as a real estate investment trust (REIT) for U.S. federal income tax purposes.
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 on approximately $2 billion in total property value and 11 million square feet of property.
Bluerock Residential Growth REIT’s Series T Preferred Stock and Bluerock Value Exchange’s programs are offered by Bluerock Capital Markets, LLC.
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.
8 Robert A. Stanger Market Pulse.
