Bluerock Real Estate Fund, Formerly TI+, Trades on NYSE at Sizable Discount to NAV
Bluerock Private Real Estate Fund, Bluerock’s flagship real estate fund formerly known as Bluerock Total Income+ Real Estate Fund, began trading on the New York Stock Exchange under the ticker symbol “BPRE” at a substantial discount to its net asset value.
The $4.3 billion fund closed on Tues., Dec. 16, at $14.70 per share, a 39.7% drop from the previous Friday’s $24.36. On Dec. 18, it closed at $15.50, approximately 36% less than its daily net asset value of $24.37. The next day, it closed at $16.71.
Going public, the fund converted from an interval fund to a listed closed-end fund and according to Bluerock, became the largest real estate-focused listed closed-end fund in the world.
“We believe the fund’s substantial scale will expand its investor base to a broader universe of retail and institutional buyers, strengthening the fund’s visibility and liquidity,” said Bluerock in an FAQ addressing the liquidity event.
Previously reported by AltsWire, alternative asset manager Bluerock received shareholder approval of a key proposal in connection with listing publicly during a special meeting in late September and thus, had anticipated listing on the NYSE by the end of the year. This came after the fund fell short of the needed votes in an earlier special meeting held Sept. 3-4.
Industry observers had speculated that the vote on the fund likely stalled because of its future NAV. A TI+ filing with the U.S. Securities and Exchange Commission stated that it expected the fund to trade at a substantial discount to its current NAV.
Nevertheless, BPRE listed myriad benefits to going public at this time, including:
- Providing daily intraday liquidity to investors, when prior to the conversion, liquidity was only available to the fund’s shareholders on a quarterly basis through repurchase offers for up to 5% of the fund’s total outstanding shares; and
- Allowing the fund’s portfolio management team to focus on investing solely to generate compelling returns as opposed to also focusing on facilitating liquidity.
According to the company, the timing was right to transition TI+ to a listed structure. With private real estate valuations approaching global financial crisis-era lows on an inflation-adjusted basis, “today’s environment is an extremely attractive time to deploy capital.”
“Importantly, listing the fund, and thereby providing for liquidity via the secondary market rather than through direct redemptions of shares, is intended to help prevent the fund itself from becoming a ‘forced seller’ of its underlying semi-liquid real estate-related assets. This preserves the integrity of the underlying investment strategy for all shareholders, providing the portfolio management team with greater flexibility and fewer cash constraints, all which should generally be accretive to performance, with the goal of maximizing shareholder value,” according to Bluerock.
As listed on the company website, the fund seeks to deliver consistent current income while also pursuing long-term capital appreciation. With a focus on low to moderate volatility and a low correlation to broader market fluctuations, BPRE is designed to offer investment exposure beyond the core four real estate sectors and provide access to emerging growth real estate sectors, potentially supporting both stability and growth.
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