Bluerock High Income Institutional Credit Fund Announces Q4 2024 Distribution at a 12.2% Annualized Rate and 13.7% 2024 Total Return

Rhea-AI Summary

Bluerock High Income Institutional Credit Fund announced its Q4 2024 distribution at a 12.2% annualized rate, marking its tenth consecutive quarterly distribution. The Fund achieved a 13.7% total return in 2024 and paid approximately $0.72 per share for Q4 2024 shareholders.

The Fund has strategically diversified its portfolio in 2024, focusing on senior positions within the CLO structure. As of December 31, 2024, it manages approximately $177 million in net assets and maintains positions in 93 collateralized loan obligations, representing about $30 billion in aggregate underlying loan value across over 2,250 senior secured loans.

The Fund's I-Share (IIMWX) performance shows a 13.70% one-year return and a 10.08% return since its inception in June 2022. The Fund has implemented expense limitations until January 31, 2026, capping net annual operating expenses at 2.10% for A shares, 2.85% for C shares, and 1.85% for I shares.

Positive

• 13.7% total return in 2024
• 12.2% annualized distribution rate
• $0.20 per share NAV growth for I shares in 2024
• Portfolio diversification into senior CLO positions reducing risk
• Exposure to over 2,250 underlying senior secured loans across diverse industries

Negative

• High operating expense ratios (3.66% - 4.61% before waivers)
• Reliance on fee waivers and expense absorption by adviser for performance

Insights

Financial Analyst

The Bluerock High Income Fund's Q4 2024 performance metrics reveal compelling results with a 13.7% total return for 2024 and a 12.2% annualized distribution rate. The Fund's strategic shift toward senior CLO positions demonstrates prudent risk management while maintaining robust yield generation. With $177 million in AUM and exposure to over 2,250 senior secured loans through 93 CLOs, the portfolio exhibits strong diversification. The fund's low correlation to traditional fixed income securities (correlation coefficients of 0.04 with bonds, 0.27 with municipals and -0.10 with treasuries) offers valuable portfolio diversification benefits. The expense ratios, while initially high at 3.66%-4.61%, are effectively managed through contractual agreements reducing net expenses to 1.85%-2.85% until January 2026, enhancing the fund's competitive positioning in the high-yield credit space.

Credit Market Specialist

The Fund's portfolio restructuring in 2024 reflects astute market timing, particularly in the CLO market. The strategic positioning in more senior tranches provides enhanced structural protection against potential credit losses while capturing attractive yields in the floating-rate market. The $30 billion aggregate underlying loan value demonstrates significant scale, while the extensive diversification across industries helps mitigate sector-specific risks. The Fund's floating rate nature positions it favorably in the current interest rate environment, offering a hedge against rate volatility. The $0.20 NAV growth per I-share in 2024, combined with the consistent quarterly distributions totaling approximately $7.12 per share since inception, indicates strong underlying portfolio performance and effective active management.

NEW YORK, Jan. 3, 2025 /PRNewswire/ -- Bluerock High Income Institutional Credit Fund (the "Fund" or the "High Income Fund" tickers: IIMAX, IIMCX, IIMWX) announced that for the fourth quarter 2024, the Fund paid its tenth consecutive quarterly regular distribution at a rate of 3.1% or 12.2% annualized.¹ Shareholders invested for the entire quarter will receive a total distribution amount of approximately $0.72 per share, an amount based on the average daily NAV/share over the quarter. The Fund's thirteen total distributions since inception 6.21.2022 total approximately $7.12/share. 

The Fund has strategically diversified the portfolio in 2024, investing in more senior positions within the CLO capital structure, effectively reducing potential risk while simultaneously delivering double-digit yield generation, and thus improving the risk-adjusted return profile of the Fund.

"The High Income Fund enjoyed an extremely strong 2024, posting a 13.7% total return and 12.2% distribution rate while growing the Fund's I share (IIMWX) NAV $0.20 per share. Headed into 2025, we are seeing exciting investment opportunities, particularly in structured credit debt pools which we believe will deliver strong yields and favorable loss protection for our investors," said Jeffrey Schwaber, CEO of Bluerock Capital Markets. The Fund capitalizes on the floating rate nature of senior secured loans to generate meaningful current income in changing interest rate environments and provides a low correlated investment option to other fixed income securities such as bonds, municipals, and treasuries.²

The Fund currently maintains underlying positions in 93 collateralized loan obligations representing approximately $30 billion in aggregate underlying loan value with exposure to over 2,250 underlying senior secured loans across multiple diverse industries (underlying holdings as of 9.30.2024 and are subject to change at any time and should not be considered investment advice). Net assets under management for the High Income Fund are approximately $177 million as of December 31, 2024.

High Income Fund I-Share Net Performance

	Performance Through 12.31.2024
	One Year	Since Inception*
High Income Fund Class I	13.70 %	10.08 %

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.
* Inception date of the Fund is June 21, 2022.

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 1-844-819-8287. Past performance is no guarantee of future results. 

The total annual fund operating expense ratio, gross of any fee waivers or expense reimbursements is 3.81% for Class A share, 4.61% for C share and 3.66% for the I share effective January 1, 2025. The performance data quoted here represents past performance. Current performance may be lower or higher than the performance data quoted. Past performance is no guarantee of future results. Investment return and principal value will fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. The Fund's investment adviser has contractually agreed to reduce its fees and/or absorb expenses of the fund, at least until January 31, 2026, to ensure that the net annual fund operating expenses will not exceed 2.10% for A share, 2.85% for C share and 1.85% for the I share, subject to possible recoupment from the Fund in future years. In addition to the contractual obligations under its expense limitation agreement, the Adviser, on a purely voluntary basis, has borne all of the operating expenses of the Fund and waived its entire management fee since inception. Such operating expenses and management fees voluntarily paid or waived during this period are not subject to recoupment from the Fund in future years. Without such waiver of fees and payment of expenses by the Adviser, expenses of the Fund would have been higher and the Fund's returns would have been lower.

¹ 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. Effective October 1, 2024, the Fund expects to pay distributions at a floating rate reflective of the underlying investment income generated by the Fund's investments each quarter. Such distributions are accrued daily and paid quarterly. This distribution policy is subject to change. The level of quarterly distributions (including any return of capital) is not fixed and all or a portion of a distribution may consist of a return of capital. Shareholders should not assume that the source of a distribution from the Fund is net profit. 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 Fund will continue to declare distributions or that they will continue at these rates.

² Source: Morningstar Direct daily returns. Morningstar LSTA US Leveraged Loan Index (senior secured loans) correlation to S&P US Aggregate Bond Index (bonds), ICE BofA US Muni Index (municipals), ICE BofA US Treasury Index (treasuries) is 0.04, 0.27 and -0.10, respectively common inception through 9.30.24.    

About Bluerock High Income Institutional Credit Fund
The Bluerock High Income Institutional Credit Fund (the "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 seeks to accomplish its objectives by investing, directly and indirectly, in private credit through actively managed pools of diversified Senior Secured Loans known as Collateralized Loan Obligations (CLOs). 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. An investment in the Fund seeks to provide investors with the following potential benefits across various market cycles. The minimum investment in the Fund is $2,500 ($1,000 for retirement plans) for Class A and C shares. For copies of the Fund's 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.

Risk Disclosures

Not FDIC Insured | No Bank Guarantee | May Lose Value

Investing in the Fund involves risks, including the risk that you may receive little or no return on your investment, and that you may lose part or all of your investment. This is neither an offer to sell nor a solicitation to purchase any security. 

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 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 bluerockfunds.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 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.

For more information, contact Bluerock Capital Markets at 877.826.BLUE (2583).

Collateralized Loan Obligations (CLOs): A form of securitization where payments from multiple business loans (most typically senior secured corporate loans) are pooled together and passed on to different classes of owners in various tranches.

Correlation: This indicates the strength and direction of a linear relationship between two random variables. The value will range between -1 and 1.

Senior Secured Loans (SSLs): Debt obligations issued by corporations that are typically backed ("secured") by a company's assets. SSLs sit at the top of the company's capital structure and have the highest priority claim on the borrower's assets.

View original content to download multimedia:https://www.prnewswire.com/news-releases/bluerock-high-income-institutional-credit-fund-announces-q4-2024-distribution-at-a-12-2-annualized-rate-and-13-7-2024-total-return-302342034.html

SOURCE Bluerock High Income Institutional Credit Fund

FAQ

What was IIMAX's distribution rate for Q4 2024?

The Fund paid a distribution rate of 3.1% for Q4 2024, equivalent to 12.2% annualized.

How much total return did IIMAX generate in 2024?

The Fund generated a 13.7% total return in 2024.

What is IIMAX's total assets under management as of December 2024?

The Fund's net assets under management were approximately $177 million as of December 31, 2024.

How many CLO positions does IIMAX currently hold?

The Fund maintains positions in 93 collateralized loan obligations representing approximately $30 billion in aggregate underlying loan value.

What is IIMAX's performance since inception?

The Fund's I-Share class has generated a 10.08% return since its inception on June 21, 2022.