Bluerock’s Interval Fund Maintains Distribution Rate

April 3, 2018

Bluerock’s Interval Fund Maintains Distribution Rate

April 3, 2018 | Luke Schmidt | Blue Vault

On March 29, 2018, Bluerock’s Total Income+ Real Estate Fund paid a first quarter distribution of $0.3923, representing an annualized distribution rate of 5.25% based on their NAV as of March 28, 2018.  The Company has consistently paid distributions at this rate over the past several years and has now paid distributions totaling $7.43 per share, approximately 30% of the Fund’s inception NAV of $25.00 in 2012.  The NAV has since grown to $29.89 as of March 28, 2018, a 19.6% increase.

Of the sixteen Interval Funds currently covered by Blue Vault, Bluerock’s distribution rate falls directly in the middle based on Blue Vault’s calculated annualized distribution rates.  Distribution rates of the Interval Funds covered range from 0.00% to 7.80%, calculated as annualized distributions divided by the NAV.  The average distribution rate is currently 4.82%.  The median distribution rate comes to 5.28%, putting Bluerock’s Fund squarely in the middle.

Interval Funds are continuing to become more popular and widespread, as they give individual investors access to investments previously only available to institutional investors, all while offering investors the opportunity to cash out their investments periodically, typically 5% of outstanding shares on a quarterly basis.  The structure of these investment vehicles turns what would normally be illiquid, singular alternative investments into what amounts to a portfolio of alternative investments with a liquidity feature, erasing some of the uneasiness felt by investors of having their funds locked up for several years.

Many Interval Funds have seen relatively strong returns over the past two years, but the biggest test of their staying power is likely still ahead of them.  Many of the Interval Funds created in the past several years have yet to experience any serious economic downturn and have enjoyed the strong returns seen by a majority of the market since the end of the most recent recession.  A market correction would hurt returns and lead a large number of investors to seek liquidity at the same time.  This would test how well managers have structured their investment portfolios, likely leading to a clearer separation of good managers versus poor managers.


Learn more about Bluerock Real Estate on the Blue Vault Sponsor Focus page

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Derek Hayes
Blue Vault's Services
April 14, 2016

BlueVault saves a lot of time and effort in obtaining good numbers for analysis and provides good insights to compare against my own.