Bluerock Income Plus Fund

Verdict

• ALIGNMENT: Average

  • Bluerock does not charge performance fees, slightly reducing the risk of misaligned manager incentives. However, there is little public information about how much of their own money executives have invested into the fund, raising uncertainty about their true financial alignment with outside investors.
  • Backed by Mercer’s institutional reputation, the fund benefits from credible oversight, but this alone does not ensure that management’s interests are directly linked to investor outcomes. Lack of visible “skin in the game” could reduce motivation to maximize long-term returns.

• Performance: Below Average

  • The fund has produced a 5.79% annualized return since inception (with load), which is steady and reliable for those in search of income. The consistency of 50 straight quarterly distributions gives confidence in the fund’s short-term income focus.
  • Despite regular payouts, the overall return is modest, and limited capital appreciation keeps total wealth-building potential muted. For investors seeking meaningful long-term growth, this below-average performance lags behind public REITs and other more growth-oriented real estate investments.

• Market Risk: Average

  • With holdings diversified across property types and geographies, the fund seeks to cushion against downturns in any one asset class or market region, lowering the risk from localized volatility or asset shocks.
  • Even so, broader market cycles and shifts—such as rising interest rates, economic slowdowns, or falling commercial real estate values—can still significantly affect portfolio returns, as with most real estate investments.

• Business Risk: Above Average

  • The interval fund structure and limited quarterly redemption cycles introduce operational complexity, requiring careful ongoing management to coordinate cash flows and redemption handling.
  • Bluerock’s heavy reliance on selecting third-party private real estate managers for underlying investments adds extra risk; the fund’s performance is dependent on the expertise, due diligence, and quality control of multiple external teams.

• Debt Risk: Above Average

  • The fund uses leverage both directly and in its holdings, which can magnify gains but also increases exposure to downside risk. This layered approach to borrowing makes the fund more sensitive to rising interest rates and changes in credit conditions.
  • Despite maintaining relatively conservative leverage ratios, the dual levels of debt can amplify challenges during economic downturns or periods of tightening financial markets, heightening overall risk.

• Liquidity Risk: Above Average

  • Liquidity is constrained by the fund’s interval structure, offering redemptions only on a quarterly basis and limiting those redemptions to between 5% and 25% of total fund assets. Investors needing their capital quickly may face delays or partial payouts.
  • During market distress, the fund is empowered to suspend redemptions entirely, which could leave investors unable to access their investment when needed most. This restriction is particularly worth noting for HENRY investors with near-term liquidity concerns.

• Transparency: Average

  • Investors get daily NAV pricing and regular quarterly reports, providing a decent but not exceptional level of visibility into fund performance and underlying portfolio details.
  • However, valuations for private real estate assets rely on appraisals rather than actual market sales, which can introduce valuation delays and potential mismatches between reported NAV and real, real-time market values. This can make it harder to monitor true performance, especially in rapidly changing environments.

• Disclaimer

  All Rights Reserved. The data and analyses contained herein are the property of Noyack and are protected by copyright and other intellectual property laws. The information provided is intended solely for informational purposes and should not be construed as investment advice. It is not an offer to buy or sell a security, and it is not intended to be used as the sole basis for any investment decision. The information contained in this document is believed to be accurate and reliable based on sources believed to be reliable, but Noyack makes no representation or warranty, express or implied, as to its completeness, accuracy, or timeliness. The data and analyses are subject to change without notice and Noyack is not obligated to update this information. The use of the information contained in this document is at the sole risk of the reader, and Noyack shall not be responsible for any losses, damages, or expenses incurred by any person as a result of reliance on the information contained herein. Noyack does not endorse or approve any investment or trading strategy and does not guarantee any specific outcome or profit. The reader should always conduct their own independent analysis and consult with a qualified financial advisor before making any investment decisions. This document may contain forward-looking statements and projections which are subject to risks and uncertainties, and actual results may differ materially. Past performance is not indicative of future results. This document is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. Noyack reserves the right to modify or discontinue the provision of the information contained in this document, in whole or in part, at any time and without notice. The information contained in this document is provided “as is” and Noyack makes no representation or warranty of any kind, express or implied, as to the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of the information contained in this document. Noyack shall not be liable for any errors or omissions contained in this document or for any damages whatsoever arising out of or in connection with the use of this document.