Bluerock High Income Institutional Credit Fund;A Stock Price, News & Analysis

IIMAX is the ticker symbol for the Class I shares of the Bluerock High Income Institutional Credit Fund, a public, closed-end interval fund. According to the fund's disclosures, the Bluerock High Income Institutional Credit Fund is designed to give individual investors access to an institutional credit asset class through a registered investment vehicle focused on credit-oriented investments.

The fund states that its primary investment objective is to generate high current income. Its secondary objective is to seek attractive, long-term risk-adjusted returns with low correlation to broader markets. To pursue these objectives, the fund reports that it invests, directly and indirectly, in private credit through actively managed pools of diversified senior secured loans known as Collateralized Loan Obligations (CLOs).

In its public descriptions, the Bluerock High Income Institutional Credit Fund explains that it allocates to debt positions within the CLO capital structure. These CLOs are backed by portfolios of senior secured loans, which are corporate debt obligations typically secured by a borrower's assets and positioned at the top of the capital structure. The fund notes that it maintains exposure to senior secured loans across multiple industries through its CLO holdings.

The fund also discloses that it is a closed-end interval fund. It states that its shares have no history of public trading and that it is not intended that the shares be listed on a public exchange. Instead, limited liquidity is provided through quarterly repurchase offers for a stated percentage of the fund's outstanding shares at net asset value. The fund emphasizes that no secondary market is expected to develop for its shares and that it is suitable only for investors who can bear the risks associated with limited liquidity and who view the investment as long term.

According to the fund's own materials, the Bluerock High Income Institutional Credit Fund has partnered with Clearlake Capital Asset Management, LLC as sub-adviser. The fund notes that this management team has overseen the issuance of CLOs over many years and that the sub-adviser is responsible for managing the CLO-focused investment strategy on behalf of the fund.

The fund describes several key risks associated with its strategy. Because it invests primarily in debt-anchored instruments and securities, the value of an investment in the fund may fluctuate with changes in interest rates. The fund highlights risks related to senior secured loans, including the possibility that borrowers may not make scheduled interest or principal payments, which can lead to losses or reduced cash flow and may affect the fund's net asset value and distributions. It also outlines risks specific to CLOs, such as subordination of certain tranches and the complexity of CLO structures, which can lead to unexpected investment outcomes.

The fund further notes that it is classified as "non-diversified" under the Investment Company Act of 1940. This means it may invest more than a specified percentage of its total assets in the securities of one or more issuers. The fund explains that this can cause greater fluctuations in its net asset value than a diversified fund, because changes in the financial condition or market value of a single issuer can have a more pronounced impact.

In its disclosures, the fund emphasizes that investment return and principal value will fluctuate, and that shares, when redeemed, may be worth more or less than their original cost. It repeatedly states that past performance is not a guarantee of future results and that there is no assurance its investment strategies will be effective under all market conditions. The fund also notes that its distribution policy, which targets regular quarterly distributions, is subject to change and that the level of distributions depends on the performance and tax characterization of its underlying holdings.

The Bluerock High Income Institutional Credit Fund describes itself as providing access to a rapidly growing institutional asset class through its focus on CLOs and private credit. It presents its objectives and risk profile in its prospectus and related materials, and it directs investors to review these documents carefully to understand the fund's investment objectives, risks, sales charges and expenses before investing.

Business focus and investment approach

Based on its public descriptions, the fund's business focus centers on investing in private credit via CLOs backed by diversified pools of senior secured corporate loans. The fund indicates that it seeks to balance income generation with risk management by allocating across CLO structures and underlying loans in multiple industries. It highlights the potential for income consistency and risk-adjusted returns across different market environments, while also underscoring the possibility of losses and volatility.

The fund notes that it uses an actively managed approach to CLO investing. It also points out that its ability to meet its objectives depends in part on the adviser and sub-adviser effectively allocating assets among available investment opportunities, and it cautions that there can be no assurance that actual allocations will achieve the fund's objectives or deliver positive returns.

Liquidity and investor suitability

In its risk disclosures, the Bluerock High Income Institutional Credit Fund explains that, as an interval fund, it offers limited liquidity. Quarterly repurchase offers are made for a minimum percentage of outstanding shares, but the fund notes that there is no guarantee investors will be able to sell all the shares they wish to tender in any given offer. It also explains that repurchases are typically funded from available cash or sales of portfolio securities, which can affect the market price of those securities and, in turn, the fund's net asset value.

The fund states that it is not intended to be a complete investment program. It emphasizes that an investment in the fund may be appropriate only for investors who understand and can bear the risks associated with limited liquidity, credit exposure, interest rate sensitivity, and the structural features of CLOs and senior secured loans.

Risk considerations highlighted by the fund

The fund's published risk disclosures describe several categories of risk, including:

• Credit risk: Borrowers under senior secured loans may default on interest or principal payments, which can lead to losses or reduced cash flow to the fund.
• Interest rate risk: Substantial increases in interest rates may increase loan defaults and affect the value of the fund's assets.
• Liquidity risk: Certain investments may not be able to be sold at an advantageous time or price.
• Prepayment risk: Borrowers may repay obligations early, which can reduce the amount of interest payments received.
• CLO structure risk: The fund notes that CLOs can be complex, that its investments may be subordinate to other tranches, and that structural complexity may produce disputes or unexpected results.

These risk descriptions are presented by the fund to help investors understand the potential variability of returns and the possibility of loss of principal.

Share classes and access

The Bluerock High Income Institutional Credit Fund discloses that it offers multiple share classes, including Class A, Class C, and Class I shares. The ticker IIMAX refers specifically to one of these share classes. The fund notes that minimum investment amounts apply for different share classes and that expenses and fee structures can vary by class, as detailed in its prospectus and related materials.

Overall, IIMAX represents an interest in a closed-end interval fund that focuses on CLOs and senior secured loans, with stated objectives of high current income and long-term risk-adjusted returns, and with clearly described risks related to credit, interest rates, liquidity, and the structural features of its underlying investments.