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Form N-CSR Bluerock Total Income For: Sep 30

December 9, 2022 2:06 PM EST

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM N-CSR

 

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

 

Investment Company Act file number: 811-22710

 

BLUEROCK TOTAL INCOME+ REAL ESTATE FUND

(Exact name of registrant as specified in charter)

 

1345 Avenue of the Americas, 32nd Floor, New York, NY 10105

(Address of principal executive offices) (Zip code)


Bluerock Fund Advisor, LLC

1345 Avenue of the Americas, 32nd Floor,

New York, NY 10105

(Name and address of agent for service)

 

1-844-819-8287

(Registrant’s telephone number, including area code)

 

Date of fiscal year end: September 30


Date of reporting period: September 30, 2022 

 

 

Item 1. Reports to Stockholders.

 

(a)

 

 

TABLE OF CONTENTS

 

 

Shareholder Letter 1
Portfolio Review 10
Portfolio of Investments 12
Statement of Assets and Liabilities 16
Statement of Operations 17
Statements of Changes in Net Assets 18
Statement of Cash Flows 20
Financial Highlights 21
Notes to Financial Statements 27
Report of Independent Registered Public Accounting Firm 38
Additional Information 39
Supplemental Information 40
Privacy Policy 42

 

 

 

ANNUAL REPORT: (4Q 2021-3Q 2022) (UNAUDITED)

Letter from the TI+ Portfolio Managers

 

 

To Our Valued Shareholders:

 

We are pleased to celebrate the Bluerock Total Income+ Real Estate Fund‘s 10-year anniversary in October 2022! Over this past decade the Fund (TIPRX, A-share, no load) has generated a 9.50% total net annualized return to shareholders with more than 90% less volatility than the S&P 500. This combination of performance with low volatility has delivered the highest risk-adjusted return (as measured by Sharpe and Sortino ratios) among all 6,100 U.S. closed-end, open-end and exchange-traded funds over $250 million in net assets over the 1-3-5-year and since inception time periods (Oct 2012)1. The Fund has also outperformed the leading public REIT index by over 50% (cumulative) since inception, demonstrating our management strength and foresight by actively managing the portfolio into high performing real estate sectors. The Fund’s strategic overweight to the industrial, residential, life science and other specialty sectors, which now represent about 90% of the portfolio, have been a key contributor to the Fund’s overall performance as secular demand drivers, such as e-commerce, biomedical research and demographic tailwinds continue to drive net operating income. We believe investments in these sectors will lead us forward and position the Fund to excel into the future. Our continued deep diligence into evolving trends and market demand guides our allocations toward the highest risk-adjusted real estate sectors and geographies.

 

Looking back on the Fund’s prior twelve months ending September 30, 2022, we note the following highlights:

 

  FUND HIGHLIGHTS
   
$7 BILLION NET ASSETS UNDER MANAGEMENT (AUM) MILESTONE
   
  We are proud to report the Fund’s net assets under management eclipsed $7 billion of net assets in Q3 of 2022, making TI+ the largest real estate interval fund. We believe this is a testament to the Fund’s high risk-adjusted performance and track record of delivering a diversified, actively managed, institutional real estate portfolio to the individual investor.
   
LEADING INDEX AND PEER OUTPERFORMANCE
  The Fund (TIPWX) has outperformed the NCREIF Property Index by at least 175 basis points over each of the trailing 1, 2, 3, 4, and 5 year time periods, demonstrating the consistent success of the Fund’s strategy over both short- and longer-term periods. The Fund also has the distinction of generating the highest total return of all eight real estate focused interval funds in the trailing 1,3, and 5 year periods through 9.30.2022.  
   
  ASSET MANAGER OF THE YEAR FINALIST
  Bluerock Fund Advisor, the Fund’s manager, is proud to report that it has been selected as one of three finalists for Asset Manager of the Year from the Money Management Institute and Barron’s (AUM <$25 billion category).  The award recognizes innovation and leadership in the investment advisory solutions industry and honors the asset manager that best exemplifies innovation in delivering better outcomes for investors and financial advisors.  

 

1Source: Morningstar Direct, annualized Sharpe Ratio based on daily data from 10.22.2012-9.30.2022. Using Morningstar data compiled by Bluerock Fund Advisor, LLC, TIPRX generated the highest Sharpe Ratio in the 1, 3, 5 and since inception periods among 10,028, 8,907, 8,011, and 6,063 open end, closed end, and exchange traded U.S. mutual funds, respectively. TIPRX, no load, domestic funds greater than $250 million in net assets. Sharpe Ratio and standard deviation are only two forms of performance measure. The Sharpe and Sortino Ratios would have been lower if the calculation reflected the load. Please see definitions of open-end, closed-end, and exchange-traded fund structures below.

 

Past Performance is not a guarantee of future results.

 

 

CORPORATE HEADQUARTERS | 1345 AVENUE OF THE AMERICAS | 32ND FLOOR | NEW YORK, NY 10105 | 877.826.BLUE (2583) | BLUEROCK.COM 

 

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  ANNUAL REPORT (4Q 2021 - 3Q 2022) | BLUEROCK TOTAL INCOME+ REAL ESTATE FUND (UNAUDITED)

 

Perspectives on the Commercial Real Estate Market

 

Financial market reaction to the Federal Reserve interest rates increases has been broad and swift with the Fed Funds rate increasing 300 basis points and the yield on the 10-year UST increasing 350 basis points in less than 2 years. Not only has this resulted in negative bond market total returns, but major equity indexes are down 25%-35% from their recent all-time highs. With inflation still running well above long term averages, we suspect the Fed may continue to zealously attack rising prices with higher interest rates. The impact on commercial real estate values has been mixed: inflationary forces have boosted rents, particularly in high demand sectors such as industrial and multifamily, but higher costs of capital are likely to result in increased cap rates and discount rates, though not proportionally with interest rates. With the backdrop of a rapidly changing market, there are three broad fundamental indicators we are watching closely that typically define any significant real estate declines: overbuilding, overleverage, and job losses.

 

No Overbuilding: New Construction Levels Are At Historic Lows

 

New supply of commercial real estate added as a percentage of total inventory was the lowest over this past cycle compared to previous economic cycles (see Chart 1 below). The forecast below shows the next five years to be similar to the previous 10 years and may potentially decline as higher interest rates are impeding new construction starts. Low supply deliveries keep vacancy rates low, which puts upward pressure on rents, and thus, sustains values.

 

Cumulative and Average New Supply (% of Stock)

 

 

Source: CBRE-EA, Clarion Partners Investment Research, Q2 2021 Note: Forecasts were provided by Clarion Partners Investment Research as of Q2 2021 based on historic data from CBRE-EA. Cumulative new supply was calculated from the beginning of the cycle to the end of recession. Past performance is not indicative of future results. Forecasts have certain inherent limitations and are based on complex calculations and formulas that contain substantial subjectivity and should not be relied upon as being indicative of future performance.

 

 

Why do we believe that low supply levels will persist despite strong demand? Simply stated, because of higher construction costs. With construction material costs over 35% higher today as compared to March 2020, it has become very expensive to deliver new supply (see Chart 2 below). Replacement rents may continue to rise to meet the new construction cost levels to reach the real estate market equilibrium. This is a positive factor for existing real estate values.

 

Producer Price Index (PPI) for Construction Materials (2000-2021)

 

 

Source: U.S. Bureau of Labor Statistics, Clarion Partners Investment Research 2021

 

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  ANNUAL REPORT (4Q 2021 - 3Q 2022) | BLUEROCK TOTAL INCOME+ REAL ESTATE FUND (UNAUDITED)

 

 

No Overleverage: The Lending Market Has Been More Disciplined Than In Prior Cycles

 

Levels of mortgage debt are a critical factor in the growth of real estate values. During the two historical periods when there was explosive growth of commercial mortgages over a multi-year cycle, the institutional real estate index experienced its two declines in value over its 44-year history (the S&L Crisis and the GFC). In the 13-year period following the Great Financial Crisis of 2008-09, the growth in commercial mortgage debt was the lowest on record, which has historically has resulted in few forced sales, providing support for values.

 

Cumulative Growth in Commercial Mortgage Debt from Trough of Prior Business Cycle

 

 

QUARTERS AFTER START OF BUSINESS CYCLE TROUGH

 

Source: Bluerock analysis of Federal Reserve Z.1, Flow of Funds. National Council of Real Estate Investment Fiduciaries

 

 

No Significant Job Losses: The Economy Is Creating Large Amounts of Net New Jobs And Unemployment Is Low

 

The U.S. economy created nearly 3.3 million new jobs year to date through September 2022, bringing the unemployment rate to 3.5%. This matches the lowest level in the last 10 years. During times of low unemployment almost all real estate sectors benefit as rents historically have not declined in these types of economic and low unemployment environments. Conversely, the unemployment rate exceeded 7.0%, twice the current rate, during the prior two periods where institutional private real estate experienced a decline in values.

 

Unemployment Rate

 

 

Source: Bureau of Labor Statistics

 

 

 

  ANNUAL REPORT (4Q 2021 - 3Q 2022) | BLUEROCK TOTAL INCOME+ REAL ESTATE FUND (UNAUDITED)

 

Outlook

 

Amidst turbulent financial markets, we find institutional private real estate to be a stable income- generating asset class. We plan to continue our thematic investing approach capitalizing on long-term, structural demand drivers that transcend economic cycles. Just as we have demonstrated over the Fund’s first 10 years, we believe an actively managed portfolio of institutional private real estate capitalizing on structural demand drivers and demographics will provide competitive risk-adjusted returns over both the near and long term.

 

We believe the Fund’s rare combination of total return, low volatility, and minimal price declines combined with 39 consecutive quarterly distributions*, make it a valuable allocation for investment portfolios. We thank you for your continued support of Bluerock Total Income+ Real Estate Fund and we look forward to delivering another prosperous decade to come.

 

Sincerely,

 

     

 

  FUND SUB-ADVISORS

 

  About Mercer Investment Management
   
Mercer Investment Management, Inc. (“Mercer”), acts as sub-advisor to the Fund’s private real estate investments. For more than 75 years, Mercer has been one of the world’s leading advisors to endowments, pension funds, sovereign wealth funds and family offices globally, with over 12,000 clients worldwide, and over $16.8 trillion in assets under advisement (as of 12.31.2021). Mercer works to evaluate over 7,500 investment managers and over 35,500 individual investments/strategies (as of 9.30.2022) and works with Bluerock to select a strategic combination of ‘best-in-class’ institutional real estate managers and investments for the Fund.

   
  About DWS
DWS Group GmbH and Co. KGaA (“DWS”), through its indirect subsidiary RREEF Investment, LLC, acts as sub-advisor to the Fund’s public real estate securities investments and is a registered investment adviser under the Investment Advisers Act of 1940. DWS’ real estate business in the U.S. dates back to 1975. Today, DWS has $870 billion in assets under management and works with 1,770+ institutional clients. Of that total, approximately $84.1 billion of AUM is invested in public and private real estate globally, making DWS one of the largest real estate managers in the world (as of 6.30.22).

 

*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. However, this distribution policy is subject to change. The Fund’s distribution amounts were calculated based on the ordinary income received from the underlying investments, including short-term capital gains realized from the disposition of such investments. Shareholders should not assume that the source of a distribution from the Fund is net profit. All or a portion of the distributions consist of a return of capital based on the character of the distributions received from the underlying holdings, primarily Real Estate Investment Trusts. 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 Company will continue to declare distributions or that they will continue at these rates.

 

 

 

  ANNUAL REPORT (4Q 2021 - 3Q 2022) | BLUEROCK TOTAL INCOME+ REAL ESTATE FUND (UNAUDITED)

 

Performance

 

From inception (10.22.2012) through 9.30.2022, TI+ (A Shares) generated a cumulative total return of 146.44%, or 9.50% annualized (load waived). The Fund was able to accomplish this primarily through private real estate investments, generating both income and capital appreciation. Private investments are supplemented with select public real estate securities. The Fund currently offers five share classes outstanding: A, C, I, L and M Shares. A summary of the performance of each share class is presented below.

 

Fund Performance thru 9.30.2022

 

  One Year Three Year Five Year Since Inception1
TI+ Class A (TIPRX) 24.67% 13.53% 10.78% 9.50%
TI+ Class A with Max Sales Charge2 17.50% 11.31% 9.48% 8.85%
TI+ Class C (TIPPX) 23.79% 12.70% 9.97% 8.70%
TI+ Class C with Load3 22.79% 12.70% 9.97% 8.70%
TI+ Class I (TIPWX) 24.98% 13.82% 11.06% 9.76%
TI+ Fund - Class L (TIPLX) 24.34% 13.25% 10.51% 9.22%
TI+ Class L with Max Sales Charge2 19.05% 11.63% 9.55% 8.75%
TI+ Fund - Class M (TIPMX) 24.10% 12.98% 10.24% 8.96%

 

1)Since Inception returns as of October 22, 2012. Actual Inception date of the A Shares is October 22, 2012. Actual Inception date of the Fund’s C and I Shares is April 1, 2014. Actual Inception date for the L Shares is June 1, 2017. Actual inception date for the M shares is December 27, 2021.
2)The maximum sales charge for the A Shares is 5.75% and for L Shares is 4.25%. Investors may be eligible for a reduction in sales charges.
3)Adjusted for early withdrawal charge of 1.00%.

 

 

 

Returns for Class C, Class I, Class L and Class M Shares prior to their inception dates are based on the performance of Class A Shares. For Class C, Class L , and Class M Shares, prior performance has been adjusted to reflect differences in expenses between the respective classes and Class A. The actual returns of Class I would have been different than those shown because Class I has lower expenses than Class A.

 

The total annual fund operating expense ratio, gross of any fee waivers or expense reimbursements, is 2.09% for Class A, 2.81% for Class C, 1.83% for Class I, 2.31% for Class L and 2.58% for Class M per the February 1, 2022 prospectuses.

 

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. Past performance is not a guarantee of future results. The Fund’s investment advisor has contractually agreed to reduce its fees and/or absorb expenses of the Fund, at least until January 31, 2023, for Class A, C, I and L shares to ensure that the net annual fund operating expenses will not exceed 1.95% for Class A, 2.70% for Class C, 1.70% for Class I, 2.20% for Class L, and 2.45% for Class M, subject to possible recoupment from the Fund in future years. Please review the Fund’s Prospectuses for more detail on the expense waiver. Results shown reflect the full fee waiver, without which the results could have been lower. A Fund’s performance, especially for very short periods of time, should not be the sole factor in making your investment decisions. For performance information current to the most recent month end, please call toll-free 1-844-819-8287.

 

Total returns are calculated using SEC Form N-2 instructions and reflect all fees and charges. 

 

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  ANNUAL REPORT (4Q 2021 - 3Q 2022) | BLUEROCK TOTAL INCOME+ REAL ESTATE FUND (UNAUDITED)

 

Geographic Diversification   Sector Diversification
The regions and allocations presented represent the Fund’s institutional fund investments as of 9.30.2022, but is subject to change at any time.   The sector diversification presented represents examples of how the Fund’s institutional fund investments are allocated as of 9.30.2022, but is subject to change at any time.
     

 

Highlighted Assets

 

 

As of 9.30.2022. The properties shown here are currently owned by the underlying third party institutional private equity real estate funds described herein. Diversification does not ensure profit and Holdings are subject to change. 

 

 

 

  ANNUAL REPORT (4Q 2021 - 3Q 2022) | BLUEROCK TOTAL INCOME+ REAL ESTATE FUND (UNAUDITED)

 

Fund Holdings

 

As of 9.30.2022, the Gross Asset Value of the underlying real estate in the institutional private real estate funds in which TI+ is invested is nearly $383 billion, comprising over 6,400 properties across the United States.

 

 

4)Occupancy rates reported from underlying managers, average is the simple average of all private funds. Generally excludes properties under construction, but generally includes properties in lease-up.
5)Weighted average loan to value: outstanding loan balance divided by the total value of the underlying real estate. For IQHQ, Harrison Street Life Science, and Harrison Street Data Center, estimated based on expected leverage target.
6)The Fund expects to invest in the privately offered subordinate classes of K-Notes. Because more-senior classes have payment priority over subordinate classes of K-Notes, the value of subordinate K-Notes is highly sensitive to the default rate and foreclosure recovery rate on the underlying apartment loans. Subordinate K-Notes are also subject to liquidity risk because they are not available to the investing public and have a limited secondary market composed of institutional investors.

 

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  ANNUAL REPORT (4Q 2021 - 3Q 2022) | BLUEROCK TOTAL INCOME+ REAL ESTATE FUND (UNAUDITED)

 

Definitions

 

NFI-ODCE: a capitalization-weighted, gross of fee, time-weighted return index with an inception date of December 31, 1977. Supplemental data is also provided, such as equal-weight and net of fee returns, for informational purposes and additional analysis.

 

iPERE/NCREIF Property Index (NPI): Institutional private equity real estate (iPERE) can be described as high-quality commercial properties that are usually congregated in large investment portfolios managed professionally on behalf of third-party owners or beneficiaries. The leading benchmark index for iPERE is the National Council of Real Estate Investment Fiduciaries Price Index (NPI) which represents a collection of 10,000+ institutional properties representing all major commercial property types within the U.S. The NPI is a quarterly time series composite total rate of return measure of investment performance of a very large pool of individual commercial real estate properties acquired in the private market for investment purposes only. All properties in the NPI have been acquired, at least in part, on behalf of tax-exempt institutional investors - the great majority being pension funds. As such, all properties are held in a fiduciary environment.

 

Sharpe Ratio: a measure of the return of an investment based on the level of risk (volatility). A higher number indicating a higher return per unit of risk.

 

Standard Deviation: measures volatility by calculating the daily dispersion of returns from the mean.

 

Sortino Ratio: a measure of the return of an investment based on the level of downside volatility. A higher number indicates a higher return per unit of downside.

 

Sources: Morningstar Direct, Standard & Poors, Yahoo Finance, Federal Reserve Economic Data. Institutional Real Estate: Yield is from the NCREIF Property Index (NPI) as of 9.30.2022, The NPI is a leading benchmark index for Institutional Real Estate which represents a collection of 10,000+ institutional properties representing all major commercial property types within the U.S. The NPI is a quarterly time series composite total rate of return measure of investment performance of a very large pool of individual commercial real estate properties acquired in the private market for investment purposes only. All properties in the NPI have been acquired, at least in part, on behalf of tax-exempt institutional investors - the great majority being pension funds. As such, all properties are held in a fiduciary environment. Bloomberg Barclays U.S. Aggregate Bond Index: A broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. The index includes Treasuries, government-related and corporate securities, MBS (agency fixed-rate and hybrid ARM pass-throughs), ABS and CMBS (agency and non-agency). Provided the necessary inclusion rules are met, US Aggregate eligible securities also contribute to the multi-currency Global Aggregate Index and the US Universal Index, which includes high yield and emerging markets debt. Risks include rising interest rates or other economic factors that may negatively affect the value of the underlying bonds.

 

You cannot invest directly in an index and unmanaged indices do not reflect fees, expenses or sales charges. Additionally, a rise in interest rates could cause a decline in the value of fixed income securities. The referenced yields are shown for general market comparisons. Past performance is not a guarantee of future results.

 

You cannot invest directly in an index. Benchmark performance should not be considered reflective of Fund performance.

 

 

 

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 or that you may lose part or all of your investment.

 

The ability of the Fund to achieve its investment objective depends, in part, on the ability of the Advisor to allocate effectively the Fund’s assets across the various asset classes in which it invests and to select investments in each such asset class. There can be no assurance that the actual allocations will be effective in achieving the Fund’s investment objective or delivering positive returns.

 

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. Since inception, the Fund has made 39 repurchase offers, of which 34 have resulted in the repurchase of all shares tendered, four have resulted in the repurchase of less than all shares tendered, and one is pending. In connection with the August 2022 repurchase offer, the Fund repurchased all shares tendered for repurchase. 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.

 

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.

 

The Fund is subject to the risk that geopolitical and other similar events will disrupt the economy on a national or global level. For instance, war, terrorism, market manipulation, government defaults, government shutdowns, political changes or diplomatic developments, public health emergencies (such as the spread of infectious diseases, pandemics and epidemics) and natural/environmental disasters can all negatively impact the securities markets.

 

The current novel coronavirus (COVID-19) global pandemic and the aggressive responses taken by many governments, including closing borders, restricting international and domestic travel, and the imposition of prolonged quarantines or similar restrictions, as well as the forced or voluntary closure of, or operational changes to, many retail and other businesses, have had negative impacts, and in many cases severe negative impacts, on markets worldwide. Potential impacts on the real estate market may include lower occupancy rates, decreased lease payments, defaults and foreclosures, among other consequences. It is not known how long such impacts, or any future impacts of other significant events described above, will or would last, but there could be a prolonged period of global economic slowdown.

 

The Fund will concentrate its investments in real estate industry securities. The value of the Fund’s shares will be affected by factors affecting the value of real estate and the earnings of companies engaged in the real estate industry. These factors include, among others: (i) changes in general economic and market conditions; (ii)changes in the value of real estate properties; (iii) risks related to local economic conditions, overbuilding and increased competition; (iv) increases in property taxes and operating expenses; (v) changes in zoning laws; (vi)casualty and condemnation losses; (vii) variations in rental income, neighborhood values or the appeal of property to tenants; (viii) the availability of financing; (ix) climate change; and (x) changes in interest rates. Many real estate companies utilize leverage, which increases investment risk and could adversely affect a company’s operations and market value in periods of rising interest rates. The value of securities of companies in the real estate industry may go through cycles of relative under-performance and over-performance in comparison to equity securities markets in general.

 

 

 

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  ANNUAL REPORT (4Q 2021 - 3Q 2022) | BLUEROCK TOTAL INCOME+ REAL ESTATE FUND (UNAUDITED)

 

A significant portion of the Fund’s underlying investments are in private real estate investment funds managed by institutional investment managers (“Institutional Investment Funds”). Investments in Institutional Investment Funds pose specific risks, including: such investments require the Fund to bear a pro rata share of the vehicles’ expenses, including management and performance fees; the Advisor and Sub-Advisor will have no control over investment decisions may by such vehicle; such vehicle may utilize financial leverage; such investments have limited liquidity; the valuation of such investment as of a specific date may vary from the actual sale price that may be obtained if such investment were sold to a third party.

 

Additional risks related to an investment in the Fund are set forth in the “Risk Factors” section of the prospectus, which include, but are not limited to the following: convertible securities risk; correlation risk; credit risk; fixed income risk; leverage risk; risk of competition between underlying funds; and preferred securities risk.

 

Investors should carefully consider the investment objectives, risks, charges and expenses of the Bluerock Total Income+ Real Estate Fund. This and other important information about the Fund is contained in the prospectus, which can be obtained by calling toll free 844-819-8287, or online at bluerock.com/ti-fund/documents. The prospectus should be read carefully before investing.

 

The Bluerock Total Income+ Real Estate Fund is distributed by ALPS Distributors, Inc (ALPS). Bluerock Fund Advisor, LLC is not affiliated with ALPS, Mercer Investment Management, or DWS.

 

Additional fund performance details available at bluerock.com/ti-fund/performance. Investors may be eligible for a reduction in sales charges. Please see the Fund Prospectus for details. Please note that the indices are for informational purposes only and are not reflective of any investment. As it is not possible to invest in the indices, the data shown does not reflect or compare features of an actual investment, such as its objectives, costs and expenses, liquidity, safety, guarantees or insurance, fluctuation of principal or return, or tax features.

 

There are limitations when comparing the Bluerock Total Income+ Real Estate Fund to Stock, Bond, and Public Real Estate indices. Many open-end funds which track these indices offer daily liquidity, while closed-end interval funds offer liquidity only on a periodic basis. Deteriorating general market conditions will reduce the value of stock securities. When interest rates rise, the value of bond securities tends to fall. Real estate securities may decline because of adverse developments affecting the real estate industry and real property values. You cannot invest directly in an index and unmanaged indices do not reflect fees, expenses or sales charges. Please see definitions for a description of the risks and comparisons of the investment indexes selected.

 

 

 

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Bluerock Total Income+ Real Estate Fund Portfolio Review
  September 30, 2022 (Unaudited)

 

Comparison of the Change in Value of a $10,000 Investment

 

 

The Fund’s performance figures for certain periods ended September 30, 2022, compared to select benchmark indexes:

 

Bluerock Total Income+ Real Estate Fund:  One Year   Three Year   Five Year   Since Inception Class A*   Since Inception Class C and Class I*   Since Inception Class L*   Since Inception Class M* 
Class A                            
Without Load   24.67%   13.53%   10.78%   9.50%            
With Load(a)   17.50%   11.31%   9.48%   8.85%            
Class C                                   
Without Load   23.79%   12.70%   9.97%       8.41%        
With Load(b)   22.79%   12.70%   9.97%       8.41%        
Class I   24.98%   13.82%   11.06%       9.51%        
Class L                                   
Without Load   24.34%   13.25%   10.51%           10.21%    
With Load(c)   19.05%   11.63%   9.55%           9.32%    
Class M                           15.40%
S&P 500 Total Return Index   (15.47)%   8.16%   9.24%   11.82%   9.93%   9.51%   (24.25)%
Bloomberg U.S. Aggregate
Bond Index
   (14.60)%   (3.26)%   (0.27)%   0.91%   1.06%   (0.10)%   (14.57)%

 

*Class A commenced operations October 22, 2012, Class C and Class I commenced operations April 1, 2014, Class L commenced operations June 1, 2017, and Class M commenced operations December 27, 2021.
(a)Adjusted for initial maximum sales charge of 5.75%.
(b)Adjusted for early withdrawal charge of 1.00%.
(c)Adjusted for initial maximum sales charge of 4.25%.

 

The S&P 500 Total Return Index is an unmanaged market capitalization-weighted index which is comprised of 500 of the largest U.S. domiciled companies and includes the reinvestment of all dividends. Investors cannot invest directly in an index or benchmark.

 

The Bloomberg U.S. Aggregate Bond Index is an unmanaged index which represents the U.S. investment-grade fixed-rate bond market (including government and corporate securities, mortgage pass-through securities and asset-backed securities). Investors cannot invest directly in an index or benchmark.

 

Total returns are calculated using closing Net Asset Value as of September 30, 2022, and may not match returns presented in the Financial Highlights due to adjustments under accounting principles generally accepted in the United States of America.

 

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Bluerock Total Income+ Real Estate Fund Portfolio Review
  September 30, 2022 (Unaudited)

 

The performance data quoted is historical. Past performance is no guarantee of future results. The investment return and principal value of an investment will fluctuate. An investor’s shares, when redeemed, may be worth more or less than the original cost. Total returns are calculated using closing Net Asset Value as of September 30, 2022. Total returns are calculated assuming reinvestment of all dividends and distributions. Total returns would have been lower had the Advisor not waived a portion of its fees. Returns greater than one year are annualized. The Advisor and the Fund have entered into an expense limitation and reimbursement agreement under which the Advisor has contractually agreed to waive its fees and to pay or absorb the ordinary operating expenses of the Fund (excluding any taxes, interest, brokerage commissions, acquired fund fees and expenses, and extraordinary expenses, such as litigation or reorganization costs, but including organizational costs and offering costs), to the extent that such expenses exceed 1.95%, 2.70%, 1.70%, 2.20% and 2.45% of the Fund's average daily net assets attributable to the Class A, Class C, Class I, Class L and Class M shares, respectively. In consideration of the Advisor's agreement to limit the Fund's expenses, the Fund has agreed to repay the Advisor in the amount of any fees the Advisor previously waived or Fund expenses reimbursed, subject to the limitations that: (1) the reimbursement will be made if payable not more than three years from the date incurred; (2) the reimbursement may not be made if it would cause the expense limitation then in effect or in effect at the time of the waiver to be exceeded; and (3) the reimbursement is approved by the Fund's Board of Trustees. The Expense Limitation Agreement will remain in effect at least until January 31, 2023 unless and until the Board approves its modification or termination. After January 31, 2023, the Expense Limitation Agreement may be renewed at the Advisor's and Board's discretion.

 

The Fund’s total gross annual operating expenses, including the expenses of underlying funds and before any fee waiver, are 2.09%, 2.81%, 1.83%, 2.35% and 2.58% for Class A, Class C, Class I, Class L and Class M, respectively, per the February 1, 2022 prospectus. Class A shares are subject to a maximum sales charge imposed on purchases of 5.75%. Class A shareholders who tender for repurchase Class A shares that were purchased in amounts of $1,000,000 or more that have been held less than one year (365 days) from the purchase date will be subject to an early withdrawal charge of 1.00% of the original purchase price. Class C shares are subject to an early withdrawal charge of 1.00% if redeemed less than 365 days after the purchase. Class L shares are subject to a maximum sales charge imposed on purchases of 4.25%. The above performance figures do not reflect the deduction of taxes that a shareholder would have to pay on Fund distributions or the redemption of the Fund shares. For performance information current to the most recent month-end, please call 1-844-819-8287.

 

Portfolio Composition as of September 30, 2022

 

   Percent of Net Assets 
Private Real Estate Securities   93.11%
Real Estate Debt Securities   4.02%
Public Equity Real Estate Securities   1.97%
Open-Ended Mutual Fund   0.18%
Short-Term Investment   4.93%
Total Investments   104.21%
Liabilities in Excess of Other Assets   (4.21)%
Total Net Assets   100.00%

 

See the Portfolio of Investments in this report for a more detailed account of the Fund’s holdings.

 

Annual Report | September 30, 2022 11

 

 

Bluerock Total Income+ Real Estate Fund Portfolio of Investments
  September 30, 2022

 

Security  Shares   Value 
PRIVATE REAL ESTATE SECURITIES (93.11%)(a)          
Apartments (11.18%)          
Bridge Workforce Housing Fund I, LP   N/A   $101,283,390 
Clarion Gables Multifamily Trust   62,976    120,356,674 
Cortland Growth & Income Fund   237,420    417,037,909 
Sentinel Real Estate Fund   1,238    163,732,776 
         802,410,749 
Data Centers (0.23%)          
Harrison Street Data Center Fund(b)   N/A    16,340,706 
           
Diversified (45.09%)          
AEW Core Property Trust   22,332    29,419,553 
Ares Real Estate Enhanced Income Fund   N/A    117,922,836 
Bain Capital Real Estate Fund I   N/A    68,916,355 
Blackstone Property Partners U.S.   83,488    153,859,175 
Bridge Debt Strategies Fund III, LP   N/A    58,830,843 
Bridge Debt Strategies Fund IV, LP   N/A    63,445,215 
Brookfield Premier Real Estate Partners   222,833    417,651,230 
Carlyle Property Investors   78,639    155,762,773 
CBRE U.S. Core Partners, LP   133,957,632    279,785,708 
Clarion Lion Properties Fund   125,550    257,445,039 
H/2 Special Opportunities LP V(b)(c)   N/A    38,057,238 
Harrison Street Core Property Fund   35,400    58,165,567 
Invesco Core Real Estate Fund   687    163,459,597 
Invesco U.S. Income Fund LP   117,543    223,458,762 
Morgan Stanley Prime Property Fund LLC   16,948    397,735,776 
PGIM PRISA II   152,474    254,057,684 
PGIM PRISA III   54,811    170,312,303 
Principal Enhanced Property Fund LP   6,175,011    102,796,806 
RREEF America REIT II, Inc.   512,415    84,266,099 
Stockbridge Smart Markets Fund   23,980    50,656,784 
Stockbridge Value Fund II   N/A    1,992,301 
TA Realty Core Property Fund, LP   54,404    87,835,323 
         3,235,832,967 
Industrial (27.71%)          
Ares Industrial Real Estate Fund   60,159    174,350,739 
CBRE U.S. Logistics Partners LP   131,109,117    174,397,328 
Clarion Lion Industrial Trust   78,028    315,471,943 
Prologis Targeted U.S. Logistics Fund(c)   197,691    656,681,181 
Realterm Logistics Income Fund LP   187,289    346,508,231 
RREEF Core Plus Industrial Fund LP   899,134    214,638,318 
TA Realty Logistics Fund, LP   85,054    106,478,269 
         1,988,526,009 
Life Science (8.90%)          
Bain Capital Real Estate Life Science Fund   N/A    534,700 
Blackstone Property Partners Life Science   N/A    90,174,328 
Harrison Street Life Science   N/A    10,297,138 
           

 

The accompanying notes are an integral part of these financial statements.
12

 

 

Bluerock Total Income+ Real Estate Fund Portfolio of Investments (Continued)
  September 30, 2022

 

Security  Shares   Value 
Life Science (continued)          
IQHQ, Inc.(b)(c)   19,770,469   $537,378,068 
         638,384,234 
TOTAL PRIVATE REAL ESTATE SECURITIES (Cost $5,390,277,238)        6,681,494,665 

 

Security  Principal   Value 
REAL ESTATE DEBT SECURITIES (4.02%)(a)(d)          
FREMF 2018-K82 Mortgage Trust, Class X2A, IO, 0.100%, 9/25/2028  $1,069,090,127   $5,293,228 
FREMF 2018-K82 Mortgage Trust, Class D, 0.000%, 10/25/2028   100,392,906    60,919,307 
FREMF 2018-K82 Mortgage Trust, Class X2B, IO, 0.100%, 10/25/2028   262,694,906    1,364,036 
FREMF 2019-K101 Mortgage Trust, Class X2A, IO, 0.100%, 10/25/2029   1,182,127,052    6,772,246 
FREMF 2019-K101 Mortgage Trust, Class D, 0.000%, 1/25/2030   109,477,635    60,305,009 
FREMF 2019-K101 Mortgage Trust, Class X2B, IO, 0.100%, 1/25/2030   270,043,635    1,633,753 
FREMF 2019-K91 Mortgage Trust, Class X2A, IO, 0.100%, 3/25/2029   1,117,780,359    5,945,750 
FREMF 2019-K91 Mortgage Trust, Class D, 0.000%, 10/25/2029   103,857,565    58,501,426 
FREMF 2019-K91 Mortgage Trust, Class X2B, IO, 0.100%, 10/25/2029   247,526,565    1,415,940 
FREMF 2019-KC03 Mortgage Trust, Class C, 4.365%, 1/25/2026   58,088,000    51,651,091 
FREMF 2021-K132 Mortgage Trust, Class X2A, IO, 0.100%, 8/25/2031   978,879,880    6,983,459 
FREMF 2021-K132 Mortgage Trust, Class X2B, IO, 0.100%, 8/25/2031   230,992,666    1,693,913 
FREMF 2021-K132 Mortgage Trust, Class D, 0.000%, 12/25/2031   60,501,666    26,356,156 
TOTAL REAL ESTATE DEBT SECURITIES (Cost $280,033,803)        288,835,314 

 

Security  Shares   Value 
PUBLIC EQUITY REAL ESTATE SECURITIES (1.97%)          
Public Non-Traded Real Estate Investment Trusts (0.00%)          
Diversified (0.00%)          
Highlands REIT, Inc.(b)(e)   140,161    39,245 
Total Public Non-Traded Real Estate Investment Trusts (Cost $51,627)        39,245 
           
Publicly Traded Real Estate Investment Trusts (1.97%)          
Apartments (0.28%)          
Apartment Income REIT Corp.   80,494    3,108,678 
AvalonBay Communities, Inc.   53,004    9,762,807 
Mid-America Apartment Communities, Inc.   45,128    6,997,999 
         19,869,484 
Communications (0.03%)          
American Tower Corp.   4,474    960,568 
SBA Communications Corp.   4,267    1,214,601 
         2,175,169 
Data Centers (0.18%)          
Digital Realty Trust, Inc.   12,159    1,205,929 
Equinix, Inc.   20,108    11,438,235 
         12,644,164 
Diversified (0.05%)          
WP Carey, Inc.   52,149    3,640,000 
         3,640,000 
Gaming (0.09%)          
VICI Properties, Inc.   209,081    6,241,068 
         6,241,068 
Healthcare (0.17%)          
Healthcare Realty Trust, Inc.   89,073    1,857,172 
Healthpeak Properties, Inc.   122,169    2,800,113 
Sabra Health Care REIT, Inc.   222,606    2,920,591 
Ventas, Inc.   115,964    4,658,274 
         12,236,150 

 

The accompanying notes are an integral part of these financial statements.  
Annual Report | September 30, 2022 13

 

 

Bluerock Total Income+ Real Estate Fund Portfolio of Investments (Continued)
  September 30, 2022

 

Security  Shares   Value 
Hotels (0.04%)        
Ryman Hospitality Properties, Inc.(b)   44,363   $3,264,673 
         3,264,673 
Industrial (0.32%)          
Duke Realty Corp.   95,907    4,622,717 
EastGroup Properties, Inc.   26,655    3,847,383 
First Industrial Realty Trust, Inc.   58,996    2,643,611 
Prologis, Inc.   116,064    11,792,102 
         22,905,813 
Manufactured Homes (0.06%)          
Equity LifeStyle Properties, Inc.   70,610    4,437,132 
         4,437,132 
Office (0.05%)          
Boston Properties, Inc.   48,014    3,599,610 
         3,599,610 
Regional Malls (0.03%)          
Simon Property Group, Inc.   27,806    2,495,589 
         2,495,589 
Self-Storage (0.28%)          
Iron Mountain, Inc.   91,377    4,017,847 
Life Storage, Inc.   44,581    4,937,792 
Public Storage   37,104    10,864,422 
         19,820,061 
Shopping Center (0.11%)          
Kimco Realty Corp.   241,530    4,446,567 
Kite Realty Group Trust   200,856    3,458,741 
         7,905,308 
Single Tenant (0.20%)          
Agree Realty Corp.   89,180    6,026,784 
Essential Properties Realty Trust, Inc.   53,997    1,050,242 
Realty Income Corp.   128,002    7,449,716 
         14,526,742 
Single-Family Rental (0.08%)          
American Homes 4 Rent, Class A   172,828    5,670,487 
         5,670,487 
Total Publicly Traded Real Estate Investment Trusts (Cost $161,255,477)        141,431,450 
           
TOTAL PUBLIC EQUITY REAL ESTATE SECURITIES (Cost $161,307,104)        141,470,695 
           
OPEN-ENDED MUTUAL FUND (0.18%)          
Diversified (0.18%)          
Cohen & Steers Institutional Realty Shares, Inc.   298,719    12,531,251 
           
TOTAL OPEN-ENDED MUTUAL FUND (Cost $15,000,000)        12,531,251 
           
SHORT TERM INVESTMENT (4.93%)          
Fidelity Investments Money Market Fund - Government Portfolio - Class I, 2.74%(f) (Cost $353,505,756)   353,505,756    353,505,756 
           
TOTAL INVESTMENTS (104.21%) (Cost $6,200,123,901)       $7,477,837,681 
LIABILITIES IN EXCESS OF OTHER ASSETS (-4.21%)        (302,009,657)
NET ASSETS (100.00%)       $7,175,828,024 

 

Common Abbreviations

IO - Interest Only Security                

 

The accompanying notes are an integral part of these financial statements.
14

 

 

Bluerock Total Income+ Real Estate Fund Portfolio of Investments (Continued)
  September 30, 2022

 

(a)All or a portion of these securities are segregated as collateral for the Line of Credit as of September 30, 2022.
(b)Non-income producing security.
(c)Holding is comprised of two share classes of the same underlying investment.
(d)Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be sold in the ordinary course of business in transactions exempt from registration, normally to qualified institutional buyers. As of September 30, 2022, the aggregate market value of those securities was $288,835,314, representing 4.02% of net assets.
(e)Fair value estimated using fair valuation procedures adopted by the Board of Trustees. Total value of such securities is $39,245, representing 0.00% of net assets.
(f)The rate shown is the 7-day effective yield as of September 30, 2022.

 

The accompanying notes are an integral part of these financial statements.  
Annual Report | September 30, 2022 15

 

 

Bluerock Total Income+ Real Estate Fund Statement of Assets and Liabilities
  September 30, 2022

 

ASSETS    
Investments, at value (Cost $6,200,123,901)  $7,477,837,681 
Cash   6,683,478 
Receivable for investments sold   133,477 
Receivable for shares sold   24,106,429 
Dividends and Interest receivable   31,604,081 
Prepaid offering costs   10,475 
Prepaid expenses and other assets   150,374 
Total Assets   7,540,525,995 
LIABILITIES     
Payable for investments purchased   1,877,717 
Line of credit payable   350,000,000 
Line of credit interest payable   337,710 
Investment advisory fees payable   8,772,610 
Shareholder servicing fees payable   360,722 
Administration fees payable   290,814 
Transfer agency fees payable   1,673,402 
Distribution fees payable   545,214 
Accrued expenses and other liabilities   839,782 
Total Liabilities(a)   364,697,971 
NET ASSETS  $7,175,828,024 
NET ASSETS CONSIST OF     
Paid-in capital  $5,821,505,048 
Total distributable earnings   1,354,322,976 
NET ASSETS  $7,175,828,024 
PRICING OF SHARES     
Class A:     
Net asset value, per share  $37.10 
Net assets  $921,034,881 
Shares of beneficial interest outstanding (unlimited number of shares, no par value common stock authorized)   24,823,702 
Maximum offering price per share ((NAV/0.9425), based on maximum sales charge of 5.75% of the offering price)  $39.36 
Class C:     
Net asset value, per share  $34.85 
Net assets  $706,009,254 
Shares of beneficial interest outstanding (unlimited number of shares, no par value common stock authorized)   20,257,084 
Class I:     
Net asset value, per share  $37.99 
Net assets  $5,288,746,704 
Shares of beneficial interest outstanding (unlimited number of shares, no par value common stock authorized)   139,230,213 
Class L:     
Net asset value, per share  $36.61 
Net assets  $124,675,240 
Shares of beneficial interest outstanding (unlimited number of shares, no par value common stock authorized)   3,405,356 
Maximum offering price per share ((NAV/0.9575), based on maximum sales charge of 4.25% of the offering price)  $38.23 
Class M:     
Net asset value, per share  $34.93 
Net assets  $135,361,945 
Shares of beneficial interest outstanding (unlimited number of shares, no par value common stock authorized)   3,875,173 

 

 

 

 

(a)Separately, see Note 8 Commitment and Contingencies for detail on unfunded commitments.

 

 

 

The accompanying notes are an integral part of these financial statements.
16

 

 

Bluerock Total Income+ Real Estate Fund Statement of Operations
  For the Year Ended September 30, 2022

 

INVESTMENT INCOME    
Dividend Income  $137,920,183 
Interest Income   20,620,134 
Total Investment Income   158,540,317 
      
EXPENSES     
Investment Advisory fees   77,004,479 
Administrative fees   1,371,376 
Transfer Agency fees   5,441,913 
Shareholder servicing fees:     
Class A   1,841,110 
Class C   1,503,854 
Class L   267,947 
Distribution fees:     
Class C   4,511,561 
Class L   267,947 
Class M   388,701 
Legal fees   235,045 
Audit and tax fees   31,000 
Reports to shareholders and printing fees   827,359 
Custody fees   190,008 
Chief compliance officer fees   63,641 
Offering cost   33,131 
Interest expense   4,882,802 
Trustees' fees   173,125 
Other expenses   467,550 
Total Expenses   99,502,549 
Recoupment of previously waived fees (See Note 3)   501,484 
Net Expenses   100,004,033 
Net Investment Income   58,536,284 
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS     
Net realized gain/(loss) on investments   4,453,394 
Net change in unrealized appreciation/(depreciation) on investments   774,204,482 
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS   778,657,876 
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS  $837,194,160 

 

The accompanying notes are an integral part of these financial statements.  
Annual Report | September 30, 2022 17

 

 

Bluerock Total Income+ Real Estate Fund

Statements of Changes in

Net Assets

 

   For the Year Ended September 30, 2022   For the Year Ended September 30, 2021 
OPERATIONS:        
Net investment income  $58,536,284   $41,994,881 
Net realized gain on investments   4,453,394    26,780,286 
Net change in unrealized appreciation/(depreciation) on investments   774,204,482    371,899,418 
Net Increase in Net Assets Resulting from Operations   837,194,160    440,674,585 
           
DISTRIBUTIONS TO SHAREHOLDERS:          
Class A          
From distributable earnings   (7,675,897)   (11,117,116)
From return of capital   (32,759,054)   (16,790,002)
Class C          
From distributable earnings   (6,868,487)   (9,669,663)
From return of capital   (25,870,814)   (13,554,500)
Class I          
From distributable earnings   (30,652,553)   (28,322,736)
From return of capital   (176,945,671)   (53,334,407)
Class L          
From distributable earnings   (1,179,735)   (1,622,830)
From return of capital   (4,655,135)   (2,506,782)
Class M          
From return of capital   (3,334,287)    
Total Distributions to Shareholders   (289,941,633)   (136,918,036)
           
BENEFICIAL INTEREST TRANSACTIONS:          
Class A          
Shares sold   326,482,026    99,334,955 
Distributions reinvested   18,457,287    13,307,570 
Shares redeemed   (67,452,549)   (97,571,135)
Shares transferred out(a)   (13,511,953)   (26,740,491)
Class C          
Shares sold   189,474,973    58,875,954 
Distributions reinvested   19,316,744    14,215,722 
Shares redeemed   (40,073,381)   (63,536,358)
Shares transferred out(a)   (16,110,786)   (6,518,764)
Class I          
Shares sold   3,097,711,474    732,585,726 
Distributions reinvested   85,274,417    36,284,955 
Shares redeemed   (320,068,884)   (321,594,589)
Shares transferred in(b)   30,616,066    33,728,094 
Class L          
Shares sold   27,564,881    10,344,422 
Distributions reinvested   3,695,999    2,733,534 
Shares redeemed   (5,652,265)   (6,683,966)
Shares transferred out(a)   (995,827)   (468,839)
Class M          
Shares sold   131,148,089     
Distributions reinvested   2,650,602     
Shares redeemed   (2,231)    
Shares transferred in(b)   2,500     
Net Increase in Net Assets Derived from Beneficial Interest Transactions   3,468,527,182    478,296,790 
Net increase in net assets   4,015,779,709    782,053,339 
NET ASSETS:          
Beginning of Year   3,160,048,315    2,377,994,976 
End of Year  $7,175,828,024   $3,160,048,315 

 

The accompanying notes are an integral part of these financial statements.
18

 

 

  Statements of Changes in
Bluerock Total Income+ Real Estate Fund Net Assets (Continued)

 

   For the Year Ended September 30, 2022   For the Year Ended September 30, 2021 
Other Information          
Share Transactions:          
Class A          
Beginning shares   17,561,636    17,973,066 
Shares sold   9,020,062    3,286,699 
Distributions reinvested   510,773    441,606 
Shares redeemed   (1,889,318)   (3,252,326)
Shares transferred out(a)   (379,451)   (887,409)
Net increase/(decrease) in shares outstanding   7,262,066    (411,430)
Ending shares   24,823,702    17,561,636 
Class C          
Beginning shares   15,754,446    15,677,939 
Shares sold   5,588,625    2,036,019 
Distributions reinvested   568,822    496,961 
Shares redeemed   (1,177,505)   (2,228,298)
Shares transferred out(a)   (477,304)   (228,175)
Net increase in shares outstanding   4,502,638    76,507 
Ending shares   20,257,084    15,754,446 
Class I          
Beginning shares   60,339,974    45,032,151 
Shares sold   84,290,043    23,556,038 
Distributions reinvested   2,297,038    1,175,998 
Shares redeemed   (8,540,362)   (10,521,668)
Shares transferred in(b)   843,520    1,097,455 
Net increase in shares outstanding   78,890,239    15,307,823 
Ending shares   139,230,213    60,339,974 
Class L          
Beginning shares   2,712,664    2,516,381 
Shares sold   776,936    344,076 
Distributions reinvested   103,726    91,549 
Shares redeemed   (160,187)   (223,825)
Shares transferred out(a)   (27,783)   (15,517)
Net increase in shares outstanding   692,692    196,283 
Ending shares   3,405,356    2,712,664 
Class M          
Beginning shares        
Shares sold   3,799,588     
Distributions reinvested   75,570     
Shares redeemed   (64)    
Shares transferred in(b)   79     
Net increase in shares outstanding   3,875,173     
Ending shares   3,875,173     

 

(a)Shares transferred out - net reduction in shares of a particular class resulting from transfers to other share classes.
(b)Shares transferred in - net increase in shares of a particular class resulting from transfers from other share classes.

 

The accompanying notes are an integral part of these financial statements.  
Annual Report | September 30, 2022 19

 

 

Bluerock Total Income+ Real Estate Fund Statement of Cash Flows
     

 

   For the Year Ended September 30, 2022 
Cash Flows from Operating Activities:     
Net increase in net assets resulting from operations  $837,194,160 
Adjustments to reconcile net increase in net assets resulting from operations to net cash used in operating activities:     
Purchase of investment securities   (3,629,288,834)
Proceeds from disposition of investment securities   271,757,181 
Net purchases of short-term investment securities   (191,631,444)
Net realized gain on investments   (4,453,394)
Net change in unrealized appreciation/(depreciation) on investments   (774,204,482)
Discount and premiums amortized   (11,221,374)
(Increase)/Decrease in Assets:     
Dividends and interest receivable   (14,843,351)
Prepaid offering costs   (10,475)
Prepaid expenses and other assets   (64,975)
Increase/(Decrease) in Liabilities:     
Shareholder servicing fees payable   134,816 
Investment advisory fees payable   5,077,413 
Administrative fees payable   123,452 
Transfer agency fees payable   1,096,071 
Distribution fees payable   241,200 
Trustees' fees payable   (12,500)
Interest due on line of credit payable   242,777 
Accrued expenses and other liabilities   334,949 
Net Cash Used in Operating Activities   (3,509,528,810)
      
Cash Flows from Financing Activities:     
Change in Line of Credit Borrowing   350,000,000 
Proceeds from shares sold   3,758,666,568 
Payment on shares redeemed   (433,039,642)
Cash distributions paid   (160,546,584)
Net Cash Provided by Financing Activities   3,515,080,342 
      
Net Change in Cash   5,551,532 
      
Cash Beginning of Year  $1,131,946 
Cash End of Year  $6,683,478 
      
Non-cash financing activities not included herein consist of reinvestment of distributions of:  $129,395,049 
Cash paid for interest on lines of credit during the year was:   4,640,025 

 

The accompanying notes are an integral part of these financial statements.
20
 

 

Bluerock Total Income+ Real Estate Fund - Class A Financial Highlights
The table below sets forth financial data for one share of beneficial interest outstanding throughout each year presented.

 

   For the Year Ended September 30, 2022   For the Year Ended September 30, 2021   For the Year Ended September 30, 2020   For the Year Ended September 30, 2019   For the Year Ended September 30, 2018 
Net asset value, beginning of year  $32.66   $29.26   $30.43   $30.00   $29.37 
INCOME FROM INVESTMENT OPERATIONS:                         
Net investment income(a)   0.38    0.50    0.46    0.33    0.21 
Net realized and unrealized gain/(loss)   5.97    4.50    (0.05)   1.69    2.00 
Total from investment operations   6.35    5.00    0.41    2.02    2.21 
DISTRIBUTIONS:                         
From net investment income           (0.06)        
From net realized gain on investments   (0.42)   (0.63)   (1.02)   (0.32)   (0.54)
Return of capital   (1.49)   (0.97)   (0.50)   (1.27)   (1.04)
Total distributions   (1.91)   (1.60)   (1.58)   (1.59)   (1.58)
Net asset value, end of year  $37.10   $32.66   $29.26   $30.43   $30.00 
TOTAL RETURN(b)(c)   19.76%   17.68%   1.38%   6.94%   7.69%
RATIOS/SUPPLEMENTAL DATA:                         
Net assets, end of year (000s)  $921,035   $573,540   $525,950   $536,913   $373,488 
Ratios to Average Net Assets (including interest expense)                         
Ratio of expenses to average net assets excluding fee waivers and reimbursements(d)(e)   2.01%   2.09%   2.15%   2.20%   2.43%
Ratio of expenses to average net assets including fee waivers and reimbursements(e)   2.04%   2.06%   2.17%   2.21%   2.37%
Ratio of net investment income to average net assets(e)   1.06%   1.65%   1.53%   1.10%   0.71%
Ratios to Average Net Assets (excluding interest expense)                         
Ratio of expenses to average net assets excluding fee waivers and reimbursements(d)(e)   1.92%   1.98%   1.91%   1.94%   1.99%
Ratio of expenses to average net assets including fee waivers and reimbursements(e)   1.95%   1.95%   1.93%   1.95%   1.93%
Portfolio turnover rate   4%   26%   27%   8%   13%

 

(a)Per share amounts are calculated using the average shares method.
(b)Includes adjustments in accordance with accounting principles generally accepted in the United States and, consequently, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset values and returns for shareholder transactions.
(c)Total returns are historical in nature and assumes changes in net asset value per share, reinvestment of dividends and capital gains distributions, if any, and does not reflect the impact of sales charges. Had the Advisor not absorbed a portion of the Fund expenses, total returns would have been lower.
(d)Represents the ratio of expenses to average net assets absent fee waivers expense reimbursement and/or recoupment by the Advisor.
(e)The ratios of expenses to average net assets and net investment income to average net assets do not directly reflect the expenses of the underlying institutional private real estate investments in which the Fund invests. The Fund invests in each underlying institutional private real estate investment based upon its net asset value, inclusive of management fees, which typically range from 0.50% to 1.30% on an annualized basis. The Fund’s Total Return is reported net of all fees and expenses.

 

The accompanying notes are an integral part of these financial statements.  
Annual Report | September 30, 2022 21

 

 

 

Bluerock Total Income+ Real Estate Fund - Class C Financial Highlights
The table below sets forth financial data for one share of beneficial interest outstanding throughout each year presented.

 

   For the Year Ended September 30, 2022   For the Year Ended September 30, 2021   For the Year Ended September 30, 2020   For the Year Ended September 30, 2019   For the Year Ended September 30, 2018 
Net asset value, beginning of year  $30.90   $27.89   $29.22   $29.02   $28.63 
INCOME FROM INVESTMENT OPERATIONS:                         
Net investment income/(loss)(a)   0.12    0.26    0.23    0.10    (0.01)
Net realized and unrealized gain/(loss)   5.63    4.27    (0.04)   1.63    1.93 
Total from investment operations   5.75    4.53    0.19    1.73    1.92 
DISTRIBUTIONS:                         
From net investment income           (0.06)        
From net realized gain on investments   (0.42)   (0.63)   (0.98)   (0.32)   (0.52)
Return of capital   (1.38)   (0.89)   (0.48)   (1.21)   (1.01)
Total distributions   (1.80)   (1.52)   (1.52)   (1.53)   (1.53)
Net asset value, end of year  $34.85   $30.90   $27.89   $29.22   $29.02 
TOTAL RETURN(b)(c)   18.90%   16.81%   0.63%   6.15%   6.86%
RATIOS/SUPPLEMENTAL DATA:                         
Net assets, end of year (000s)  $706,009   $486,734   $437,183   $401,507   $290,549 
Ratios to Average Net Assets (including interest expense)                         
Ratio of expenses to average net assets excluding fee waivers and reimbursements(d)(e)   2.74%   2.81%   2.90%   2.95%   3.18%
Ratio of expenses to average net assets including fee waivers and reimbursements(e)   2.74%   2.81%   2.92%   2.96%   3.12%
Ratio of net investment income/(loss) to average net assets(e)   0.36%   0.91%   0.79%   0.35%   (0.04)%
Ratios to Average Net Assets (excluding interest expense)                         
Ratio of expenses to average net assets excluding fee waivers and reimbursements(d)(e)   2.65%   2.70%   2.66%   2.69%   2.74%
Ratio of expenses to average net assets including fee waivers and reimbursements(e)   2.65%   2.70%   2.68%   2.70%   2.68%
Portfolio turnover rate   4%   26%   27%   8%   13%

 

(a)Per share amounts are calculated using the average shares method.
(b)Includes adjustments in accordance with accounting principles generally accepted in the United States and, consequently, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset values and returns for shareholder transactions.
(c)Total returns are historical in nature and assumes changes in net asset value per share, reinvestment of dividends and capital gains distributions, if any. Had the Advisor not absorbed a portion of the Fund expenses, total returns would have been lower.
(d)Represents the ratio of expenses to average net assets absent fee waivers expense reimbursement and/or recoupment by the Advisor.
(e)The ratios of expenses to average net assets and net investment income (loss) to average net assets do not directly reflect the expenses of the underlying institutional private real estate investments in which the Fund invests. The Fund invests in each underlying institutional private real estate investment based upon its net asset value, inclusive of management fees, which typically range from 0.50% to 1.30% on an annualized basis. The Fund’s Total Return is reported net of all fees and expenses.

 

The accompanying notes are an integral part of these financial statements.
22

 

 

Bluerock Total Income+ Real Estate Fund - Class I Financial Highlights
The table below sets forth financial data for one share of beneficial interest outstanding throughout each year presented.

 

   For the Year Ended September 30, 2022   For the Year Ended September 30, 2021   For the Year Ended September 30, 2020   For the Year Ended September 30, 2019   For the Year Ended September 30, 2018 
Net asset value, beginning of year  $33.35   $29.80   $30.92   $30.40   $29.70 
INCOME FROM INVESTMENT OPERATIONS:                         
Net investment income(a)   0.48    0.58    0.56    0.42    0.29 
Net realized and unrealized gain/(loss)   6.12    4.61    (0.07)   1.72    2.01 
Total from investment operations   6.60    5.19    0.49    2.14    2.30 
DISTRIBUTIONS:                         
From net investment income           (0.06)        
From net realized gain on investments   (0.42)   (0.63)   (1.04)   (0.32)   (0.54)
Return of capital   (1.54)   (1.01)   (0.51)   (1.30)   (1.06)
Total distributions   (1.96)   (1.64)   (1.61)   (1.62)   (1.60)
Net asset value, end of year  $37.99   $33.35   $29.80   $30.92   $30.40 
TOTAL RETURN(b)(c)   20.09%   17.99%   1.61%   7.23%   7.91%
RATIOS/SUPPLEMENTAL DATA:                         
Net assets, end of year (000s)  $5,288,747   $2,012,129   $1,341,848   $1,040,017   $471,116 
Ratios to Average Net Assets (including interest expense)                         
Ratio of expenses to average net assets excluding fee waivers and reimbursements(d)(e)   1.77%   1.83%   1.91%   1.94%   2.22%
Ratio of expenses to average net assets including fee waivers and reimbursements(e)   1.78%   1.81%   1.91%   1.95%   2.15%
Ratio of net investment income to average net assets(e)   1.30%   1.89%   1.82%   1.38%   0.95%
Ratios to Average Net Assets (excluding interest expense)                         
Ratio of expenses to average net assets excluding fee waivers and reimbursements(d)(e)   1.68%   1.72%   1.67%   1.69%   1.75%
Ratio of expenses to average net assets including fee waivers and reimbursements(e)   1.69%   1.70%   1.67%   1.70%   1.68%
Portfolio turnover rate   4%   26%   27%   8%   13%

 

(a)Per share amounts are calculated using the average shares method.
(b)Includes adjustments in accordance with accounting principles generally accepted in the United States and, consequently, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset values and returns for shareholder transactions.
(c)Total returns are historical in nature and assumes changes in net asset value per share, reinvestment of dividends and capital gains distributions, if any. Had the Advisor not absorbed a portion of the Fund expenses, total returns would have been lower.
(d)Represents the ratio of expenses to average net assets absent fee waivers expense reimbursement and/or recoupment by the Advisor.
(e)The ratios of expenses to average net assets and net investment income to average net assets do not directly reflect the expenses of the underlying institutional private real estate investments in which the Fund invests. The Fund invests in each underlying institutional private real estate investment based upon its net asset value, inclusive of management fees, which typically range from 0.50% to 1.30% on an annualized basis. The Fund’s Total Return is reported net of all fees and expenses.

 

The accompanying notes are an integral part of these financial statements.  
Annual Report | September 30, 2022 23

 

 

 

Bluerock Total Income+ Real Estate Fund - Class L Financial Highlights
The table below sets forth financial data for one share of beneficial interest outstanding throughout each year presented.

 

   For the Year Ended September 30, 2022   For the Year Ended September 30, 2021   For the Year Ended September 30, 2020   For the Year Ended September 30, 2019   For the Year Ended September 30, 2018 
Net asset value, beginning of period/year  $32.31   $29.02   $30.25   $29.89   $29.34 
INCOME FROM INVESTMENT OPERATIONS:                         
Net investment income(a)   0.29    0.42    0.37    0.26    0.13 
Net realized and unrealized gain/(loss)   5.90    4.46    (0.03)   1.68    1.99 
Total from investment operations   6.19    4.88    0.34    1.94    2.12 
DISTRIBUTIONS:                         
From net investment income           (0.06)        
From net realized gain on investments   (0.42)   (0.63)   (1.01)   (0.32)   (0.53)
Return of capital   (1.47)   (0.96)   (0.50)   (1.26)   (1.04)
Total distributions   (1.89)   (1.59)   (1.57)   (1.58)   (1.57)
                          
Net asset value, end of period/year  $36.61   $32.31   $29.02   $30.25   $29.89 
TOTAL RETURN(b)(c)   19.46%   17.38%   1.14%   6.70%   7.40%
                          
RATIOS/SUPPLEMENTAL DATA:                         
Net assets, end of period/year (000s)  $124,675   $87,645   $73,014   $88,605   $42,975 
Ratios to Average Net Assets (including interest expense)                         
Ratio of expenses to average net assets excluding fee waivers and reimbursements(d)(e)   2.28%   2.35%   2.40%   2.44%   2.84%
Ratio of expenses to average net assets including fee waivers and reimbursements(d)   2.29%   2.31%   2.41%   2.46%   2.74%
Ratio of net investment income to average net assets(d)   0.81%   1.40%   1.25%   0.87%   0.44%
                          
Ratios to Average Net Assets (excluding interest expense)                         
Ratio of expenses to average net assets excluding fee waivers and reimbursements(d)(e)   2.20%   2.24%   2.17%   2.18%   2.27%
Ratio of expenses to average net assets including fee waivers and reimbursements(d)   2.21%   2.20%   2.18%   2.20%   2.17%
Portfolio turnover rate   4%   26%   27%   8%   13%

 

(a)Per share amounts are calculated using the average shares method.
(b)Total returns are historical in nature and assumes changes in net asset value per share, reinvestment of dividends and capital gains distributions, if any, and does not reflect the impact of sales charges. Had the Advisor not absorbed a portion of the Fund expenses, total returns would have been lower.
(c)Includes adjustments in accordance with accounting principles generally accepted in the United States and, consequently, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset values and returns for shareholder transactions.
(d)Represents the ratio of expenses to average net assets absent fee waivers expense reimbursement and/or recoupment by the Advisor.
(e)The ratios of expenses to average net assets and net investment income (loss) to average net assets do not directly reflect the expenses of the underlying institutional private real estate investments in which the Fund invests. The Fund invests in each underlying institutional private real estate investment based upon its net asset value, inclusive of management fees, which typically range from 0.50% to 1.30% on an annualized basis. The Fund’s Total Return is reported net of all fees and expenses.

 

The accompanying notes are an integral part of these financial statements.
24
 

 

Bluerock Total Income+ Real Estate Fund - Class M Financial Highlights
The table below sets forth financial data for one share of beneficial interest outstanding throughout the period presented.

 

   For the Period Ended September 30, 2022 (a) 
Net asset value, beginning of period/year  $31.78 
INCOME FROM INVESTMENT OPERATIONS:     
Net investment income(b)   0.14 
Net realized and unrealized gain   4.39 
Total from investment operations   4.53 
DISTRIBUTIONS:     
Return of capital   (1.38)
Total distributions   (1.38)
      
Net asset value, end of period/year  $34.93 
TOTAL RETURN(c)(d)   14.35%(e)
      
RATIOS/SUPPLEMENTAL DATA:     
Net assets, end of period/year (000s)  $135,362 
Ratios to Average Net Assets (including interest expense)     
Ratio of expenses to average net assets excluding fee waivers and reimbursements(f)(g)   2.46%(h)
Ratio of expenses to average net assets including fee waivers and reimbursements(f)   2.46%(h)
Ratio of net investment income to average net assets(f)   0.54%(h)
      
Ratios to Average Net Assets (excluding interest expense)     
Ratio of expenses to average net assets excluding fee waivers and reimbursements(f)(g)   2.35%(h)
Ratio of expenses to average net assets including fee waivers and reimbursements(f)   2.35%(h)
Portfolio turnover rate   4%
      

 

(a)Class M commenced operations on December 27, 2021.
(b)Per share amounts are calculated using the average shares method.
(c)Total returns are historical in nature and assumes changes in net asset value per share, reinvestment of dividends and capital gains distributions, if any. Had the Advisor not absorbed a portion of the Fund expenses, total returns would have been lower.
(d)Includes adjustments in accordance with accounting principles generally accepted in the United States and, consequently, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset values and returns for shareholder transactions.
(e)Not annualized.
(f)The ratios of expenses to average net assets and net investment income (loss) to average net assets do not directly reflect the expenses of the underlying institutional private real estate investments in which the Fund invests. The Fund invests in each underlying institutional private real estate investment based upon its net asset value, inclusive of management fees, which typically range from 0.50% to 1.30% on an annualized basis. The Fund’s Total Return is reported net of all fees and expenses.
(g)Represents the ratio of expenses to average net assets absent fee waivers expense reimbursement and/or recoupment by the Advisor.
(h)Annualized.

 

The accompanying notes are an integral part of these financial statements.  
Annual Report | September 30, 2022 25

 

 

Bluerock Total Income+ Real Estate Fund Financial Highlights
The table below sets forth financial data for one share of beneficial interest outstanding throughout each year presented.

 

Information about the Fund's senior securities as of each year is shown in the following table:

 

   September 30, 2022   September 30, 2021   September 30, 2020   September 30, 2019   September 30, 2018 
Total Amount Outstanding under Line of Credit (000's)  $350,000   $   $274,000   $148,100   $103,200 
Asset Coverage Per $1,000 of Line of Credit(a)   21,502    N/A    9,679    14,957    12,416 

 

(a)Calculated as the difference between the Fund's total assets and total liabilities (excluding the indebtedness represented by the Line of Credit) and dividing by the total amount outstanding on the Line of Credit. The Asset Coverage Ratio is then multiplied by $1,000 to determine the "Asset Coverage Per $1,000 of Line of Credit Outstanding).

 

The accompanying notes are an integral part of these financial statements.
26
 

 

Bluerock Total Income+ Real Estate Fund Notes to Financial Statements
  September 30, 2022

 

1. ORGANIZATION

 

 

Bluerock Total Income+ Real Estate Fund (the “Fund” or the “Trust”) was organized as a Delaware statutory trust on May 25, 2012 and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as a closed-end management investment company that operates as an interval fund with a continuous offering of Fund shares. The Fund is non-diversified. The Fund’s investment advisor is Bluerock Fund Advisor, LLC (the “Advisor”). The Fund’s primary investment objective is to generate current income while secondarily seeking long-term capital appreciation with low to moderate volatility and low correlation to the broader markets. The Fund pursues its investment objective by investing, under normal circumstances, at least 80% of its net assets plus the amount of any borrowings for investment purposes, in real estate industry securities, primarily in income producing equity and debt securities.

 

The Fund currently offers Class A, Class C, Class I, Class L and Class M shares. Class A shares commenced operations on October 22, 2012 and are offered at net asset value plus a maximum sales charge of 5.75%. Class A shareholders who tender for repurchase Class A shares that were purchased in amounts of $1,000,000 or more that have been held less than one year (365 days) from the purchase date will be subject to an early withdrawal charge of 1.00% of the original purchase price. Class C and Class I shares commenced operations on April 1, 2014 and are offered at net asset value. Class C shares are subject to an early withdrawal charge of 1.00% if redeemed less than 365 days after purchase. Class L shares commenced operations on June 1, 2017 and are offered at net asset value plus a maximum sales charge of 4.25%. Class M shares commenced operations on December 27, 2021 and are offered at net asset value. Each class represents an interest in the same assets of the Fund and classes are identical except for differences in their sales charge structures and ongoing shareholder service and distribution charges. All classes of shares have equal voting privileges except that each class has exclusive voting rights with respect to its shareholder service and/or distribution plans. The Fund’s income, expenses (other than class specific shareholder service and distribution fees) and realized and unrealized gains and losses are allocated proportionately each day based upon the relative net assets of each class.

 

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

 

The following is a summary of significant accounting policies followed by the Fund in preparation of its financial statements. These policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 946 "Financial Services – Investment Companies."

 

A. Security Valuation – Securities listed on an exchange are valued at the last reported sale price at the close of the regular trading session of the exchange on the business day the value is being determined, or in the case of securities listed on NASDAQ, at the NASDAQ Official Closing Price. In the absence of a sale such securities shall be valued at the last bid price. Debt securities, including restricted securities, are valued based on evaluated prices received from a third party pricing vendor or from brokers who make markets in such securities. Debt securities are valued by pricing vendors who utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity and type or by broker-supplied prices. When independent prices are unavailable or unreliable, debt securities may be valued utilizing pricing methodologies which consider similar factors that would be used by third party pricing vendors. Debt securities are generally categorized as Level 2 in the hierarchy but may be Level 3 depending on the circumstances. The Fund may invest a portion of its assets in below investment grade securities. The value of these securities can be more volatile due to changes in the credit quality of the issuer and is sensitive to changes in economic, market and regulatory conditions. Short-term investments that mature in 60 days or less may be valued at amortized cost, provided such valuations represent fair value.

 

Valuation of Underlying Funds – The Fund may invest in portfolios of open-end and closed-end investment companies and exchange traded funds (“ETFs” and collectively the “Underlying Funds”). The Underlying Funds value securities in their portfolios for which market quotations are readily available at their market values (generally the last reported sale price) and all other securities and assets/liabilities at their fair value to the methods established by the board of directors of the Underlying Funds.

 

Open-end investment companies are valued at their respective net asset values (“NAV”) as reported by such investment companies. The shares of many closed-end investment companies, after their initial public offering, frequently trade at a price per share, which is different than the NAV per share. The difference represents a market premium or market discount of such shares. There can be no assurances that the market discount or market premium on shares of any closed-end investment company purchased by the Fund will not change. An ETF trades like common stock and typically represents a fixed portfolio of securities designed to track the performance and dividend yield of a particular domestic or foreign market index. The Fund may purchase an investment vehicle to temporarily gain exposure to a portion of the U.S. or a foreign market. The risks of owning such investment vehicles generally reflect the risks of owning the underlying securities they are designed to track, although any lack of liquidity could result in it being more volatile. Additionally, such investment vehicles have fees and expenses that reduce their value relative to their underlying holdings.

 

Annual Report | September 30, 2022 27
 

 

Bluerock Total Income+ Real Estate Fund Notes to Financial Statements
  September 30, 2022

 

When price quotations for certain securities are not readily available, or if the available quotations are not believed to be reflective of market value by the Advisor, those securities will be valued at “fair value” as determined in good faith by the Advisor, who has been named as the valuation designee by the Fund’s Board of Trustees (the “Board”). There can be no assurance that the Fund could purchase or sell a portfolio security at the price used to calculate the Fund’s NAV.

 

Fair valuation procedures may be used to value a substantial portion of the assets of the Fund. The Fund may use the fair value of a security to calculate its NAV when, for example, (1) a portfolio security is not traded in a public market or the principal market in which the security trades is closed, (2) trading in a portfolio security is suspended and not resumed prior to the normal market close, (3) a portfolio security is not traded in significant volume for a substantial period, or (4) the Advisor determines that the quotation or price for a portfolio security provided by a broker-dealer or independent pricing service is inaccurate.

 

Valuation of Private Real Estate Securities – The Fund invests a significant portion of its assets in Private Real Estate Securities (“Private Funds”), which includes securities that invest in real estate assets (“Private REITs”) and securities that invest in debt instruments secured or otherwise supported by real estate assets (“Private Debt”). The Private Funds measure their investment assets at fair value, and report a NAV per share on a calendar quarter basis. In accordance with ASC 820-10, the Fund has elected to apply the practical expedient or its equivalent, and to value its investments in Private Funds at their respective NAVs at each quarter. For non-calendar quarter-end days, the Advisor estimates the fair value of each Private REIT by adjusting the most recent NAV for each Private REIT by the change in a proprietary benchmark that the Advisor has deemed to be representative of the entire Private REIT market. For Private Debt, the Fund accrues income on a daily basis for each Private Debt investment. As of September 30, 2022, all of the Fund’s investments in Private Funds were valued at their respective NAVs.

 

Valuation of Public Non-Traded Equity Real Estate Securities – The Fund may invest a portion of its assets in Public Non-Traded Equity Real Estate Securities (“Public Non-Traded ERES”). The Public Non-Traded ERES do not report periodic NAVs with enough frequency to be valued using the practical expedient. The Advisor determines the fair value of Public Non-Traded ERES on a daily basis by considering various factors such as the most recent published NAV, the transaction price, secondary market trades, shareholder redemption and dividend reinvestment programs, and potential illiquidity discounts.

 

The “fair value” of securities may be difficult to determine and thus judgment plays a greater role in the valuation process. The fair valuation methodology may include or consider the following guidelines, as appropriate: (1) evaluation of all relevant factors, including but not limited to, pricing history, current market level, supply and demand of the respective security; (2) comparison to the values and current pricing of securities that have comparable characteristics; (3) knowledge of historical market information with respect to the security; (4) other factors relevant to the security which would include, but not be limited to, duration, yield, fundamental analytical data, the Treasury yield curve, and credit quality.

 

The values assigned to fair valued investments are based on available information and do not necessarily represent amounts that might ultimately be realized, since such amounts depend on future developments inherent in long-term investments. Changes in the fair valuation of portfolio securities may be less frequent and of greater magnitude than changes in the price of portfolio securities valued at their last sale price, by an independent pricing service, or based on market quotations. Imprecision in estimating fair value can also impact the amount of unrealized appreciation or depreciation recorded for a particular portfolio security and differences in the assumptions used could result in a different determination of fair value, and those differences could be material.

 

The Fund utilizes various methods to measure the fair value of its investments on a recurring basis. GAAP establishes a hierarchy that prioritizes inputs to valuation methods. The three levels of input are:

 

  Level 1 – Unadjusted quoted prices in active markets for identical assets and liabilities that the Fund has the ability to access.
     
 

Level 2 –

Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data. 
     
  Level 3 –

Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.

 

 

28  

 

 

Bluerock Total Income+ Real Estate Fund Notes to Financial Statements
  September 30, 2022

 

The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.

 

The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The valuation techniques used by the Fund to measure fair value during the year ended September 30, 2022, maximized the use of observable inputs and minimized the use of unobservable inputs.

 

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following tables summarize the inputs used as of September 30, 2022 for the Fund’s assets measured at fair value:

 

Investments in Securities at Value  Level 1   Level 2   Level 3   Total 
Private Real Estate Securities(a)  $   $   $   $6,681,494,665 
Real Estate Debt Securities       288,835,314        288,835,314 
Public Non-Traded Real Estate Investment Trusts           39,245    39,245 
Publicly Traded Real Estate Investment Trusts   141,431,450            141,431,450 
Open-Ended Mutual Fund   12,531,251            12,531,251 
Short Term Investments   353,505,756            353,505,756 
TOTAL  $507,468,457   $288,835,314   $39,245   $7,477,837,681 

 

(a)In accordance with ASC 820-10, investments that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Portfolio of Investments and Statement of Assets and Liabilities.

 

B. Security Transactions and Investment Income – Investment security transactions are accounted for on a trade date basis. Cost is determined and gains and losses are based upon the specific identification method for both financial statement and federal income tax purposes. Dividend income is recorded on the ex-dividend date and interest income is recorded on the accrual basis. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the security received. Purchase discounts and premiums on securities are accreted and amortized to the earliest call date of the respective securities.

 

C. Federal Income Taxes – The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies and will distribute all of its taxable income, if any to shareholders. Accordingly, no provision for Federal income taxes is required in the financial statements.

 

The Fund recognizes the tax benefits of uncertain tax positions only when the position is “more likely than not” to be sustained assuming examination by tax authorities. Management has reviewed the tax positions and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions related to the open tax years (2019-2021) or expected to be taken in the Fund’s 2022 tax returns. The Fund identifies its major tax jurisdiction as U.S. Federal. The Fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the year ended September 30, 2022, the Fund did not incur any interest or penalties. Generally tax authorities can examine tax returns filed for the last three years.

 

D. Distributions to Shareholders – Distributions from investment income are declared and paid quarterly. Distributions from net realized capital gains, if any, are declared and paid annually and are recorded on the ex-dividend date. The character of income and gains to be distributed is determined in accordance with income tax regulations, which may differ from GAAP.

 

For the year ended September 30, 2022, the Fund declared distributions to shareholders in the amount of $289,941,633, which resulted in $160,546,584 elected to be paid in cash and $129,395,049 that was reinvested through the Fund’s dividend reinvestment policy. During this same period, the Fund had total investment income of $158,540,317, net realized gains/(loss) on investments totaling $4,453,394, net change in unrealized appreciation on investments of $774,204,482 and net expenses of $100,004,033.

 

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Bluerock Total Income+ Real Estate Fund Notes to Financial Statements
  September 30, 2022

 

The Fund’s primary investment objective is to generate current income while secondarily seeking long-term capital appreciation with low to moderate volatility and low correlation to the broader markets. The Fund’s total return is expected to be comprised of income plus realized gains and unrealized gains, less Fund-level expenses. Therefore, a portion of the Fund’s total return has been comprised of unrealized gains.

 

The Fund’s distributions for any period may be higher or lower than the Fund’s net return and therefore should not be used as a measure of performance or confused with yield or income generated by the Fund’s underlying investments. Further, the actual distribution amounts and sources of those amounts for tax reporting purposes will depend upon the Fund’s investment experience during its fiscal year and may be subject to changes based on tax regulations. Distributions in excess of the Fund’s total return will cause the Fund’s NAV to decline. During the year ended September 30, 2022, the Fund’s Class A Shares had a starting NAV of $32.66, paid distributions of $1.91 and had an ending NAV of $37.10. The Fund’s Class C Shares had a starting NAV of $30.90, paid distributions of $1.80 and had an ending NAV of $34.85. The Fund’s Class I Shares had a starting NAV of $33.35, paid distributions of $1.96 and had an ending NAV of $37.99. The Fund’s Class L Shares had a starting NAV of $32.31, paid distributions of $1.89 and had an ending NAV of $36.61. The Fund’s Class M Shares had a starting NAV of $31.78, paid distributions of $1.38 and had an ending NAV of $34.93.

 

The Fund’s distribution policy is expected to result in distributions that equal a fixed percentage of the Fund’s current net asset value per share. All or a portion of a distribution may consist of a return of capital (i.e. from your original investment). Shareholders should not assume that the source of a distribution from the Fund is net profit. 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. Investors should not draw any conclusions about the Fund’s investment performance from the amount of its distribution.

 

The Fund’s historical NAV details are available on the Fund’s website at https://bluerock.com/ti-fund/performance.

 

E. Cash and Cash Equivalents – Cash and cash equivalents are held with a financial institution. The asset of the Funds may be placed in deposit accounts at U.S. banks and such deposits generally exceed Federal Deposit Insurance Corporation (“FDIC”) insurance limits. The FDIC insures deposit accounts up to $250,000 for each account holder. At September 30, 2022, the Fund held $6,683,478 with the custodian.

 

F. Indemnification – The Trust indemnifies its officers, trustees and distributor for certain liabilities that may arise from the performance of their duties to the Trust. Additionally, in the normal course of business, the Fund enters into contracts that contain a variety of representations and warranties and which provide general indemnities. The Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund that have not yet occurred. However, based on experience, the Trust expects the risk of loss due to these warranties and indemnities to be remote.

 

3. RELATED-PARTY TRANSACTIONS, SERVICE PROVIDERS AND TRUSTEE COMPENSATION

 

 

A. Advisory Agreement and Expense Limitation Agreement – Pursuant to an investment management agreement between the Trust and the Advisor, (the “Advisory Agreement”), investment advisory services are provided to the Fund by the Advisor. Under the terms of the Advisory Agreement, the Advisor receives monthly fees calculated at an annual rate of 1.50% of the average daily net assets of the Fund. For the year ended September 30, 2022, the Advisor earned advisory fees of $77,004,479.

 

The Advisor and the Fund have entered into an expense limitation agreement (the “Expense Limitation Agreement”) under which the Advisor has contractually agreed to waive its fees and to pay or absorb the ordinary operating expenses of the Fund (excluding any taxes, interest, brokerage commissions, acquired fund fees and expenses, and extraordinary expenses, such as litigation or reorganization costs, but including organizational costs and offering costs), to the extent that such expenses exceed 1.95%, 2.70%, 1.70%, 2.20% and 2.45% of the Fund's average daily net assets attributable to the Class A, Class C, Class I, Class L and Class M shares, respectively. In consideration of the Advisor's agreement to limit the Fund's expenses, the Fund has agreed to repay the Advisor in the amount of any fees the Advisor previously waived or Fund expenses reimbursed, subject to the limitations that: (1) the reimbursement will be made if payable not more than three years from the date incurred; (2) the reimbursement may not be made if it would cause the expense limitation then in effect or in effect at the time of the waiver to be exceeded; and (3) the reimbursement is approved by the Fund's Board of Trustees. The Expense Limitation Agreement will remain in effect at least until January 31, 2023 unless and until the Board approves its modification or termination. After January 31, 2023, the Expense Limitation Agreement may be renewed at the Advisor's and Board's discretion. During the year ended September 30, 2022, the Advisor recouped previously waived fees of $501,484. Cumulative fees and/or expenses subject to recapture pursuant to the aforementioned conditions amounted to $3,218 and will expire during the 2024 fiscal year.

 

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Bluerock Total Income+ Real Estate Fund Notes to Financial Statements
  September 30, 2022

 

Sub-advisory services were provided to the Fund pursuant to agreements between the Advisor and each of Mercer Investment Management, Inc. (“Mercer”) and RREEF America, LLC (“RREEF” and together with Mercer, the “Sub-Advisors”). Under each of the terms of the sub-advisory agreements, the Advisor compensates the Sub-Advisors based on the Fund’s assets allocated to the respective Sub-Advisor. Under the terms of the Sub-Advisory Agreement with Mercer, the Sub-Advisor receives fees from the Advisor (not the Fund) as follows: 0.025% of the Fund’s assets invested in publicly traded real estate securities, and 0.15% for up to $250 million in total Fund assets, 0.13% for $250 million to $500 million in total Fund assets, 0.12% for $500 million to $750 million in total Fund assets, 0.10% for $750 million to $1 billion in total Fund assets, 0.08% for $1 billion to $1.3 billion in total Fund assets, 0.07% for $1.3 billion to $1.5 billion in total Fund assets, 0.06% for $1.5 billion to $2 billion in total Fund assets, and 0.05% for $2 billion or more in total Fund assets invested in private real estate assets.

 

Under the terms of a sub-advisory agreement between the Advisor and RREEF, RREEF receives fees from the Advisor (not the Fund) as follows: For the portion of the Fund invested in liquid real assets, sub-advisory fees are calculated at an annual rate of 0.60% for up to $50 million in assets allocated to RREEF, 0.55% for $50 million to $100 million in assets allocated to RREEF, and 0.50% for greater than $100 million in assets allocated to RREEF. For the portion of the Fund which is invested in non-publicly traded real estate related debt securities, sub-advisory fees are calculated at an annual rate of 0.75% for up to $350 million in assets allocated to RREEF, 0.60% in excess of $350 million through $700 million in assets allocated to RREEF, and 0.55% for assets in excess of $700 million allocated to RREEF.

 

B. Distributor – The distributor of the Fund is ALPS Distributors, Inc. (the “Distributor”). The Board has adopted, on behalf of the Fund, a Shareholder Services Plan and a Distribution Plan under which the Fund may compensate financial industry professionals for providing ongoing services in respect to clients with whom they have distributed shares of the Fund. Under the Shareholder Services Plan, the Fund pays up to 0.25% per year of the average daily net assets of each of Class A, Class C and Class L shares for such services. For the year ended September 30, 2022, the Fund incurred shareholder servicing fees of $1,841,110, $1,503,854 and $267,947 for Class A, Class C and Class L shares, respectively. Under the Distribution Plan, the Fund pays 0.75% per year of its average daily net assets for such services for Class C shares and Class M shares, respectively and 0.25% per year of its average daily net assets for such services for Class L shares. For the year ended September 30, 2022, the Fund incurred distribution fees of $4,511,561, $267,947 and $388,701 for Class C, Class L and Class M Shares, respectively.

 

The Distributor acts as the Fund’s principal underwriter in a continuous public offering of the Fund’s shares. For the year ended September 30, 2022, the Distributor received $7,401,756 in underwriting commissions for sales of Class A shares, of which $1,257,555 was retained by the principal underwriter or other affiliated broker-dealers. For the year ended September 30, 2022, the Distributor received $657,742 in underwriting commissions for sales of Class L shares, of which $147,967 was retained by the principal underwriter or other affiliated broker-dealers. For the year ended September 30, 2022, the Distributor received $1,873,579 in underwriting commissions for sales of Class C.

 

C. ALPS Fund Services, Inc. (“ALPS”) – ALPS provides administration, compliance, and fund accounting services to the Trust. Pursuant to separate servicing agreements with ALPS, the Fund pays ALPS customary fees for providing administration, compliance, and fund accounting services to the Fund.

 

D. Transfer Agent – DST Systems, Inc., an affiliate of ALPS, serves as transfer, dividend paying and shareholder servicing agent for the Fund (“Transfer Agent”) and receives customary fees from the Fund for providing such services.

 

E. Trustee Compensation – Effective April 1, 2022, each Trustee who is not affiliated with the Trust or the Advisor receives an annual fee of $60,000, paid quarterly, of which $40,000 is paid in cash and the remaining $20,000 is paid in the equivalent amount of the Fund shares, as well as reimbursement for any reasonable expenses incurred attending the meetings. Prior to April 1, 2022, each Trustee who is not affiliated with the Trust or Advisor received an annual fee of $37,500, paid quarterly, as well as reimbursement for any reasonable expenses incurred attending the meetings. None of the executive officers receive compensation from the Trust.

 

4. INVESTMENT TRANSACTIONS

 

 

The cost of purchases and proceeds from the sale of securities, other than short-term securities, for the year ended September 30, 2022, amounted to $3,630,813,958 and $187,797,273, respectively.

 

Annual Report | September 30, 2022 31
 

 

 

Bluerock Total Income+ Real Estate Fund Notes to Financial Statements
  September 30, 2022

 

5. REPURCHASE OFFERS / SHARES OF BENEFICIAL INTEREST

 

 

Pursuant to Rule 23c-3 under the 1940 Act, the Fund offers shareholders on a quarterly basis the option of redeeming shares, at NAV, of no less than 5% and no more than 25% of the shares outstanding on the Repurchase Request Deadline (as defined in the Fund’s prospectus). The Board shall determine the quarterly repurchase offer amount. There is no guarantee that shareholders will be able to sell all of the shares they desire in a quarterly repurchase offer, although each shareholder will have the right to require the Fund to purchase up to and including 5% of such shareholder's shares in each quarterly repurchase. Limited liquidity will be provided to shareholders only through the Fund's quarterly repurchases.

 

During the year ended September 30, 2022, the Fund completed four quarterly repurchase offers. The Fund offered to repurchase up to 5% of the number of its outstanding shares as of the Repurchase Pricing Dates. The results of the repurchase offers were as follows: 

 

   Repurchase Offer   Repurchase Offer   Repurchase Offer   Repurchase Offer 
Commencement Date  September 23, 2021   December 28, 2021   March 28, 2022   June 27, 2022 
Repurchase Request Deadline  November 4, 2021   February 8, 2022   May 9, 2022   August 8, 2022 
Repurchase Pricing Date  November 4, 2021   February 8, 2022   May 9, 2022   August 8, 2022 
                 
Net Asset Value as of Repurchase Offer Date:                
Class A  $32.94   $34.95   $36.86   $38.05 
Class C  $31.14   $32.97   $34.73   $35.78 
Class I  $33.65   $35.71   $37.70   $38.94 
Class L  $32.58   $34.54   $36.41   $37.56 
Class M   N/A   $32.98   $31.85   $35.06 
Amount Repurchased:                    
Class A  $15,070,359   $16,010,577   $20,966,182   $15,405,432 
Class C  $6,419,936   $7,236,350   $15,977,222   $10,439,874 
Class I  $32,177,074   $39,993,863   $116,044,924   $131,853,023 
Class L  $1,560,810   $1,135,656   $839,224   $2,116,575 
Class M   N/A   $   $60   $2,171 
                     
Total Number of Shares Tendered:   1,667,808    1,830, 424    4,130,013    4,138,804 
Percentage of Shares Tendered that were Repurchased:   100.00%   100.00%   100.00%   100.00%

 

6. DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF CAPITAL

 

 

The tax character of Fund distributions for the following years was as follows:

 

Year  Ordinary Income   Long-Term Capital Gain   Return of Capital 
2022  $   $46,376,673   $243,564,960 
2021       50,732,345    86,185,691 

 

As of September 30, 2022, the aggregate costs of investments, gross unrealized appreciation/(depreciation) and net unrealized appreciation for Federal tax purposes were as follows:

 

   Gross Appreciation (excess of value over tax cost)   Gross Depreciation (excess of tax cost over value)   Net Unrealized Appreciation   Cost of Investments for Income Tax Purposes 
  $1,579,835,986   $(190,958,946)  $1,388,877,040   $6,088,960,641 

 

The difference between book basis and tax basis distributable earnings and unrealized appreciation/(depreciation) is primarily attributable to the tax deferral of losses on wash sales and tax adjustments for partnerships.

 

32  

 

 

Bluerock Total Income+ Real Estate Fund Notes to Financial Statements
  September 30, 2022

 

As of September 30, 2022, the components of distributable earnings on a tax basis were as follows:

 

   Accumulated capital gains(losses)   Unrealized appreciation(depreciation)   Other cumulated effect of timing differences   Total 
  $(3,300,895)  $1,388,877,040   $(31,253,169)  $1,354,322,976 

 

The Fund elected to defer late year ordinary losses in the amount of $31,252,371.

 

The Fund elects to defer to the period ending September 30, 2023, capital losses recognized during the period 11/1 - 09/30/2022 in the amount of $3,300,895.

 

Permanent book and tax differences, primarily attributable to net operating losses and tax adjustments for partnerships, resulted in reclassification for the fiscal year ended September 30, 2022 as follows:

 

   Paid-in Capital   Total Distributable Earnings 
  $10,796,980   $(10,796,980)

 

Included in the amounts reclassified was a net operating loss offset to Paid-in Capital in the amount of $4,323,774.

 

7. EARLY WITHDRAWAL CHANGE

 

 

Class C shareholders and certain Class A shareholders who tender for repurchase shares that have been held less than one year (365 days) from the purchase date will be subject to an early withdrawal charge of 1.00% of the original purchase price with respect to such shares. The early withdrawal change does not apply to shares that were acquired through reinvestment of distributions or in connection with the death or disability of the shareholder. The early withdrawal change is paid directly to the Fund. For the year ended September 30, 2022, the Fund did not receive any such fees.

 

Annual Report | September 30, 2022 33

 

 

 

Bluerock Total Income+ Real Estate Fund Notes to Financial Statements
  September 30, 2022

 

8. COMMITMENTS AND CONTINGENCIES

 

 

Commitments – As of September 30, 2022, the Fund had unfunded commitments and/or contingencies for the below listed Private Real Estate Securities:

 

Security  Value   Unfunded Commitments   Redemption Frequency  Redemption Notice (Days)
AEW Core Property Trust  $29,419,553   $   Quarterly  45
Ares Industrial Real Estate Fund   174,350,739    200,000,000   Quarterly  90
Ares Real Estate Enhanced Income Fund   117,922,836       Quarterly  90
Bain Capital Real Estate Fund I   68,916,355    39,724,437   None  None
Bain Capital Real Estate Life Science   534,700    73,125,000   None  None
Blackstone Property Partners U.S.   153,859,175       Quarterly  90
Blackstone Property Partners Life Science   90,174,328    20,891,191   Annual  180
Bridge Debt Strategies Fund III, LP   58,830,843    5,574,061   None  None
Bridge Debt Strategies Fund IV, LP   63,445,215    35,409,145   None  None
Bridge Workforce Housing Fund I, LP   101,283,390    1,834,254   None  None
Brookfield Premier Real Estate Partners   417,651,230       Quarterly  90
Carlyle Property Investors   155,762,773    191,228,636   Quarterly  90
CBRE U.S. Core Partners, LP   279,785,708       Quarterly  60
CBRE U.S. Logistics Partners, LP   174,397,328    106,934,240   Quarterly  90
Clarion Gables Multifamily Trust   120,356,674    30,000,000   Quarterly  90
Clarion Lion Industrial Trust   315,471,943    15,000,000   Quarterly  90
Clarion Lion Properties Fund   257,445,039       Quarterly  90
Cortland Growth & Income Fund   417,037,909       Quarterly  90
Harrison Street Core Property Fund   58,165,567    28,000,000   Quarterly  45
Harrison Street Data Center Fund   16,340,706    8,373,786   None  None
Harrison Street Life Science Fund   10,297,138    8,323,500   None  None
H/2 Special Opportunities LP V   38,057,238    52,892,332   None  None
Invesco Core Real Estate Fund   163,459,597       Quarterly  45
Invesco U.S. Income Fund LP   223,458,762    80,000,000   Quarterly  45
IQHQ, Inc.   537,378,068    165,000,024   Annual  *
Morgan Stanley Prime Property Fund LLC   397,735,776       Quarterly  90
PGIM PRISA II   254,057,684       Quarterly  90
PGIM PRISA III   170,312,303    24,422,008   Quarterly  90
Principal Enhanced Property Fund LP   102,796,806       Quarterly  90
Prologis Targeted U.S. Logistics   656,681,181    250,000,000   Quarterly  90
Realterm Logistics Income Fund LP   346,508,231       Quarterly  90
RREEF America REIT II, Inc.   84,266,099       Quarterly  45
RREEF Core Plus Industrial Fund LP   214,638,318    37,500,000   Quarterly  60
Sentinel Real Estate Fund   163,732,776    27,639,752   Daily  *
Stockbridge Smart Markets Fund   50,656,784    32,424,818   Quarterly  45
Stockbridge Value Fund II   1,992,301    511,701   None  None
TA Realty Core Property Fund   87,835,323    100,000,000   Quarterly  45
TA Realty Logistics Fund   106,478,269       Quarterly  45
Total  $6,681,494,665   $1,534,808,885       

 

*Written notice required for redemption, no minimum timeline required.

 

Typically, when the Fund invests in a Private Fund, it makes a binding commitment to invest a specified amount of capital in the applicable Private Fund. The capital commitment may be drawn by the general partner of the Private Fund either all at once, or over time through a series of capital calls at the discretion of the general partner. As such, the Unfunded Commitments column above reflects the remaining amount of the Fund’s commitments to be called by the general partner of the Private Fund. Further, the organizational documents of the Private Funds in which the Fund invests typically have set redemption schedules and notification requirements. As such, the Redemption Frequency column above reflects the frequency in which the Private Fund accepts redemption requests and the Redemption Notice column reflects the number of days of advanced notice required. While redemptions can be requested at the frequency listed above, there is no guarantee the Fund will be paid all or any of the redemption amount at the time requested.

 

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Bluerock Total Income+ Real Estate Fund Notes to Financial Statements
  September 30, 2022

 

9. LINE OF CREDIT

 

 

Credit Facility – On November 23, 2016, the Fund entered into a secured, revolving line of credit agreement (“Credit Agreement”) with Credit Suisse for investment purposes, subject to annual renewal and other limitations of the 1940 Act for borrowings. Borrowings under the Credit Agreement are subject to a maximum borrowing amount of $600,000,000 and bear interest up to the rate of 3 month SOFR plus 205 basis points at the time of borrowing. During the year ended September 30, 2022, the average amount of borrowing outstanding, approximate weighted average interest rate on borrowings and total interest expense for the year ended September 30, 2022 were $141,795,322, 3.52% and $4,882,802 respectively. Note, of the total interest expense incurred, $2,337,288 was related to fees on unused borrowings. As of September 30, 2022, the Fund had outstanding borrowings of $350,000,000 under the Credit Agreement.

 

10. RISKS AND UNCERTAINTIES

 

 

In the normal course of business, the Fund faces certain risks and uncertainties. Set forth below is a summary of certain principal risks associated with the Fund. The following is not intended to be a complete list of all the potential risks associated with the Fund. For a more comprehensive list of potential risks the Fund may be subject to, please refer to the Fund’s Prospectus and Statement of Additional Information.

 

Market Risk. An investment in shares is subject to investment risk, including the possible loss of the entire principal amount invested. 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. In addition, the Fund is subject to the risk that geopolitical and other similar events will disrupt the economy on a national or global level. For instance, war, terrorism, market manipulation, government defaults, government shutdowns, political changes or diplomatic developments, public health emergencies (such as the spread of infectious diseases, pandemics and epidemics) and natural/environmental disasters can all negatively impact the securities markets.

 

The current novel coronavirus (COVID-19) global pandemic and the aggressive responses taken by many governments, including closing borders, restricting international and domestic travel, and the imposition of prolonged quarantines or similar restrictions, as well as the forced or voluntary closure of, or operational changes to, many retail and other businesses, have had negative impacts, and in many cases severe negative impacts, on markets worldwide. Potential impacts on the real estate market may include lower occupancy rates, decreased lease payments, defaults and foreclosures, among other consequences. It is not known how long such impacts, or any future impacts of other significant events described above, will or would last, but there could be a prolonged period of global economic slowdown.

 

Therefore, the Fund could lose money over short periods due to short-term market movements and over longer periods during more prolonged market downturns. The foregoing could impair the Fund’s ability to maintain operational standards, disrupt the operations of the Fund and its service providers, adversely affect the performance, value and liquidity of the Fund’s investments, and negatively impact the Fund’s performance and your investment in the Fund. 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.

 

Real Estate Industry Concentration Risk. The Fund will concentrate its investments in securities real estate industry issuers, and it may invest in real estate directly. As such, its portfolio will be significantly impacted by the performance of the real estate market and may experience more volatility and be exposed to greater risk than a more diversified portfolio. The value of companies engaged in the real estate industry is affected by: (i) changes in general economic and market conditions; (ii) changes in the value of real estate properties; (iii) risks related to local economic conditions, overbuilding and increased competition; (iv) increases in property taxes and operating expenses; (v) changes in zoning laws; (vi) casualty and condemnation losses; (vii) variations in rental income, neighborhood values or the appeal of property to tenants; (viii) the availability of financing; (ix) climate change and (x) changes in interest rates and leverage. There are also special risks associated with particular sectors, or real estate operations, including, but not limited to, those risks described below:

 

Retail Properties. Retail properties are affected by shifts in consumer demand due to demographic changes, changes in spending patterns and lease terminations.

 

Office Properties. Office properties are affected by a downturn in the businesses operated by their tenants.

 

Hospitality Properties. Hotel properties and other properties in the hospitality real estate sector, such as motels and extended-stay properties, are affected by declines in business and leisure travel.

 

Healthcare Properties. Healthcare properties are affected by potential federal, state and local laws governing licenses, certification, adequacy of care, pharmaceutical distribution, rates, equipment, personnel and other factors regarding operations, and the continued availability of revenue from government reimbursement programs.

 

Industrial Properties. Industrial properties are affected by downturns in the manufacturing, processing and shipping of goods.

 

Annual Report | September 30, 2022 35
 

 

Bluerock Total Income+ Real Estate Fund Notes to Financial Statements
  September 30, 2022

 

Multifamily Properties. Multifamily properties are affected by adverse economic conditions in the locale, oversupply and rent control laws.

 

Residential Properties. Residential properties can be significantly affected by the national, regional and local real estate markets. This segment of the real estate industry also is sensitive to interest rate fluctuations which can cause changes in the availability of mortgage capital and directly affect the purchasing power of potential homebuyers. Thus, residential properties can be significantly affected by changes in government spending, consumer confidence, demographic patterns and the level of new and existing home sales.

 

Shopping Centers. Shopping center properties are affected by changes in the local markets where their properties are located and dependent upon the successful operations and financial condition of their major tenants.

 

Self-Storage Properties. Self-storage properties are affected by changes to competing local properties, consumer and small business demand for storage space, and the ability of the management team.

 

Other factors may contribute to the risk of real estate investments:

 

Development Issues. Real estate development companies in which the Underlying Funds or the Fund may invest are affected by construction delays and insufficient tenant demand to occupy newly developed properties.

 

Lack of Insurance. Certain of the companies in the Fund’s portfolio may fail to carry comprehensive liability, fire, flood, wind or earthquake extended coverage and rental loss insurance, or insurance and may be subject to various policy specifications, limits and deductibles.

 

Dependence on Tenants. The ability of companies in the real estate industry in which the Fund may invest to make distributions to shareholders depends upon the ability of the tenants at their properties to generate enough income in excess of tenant operating expenses to make their lease payments.

 

Financial Leverage. Companies in the real estate industry in which the Fund may invest may be highly leveraged and financial covenants may affect their ability to operate effectively.

 

Financing Issues. Financial institutions in which the Fund may invest are subject to extensive government regulation. This regulation may limit both the amount and types of loans and other financial commitments a financial institution can make, and the interest rates and fees it can charge.

 

Environmental Issues. Owners of properties that may contain hazardous or toxic substances may be responsible for removal or remediation costs.

 

Credit Market Conditions. Instability in credit markets can potentially make it more difficult for borrowers to obtain financing or refinancing on attractive terms or at all. Conditions in the credit markets may expose borrowers to increased interest expenses for borrowed money and tightening underwriting standards. There is also a risk that a general lack of liquidity or other events in the credit markets may adversely affect the ability of issuers in whose securities the Fund invests to finance real estate developments and projects or refinance completed projects.

 

Credit Risk. It is possible that issuers of debt securities may not make scheduled interest and principal payments, resulting in losses to the Fund. In addition, the credit quality of securities held may be lowered if an issuer’s financial condition changes and this also may negatively impact the Fund’s returns on investment in such securities.

 

Fixed Income Risk. Typically, a rise in interest rates causes a decline in the value of fixed income securities. Current conditions may result in a rise in interest rates, which in turn may result in a decline in the value of the fixed income investments held by the Fund. As a result, for the present, interest rate risk may be heightened. Fixed income securities are also subject to default risk.

 

Institutional Investment Fund Risk. The Fund’s investment in Institutional Investment Funds will require it to bear a pro rata share of the vehicles’ expenses, including management and performance fees. The fees the Fund pays to invest in an Institutional Investment Fund may be higher than if the manager of the Institutional Investment Fund managed the Fund’s assets directly. The performance fees charged by certain Institutional Investment Funds may create an incentive for its manager to make investments that are riskier and/or more speculative than those it might have made in the absence of a performance fee. Furthermore, Institutional Investment Funds, like the other “Underlying Funds” in which the Fund may invest, are subject to specific risks, depending on the nature of the vehicle, and also may employ leverage such that their returns are more than one times that of their benchmark which could amplify losses suffered by the Fund when compared to unleveraged investments. Shareholders of the Institutional Investment Funds are not entitled to the protections of the 1940 Act. For example, these funds need not have independent boards, shareholder approval of advisory contracts may not be required, may leverage to an unlimited extent, and may engage in joint transactions with affiliates. These characteristics present additional risks for shareholders.

 

Lack of Control Over Institutional Investment Funds and Other Portfolio Investments. Once the Advisor or RREEF has selected an Institutional Investment Fund, Private REIT, Public REIT, or Other Public Investment Vehicle (each, an “Underlying Fund” and together, the “Underlying Funds”) for investment by the Fund, the Advisor and RREEF will have no control over the investment decisions made by any such Underlying Fund. Although the Fund and the Advisor or RREEF will evaluate regularly each Underlying Fund and its manager to determine whether their respective investment programs are consistent with the Fund’s investment objective, the Advisor and RREEF will not have any control over the investments made by any Underlying Fund. Even though the Underlying Funds are subject to certain constraints, the managers may change aspects of their investment strategies. The managers may do so at any time (for example, such change may occur immediately after providing the Advisor with the quarterly unaudited financial information for an Institutional Investment Fund). The Advisor or RREEF may reallocate the Fund’s investments among the Underlying Funds, but the Advisor’s ability to do so may be constrained by the withdrawal limitations imposed by certain of the Underlying Funds, which may prevent the Fund from reacting rapidly to market changes should an Underlying Fund fail to effect portfolio changes consistent with such market changes and the demands of the Advisor. Such withdrawal limitations may also restrict the Advisor’s ability to terminate investments in Underlying Funds that are poorly performing or have otherwise had adverse changes. The Advisor and RREEF will be dependent on information provided by the Underlying Fund, including quarterly unaudited financial statements, which if inaccurate could adversely affect the Advisor’s or RREEF’s ability to manage the Fund’s investment portfolio in accordance with its investment objectives.

 

36  

 

 

Bluerock Total Income+ Real Estate Fund Notes to Financial Statements
  September 30, 2022

 

Leveraging Risk. The use of leverage, such as borrowing money to purchase securities or otherwise invest the Fund’s assets, will cause the Fund to incur additional expenses and may significantly magnify the Fund’s losses in the event of adverse performance of the Fund’s underlying investments. In addition to any borrowing utilized by the Fund, the Underlying Funds in which the Fund invests may utilize leverage, subject to the limitations of their charters and operative documents. Leverage by Underlying Funds and/or the Fund has the effect of potentially increasing losses.

 

REIT Risk. The value of investments in REIT shares may decline because of adverse developments affecting the real estate industry and real property values. In general, real estate values can be affected by a variety of factors, including supply and demand for properties, the economic health of the country or of different regions, and the strength of specific industries that rent properties. Also, qualification as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”) in any particular year is a complex analysis that depends on a number of factors. There can be no assurance that an entity in which the Fund invests with the expectation that it will be taxed as a REIT will, in fact, qualify as a REIT. An entity that fails to qualify as a REIT would be subject to a corporate level tax, would not be entitled to a deduction for dividends paid to its shareholders and would not pass through to its shareholders the character of income earned by the entity.

 

Valuation of Institutional Investment Funds. Institutional Investment Funds are not publicly traded and the Fund may consider information provided by the institutional asset manager to determine the value of the Fund’s investment therein. The valuation provided by an institutional asset manager as of a specific date may vary from the actual sale price that may be obtained if such investment were sold to a third party. To determine the value of the Fund’s investment in Institutional Investment Funds, the Advisor considers, among other things, information provided by the Institutional Investment Funds, including quarterly unaudited financial statements, which if inaccurate could adversely affect the Advisor’s ability to value accurately the Fund’s shares. Institutional Investment Funds that invest primarily in publicly traded securities are more easily valued.

 

11. SUBSEQUENT EVENTS

 

 

The Fund completed a quarterly repurchase offer on November 7, 2022 which resulted in 100.00% of the shares tendered being repurchased for $372,407,801.

 

Subsequent events after the date of the Statement of Assets and Liabilities have been evaluated through the date the financial statements were issued. Except as stated above, management has concluded that there is no impact requiring adjustment or disclosure in the financial statements.

 

Annual Report | September 30, 2022 37
 

 

 

Bluerock Total Income+ Report of Independent Registered
Real Estate Fund Public Accounting Firm

 

 

To the Board of Trustees and the Shareholders of

Bluerock Total Income+ Real Estate Fund

 

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of Bluerock Total Income+ Real Estate Fund (the “Fund”), including the portfolio of investments, as of September 30, 2022, and the related statements of operations and cash flows for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights as noted in the table below, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of September 30, 2022, and the results of its operations and cash flows for the year then ended, the changes in its net assets for each of the years in the two-year period then ended and its financial highlights for each of the periods noted in the table below, in conformity with accounting principles generally accepted in the United States of America.

 

Class Financial Highlights Presented
Class A, Class C, Class I and Class L The financial highlights for each of the years in the five-year period ended September 30, 2022
Class M The financial highlights for the period December 27, 2021 (commencement of operations) through September 30, 2022

 

Basis for Opinion

These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities law and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audits included performing procedures to assess the risk of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of September 30, 2022 by correspondence with the custodian, brokers, and other appropriate parties. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

 

 

BBD, LLP

 

We have served as the auditor of Bluerock Total Income+ Real Estate Fund since 2012.

 

Philadelphia, Pennsylvania

November 29, 2022

 

38  

 

 

Bluerock Total Income+ Real Estate Fund Additional Information
  September 30, 2022 (Unaudited)

 

1. PROXY VOTING POLICIES AND VOTING RECORD

 

 

A description of the policies and procedures that the Fund uses to vote proxies relating to its portfolio securities is available without charge upon request by calling toll-free 844-819-8287 or on the Securities and Exchange Commission’s (“SEC”) website at http://www.sec.gov. Information regarding how the Fund voted proxies relating to underlying portfolio securities during the most recent 12-month period ended June 30th is available without charge upon request by calling toll-free 844-819-8287, or on the SEC’s website at http://www.sec.gov.

 

2. QUARTERLY PORTFOLIO HOLDINGS

 

 

The Fund files a monthly portfolio investments report with the SEC on Form N-PORT within 60 days after the end of the first and third quarters of each fiscal year. The filings are available upon request by calling 844-819-8287. Furthermore, you may obtain a copy of the filings on the SEC’s website at https://www.sec.gov.

 

3. TAX INFORMATION (UNAUDITED)

 

 

Pursuant to Section 852(b)(3) of the Internal Revenue Code, the Fund designated $46,376,673 as long-term capital gain distribution for the year ended September 30, 2022.

 

Annual Report | September 30, 2022 39
 

 

Bluerock Total Income+ Real Estate Fund Supplemental Information
  September 30, 2022 (Unaudited)

 

Following is a list of the Trustees and executive officers of the Trust and their principal occupations over the last five years. Unless otherwise noted, the address of each Trustee and Officer is c/o ALPS Fund Services, Inc., 1290 Broadway, Suite 1000, Denver, CO 80203.

 

INDEPENDENT TRUSTEES

 

Name, Year of Birth Position/ Term of Office* Principal Occupation During the Past Five Years Number of Portfolios in Fund Complex** Overseen by Trustee Other Directorships Held By Trustee During Last Five Years
Bobby Majumder, 1968 Trustee Since 2012 Member, Frost Brown Todd, LLC (September 2021 – Present); Partner, Reed Smith (May 2019 – August 2021); Partner, Perkins Coie LLP (2013 – May 2019). 2 Bluerock Residential Growth REIT, Inc. (2009 – Present); Bluerock High Income Institutional Credit Fund (2022 – Present)
Romano Tio, 1960 Trustee Since 2012 Senior Managing Director, Greystone (real estate lending, investment and advisory company) (2021 – present); Senior Managing Director, Ackman-Ziff Real Estate Capital Advisors (2017 – 2021); Co-Founder and Managing Director, RM Capital Management LLC (2009 - 2017). 2 Bluerock Residential Growth REIT, Inc. (2009 – Present). ; Bluerock High Income Institutional Credit Fund (2022 – Present)
Kamal Jafarnia, 1966 Trustee Since 2021 General Counsel for Lonsdale Digital Management, Inc. (fintech and investment management firm) (2021- present); General Counsel and CCO for Artivest Holdings and Altegris Investment Management (fintech enablement platform) (2018- 2021); Attorney at Law at Kamal Jafarnia (2018); Managing Director for Legal and Business Development for Provasi Capital Partners, LP (investment management firm) (2017 – 2018); General Counsel and CCO for WP Carey, Inc. (investment management firm) (2014 – 2017). 2 Ashford Hospitality Trust, Inc. (2013 - Present) Bluerock Residential Growth REIT, Inc. (2019 – Present). ; Bluerock High Income Institutional Credit Fund (2022 – Present)

 

INTERESTED TRUSTEES AND OFFICERS

 

Name, Year of Birth Position/ Term of Office* Principal Occupation During the Past Five Years Number of Portfolios in Fund Complex** Overseen by Trustee Other Directorships Held By Trustee During Last 5 Years
Ramin Kamfar, 1963 Trustee Since 2012 Chairman, Bluerock Real Estate, LLC (2002 – Present); Chairman, Bluerock Fund Advisor, LLC (2012 – Present) and Bluerock Asset Management, LLC (2018 – present). 2 Bluerock Residential Growth REIT (2008 – Present); Bluerock High Income Institutional Credit Fund (2021 – Present)
Simon Adamiyatt, 1962 Trustee Since 2019, Treasurer/ Chief Financial Officer Since 2018 Executive Director, Bluerock Real Estate, LLC (2018 – Present); Executive Director and Chief Financial Officer of Earthport, Plc (financial technology company) (May 2015 – January 2018). 1  

 

40  

 

 

Bluerock Total Income+ Real Estate Fund Supplemental Information
  September 30, 2022 (Unaudited)

 

INTERESTED TRUSTEES AND OFFICERS (CONTINUED)

 

Name, Year of Birth Position/ Term of Office* Principal Occupation During the Past Five Years Number of Portfolios in Fund Complex Overseen by Trustee Other Directorships held by Trustee During Last 5 Years
Jordan Ruddy, 1963 President Since 2013 Chief Operating Officer, Bluerock Real Estate, LLC (2002 – Present); President, Bluerock Fund Advisor, LLC (2013 – Present); President, Bluerock Asset Management, LLC (2020-Present); Director, Bluerock Asset Management, LLC (2018-2020) n/a n/a
Jason Emala, 1978 Secretary Since 2018 General Counsel/Chief Legal Officer/Chief Compliance Officer of the Advisor and various Bluerock entities (2018 – Present); VP and Asst. General Counsel, Cantor Fitzgerald (2016-2018). n/a n/a
Lucas D. Foss, 1977 Chief Compliance Officer Since 2022 Deputy Chief Compliance Officer, ALPS Holdings, Inc. since December 2017. Director of Compliance at Transamerica Asset Management (July 2015-  November 2017). n/a n/a

 

*The term of office for each Trustee and officer listed above will continue indefinitely. The Fund’s Statement of Additional Information includes additional information about the Trustees and is available upon request, free of charge, by calling toll-free 1-844-819-8287.
**The Fund Complex currently includes the Trust and Bluerock High Income Institutional Credit Fund.

 

Annual Report | September 30, 2022 41
 

 

Bluerock Total Income+ Real Estate Fund Privacy Policy
  September 30, 2022 (Unaudited)

 

FACTS WHAT DOES THE BLUEROCK TOTAL INCOME+ REAL ESTATE FUND DO WITH YOUR PERSONAL INFORMATION?
Why? Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What? The types of personal information we collect and share depend on the product or service you have with us. This information can include:
   
 

·       Social Security number

·       Assets

·       Retirement Assets

·       Transaction History

·       Checking Account Information

·       Purchase History

·       Account Balances

·       Account Transactions

·       Wire Transfer Instructions

     
  When you are no longer our customer, we may continue to share your personal information as described in this notice.
How?
 
All financial companies need to share customers’ personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers’ personal information; the reasons the Fund chooses to share; and whether you can limit this sharing.

 

Reasons we can share your personal information Does Bluerock Total Income+ Real Estate Fund share? Can you limit this sharing?
For our everyday business purposes – such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus Yes No
For our marketing purposes – to offer our products and services to you No We don't share
For joint marketing with other financial companies No We don't share
For our affiliates' everyday business purposes – information about your transactions and experiences No We don't share
For our affiliates' everyday business purposes – information about your creditworthiness No We don't share
For nonaffiliates to market to you No We don't share
Questions? Call 1-844-819-8287    

 

42  

 

 

Bluerock Total Income+ Real Estate Fund Privacy Policy
  September 30, 2022 (Unaudited)

 

Who We Are  
Who is providing this notice? Bluerock Total Income+ Real Estate Fund
What We Do  
How does Bluerock Total Income+ Real Estate Fund protect my personal information?

To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings.

 

Our service providers are held accountable for adhering to strict policies and procedures to prevent any misuse of your nonpublic personal information.

How does Bluerock Total Income+ Real Estate Fund collect my personal information?

We collect your personal information, for example, when you

 

·    Open an account

·    Provide account information

·    Give us your contact information

·    Make deposits or withdrawals from your account

·    Make a wire transfer

·    Tell us where to send the money

·    Tells us who receives the money

·    Show your government-issued ID

·    Show your driver's license

 

We also collect your personal information from other companies.

Why can't I limit all sharing?

Federal law gives you the right to limit only

 

·    Sharing for affiliates' everyday business purposes – information about your creditworthiness

·    Affiliates from using your information to market to you

·    Sharing for nonaffiliates to market to you

 

State laws and individual companies may give you additional rights to limit sharing.

Definitions  
Affiliates

Companies related by common ownership or control. They can be financial and nonfinancial companies.

 

·      Bluerock Total Income+ Real Estate Fund does not share with our affiliates.

Nonaffiliates

Companies not related by common ownership or control. They can be financial and nonfinancial companies

 

·      Bluerock Total Income+ Real Estate Fund does not share with nonaffiliates so they can market to you.

Joint marketing

A formal agreement between nonaffiliated financial companies that together market financial products or services to you.

 

·      Bluerock Total Income+ Real Estate Fund doesn’t jointly market.

 

Annual Report | September 30, 2022 43
 

 

 

Page Intentionally Left Blank

 

 

 

  

Page Intentionally Left Blank

 

 

 

Investment Adviser

Bluerock Fund Advisor, LLC

1345 Avenue of the Americas, 32nd Floor

New York, NY 10105

 

Distributor

ALPS Distributors, Inc.

1290 Broadway, Suite 1000

Denver, CO 80203

 

Legal Counsel

Thompson Hine LLP

41 South High Street, Suite 1700

Columbus, OH 43215

 

Independent Registered Public Accounting Firm

BBD, LLP

1835 Market Street, 3rd Floor

Philadelphia, PA 19103

 

 

 

How to Obtain Proxy Voting Information

Information regarding how the Fund votes proxies relating to portfolio securities for the 12 month period ended June 30th as well as a description of the policies and procedures that the Fund used to determine how to vote proxies is available without charge, upon request, by calling 1-844-819-8287 or by referring to the Securities and Exchange Commission’s (“SEC”) website at http://www.sec.gov.

 

How to Obtain 1st and 3rd Fiscal Quarter Portfolio Holdings

The Fund files a monthly portfolio investments report with the SEC on Form N-PORT within 60 days after the end of the first and third quarters of each fiscal year. The filings are available upon request by calling 844-819-8287. Furthermore, you may obtain a copy of the filings on the SEC’s website at http://www.sec.gov. 

 

 

(b)Not applicable.

 

Item 2. Code of Ethics.

 

(a)As of the end of the period covered by this report, the registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party.

 

(b)For purposes of this item, “code of ethics” means written standards that are reasonably designed to deter wrongdoing and to promote:

 

(1)Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
(2)Full, fair, accurate, timely, and understandable disclosure in reports and documents that a registrant files with, or submits to, the Commission and in other public communications made by the registrant;
(3)Compliance with applicable governmental laws, rules, and regulations;
(4)The prompt internal reporting of violations of the code to an appropriate person or persons identified in the code; and
(5)Accountability for adherence to the code. 

 

(c)During the period covered by this report, there were no amendments to the Fund’s Code of Ethics...

 

(d)Waivers: During the period covered by the report, the registrant has not granted any express or implicit waivers from the provisions of the code of ethics.

 

(e)Not applicable.

 

(f)The Registrant's code of ethics referred to in Item 2(a) above is attached as an Exhibit 13(a)(1), hereto.

 

Item 3. Audit Committee Financial Expert.

 

(a)The registrant’s board of directors has determined that the registrant has at least one audit committee financial expert serving on its audit committee. The registrant’s board of directors has determined that Romano Tio is an audit committee financial expert. Mr. Tio is “independent” as defined in paragraph (a)(2) of Item 3 to Form N-CSR.

 

Item 4. Principal Accountant Fees and Services.

 

(a) Audit Fees

 

September 30, 2022 – $25,500

September 30, 2021 – $23,000

 

Audit fees represent the aggregate fees billed for the fiscal years ended September 30, 2022 and September 30, 2021 for professional services rendered by the principal accountant for the audit of the Registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements.   

 

 

(b) Audit-Related Fees

 

September 30, 2022 - $2,500

September 30, 2021 - $0

 

The registrant was not billed for any fees for the fiscal years ended September 30, 2022 and September 30, 2021 for assurance and related services that were reasonably related to the performance of the audit of the registrant’s financial statement and not otherwise included under “Audit Fees” above.

 

(c) Tax Fees

 

September 30, 2022 - $3,000

September 30, 2021 - $3,000

 

Tax fees” shown above were for the preparation of Federal & State income tax returns, assistance with calculation of required income, capital gain and excise distributions and preparation of Federal excise tax returns.

 

(d) All Other Fees

 

September 30, 2022 - $0

September 30, 2021 - $0

 

The registrant was not billed any fees for products and services not otherwise included in items (a) - (c) shown above for the fiscal years ended September 30, 2022 and September 30, 2021.

 

(e) (1) Audit Committee’s Pre-Approval Policies and Procedures

 

The registrant’s Audit Committee is required to pre-approve all audit services and, when appropriate, any non-audit services (including audit-related, tax and all other services) to the registrant. The registrant’s Audit Committee also is required to pre-approve, when appropriate, any non-audit services (including audit-related, tax and all other services) to its adviser, or any entity controlling, controlled by or under common control with the adviser that provides ongoing services to the registrant, to the extent that the services may be determined to have an impact on the operations or financial reporting of the registrant. Services are reviewed on an engagement by engagement basis by the Audit Committee.

 

  (2) Percentages of Services Approved by the Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

 

  2022 2021
Audit Related 0% 0%
Tax Fees 0% 0%
Other Fees N/A N/A

 

(f)During the audit of registrant's financial statements for the most recent fiscal year, less than 50 percent of the hours expended on the principal accountant's engagement were attributed to work performed by persons other than the principal accountant's full-time, permanent employees.

 

(g)The aggregate non-audit fees billed by the registrant's accountant for services rendered to the registrant, and rendered to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant:

 

 

September 30, 2022 - $0

September 30, 2021 - $0

 

(h)The registrant's audit committee has considered whether the provision of non-audit services to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant, that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, is compatible with maintaining the principal accountant's independence.

 

Item 5. Audit Committee of Listed Companies. 

 

Not applicable.

 

Item 6. Schedule of Investments. 

 

Schedule of investments in securities of unaffiliated issuers is included under Item 1.

 

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Funds.

 

See attached Appendix A for the Adviser’s proxy voting policies and Appendix B Sub-Adviser’s proxy voting policies and procedures.

 

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

 

(a)(1) Portfolio Managers

 

Advisor Portfolio Managers

 

The following are the Advisor’s portfolio managers as of the date of the filing of this report

 

Jordan B. Ruddy -- Mr. Ruddy currently serves as Co-CIO of the Advisor and Portfolio Manager of the Fund. Mr. Ruddy has served as a member of the Investment Committee and as President of the Advisor since the inception of the Advisor in 2012. Mr. Ruddy has also served in several senior officer capacities with Bluerock Asset Management, LLC since its inception in 2018 and is currently its President. Mr. Ruddy has served in several senior officer capacities with Bluerock Residential Growth REIT, a NYSE American publicly traded REIT since its founding in 2009 and is currently its President. Mr. Ruddy brings approximately 30 years of institutional real estate investment experience working with some of leading public and private firms in the industry. Prior to Bluerock, Mr. Ruddy served as a real estate investment banker at Banc of America Securities LLC, and at Smith Barney Inc. and at JP Morgan Chase (previously the Chase Manhattan Bank), and as Vice President of Amerimar Enterprises, a real estate company specializing in value-added investments nationwide. Mr. Ruddy received an M.B.A. degree in Finance and Real Estate in 1995 from The Wharton School of the University of Pennsylvania, and a B.S. degree with high honors in Economics in 1986 from the London School of Economics.

 

Adam Lotterman — Mr. Lotterman is co-founder of the Advisor and has been a key member of the Fund’s investment team since its inception in 2012. Mr. Lotterman currently serves as the Fund’s Senior Portfolio Manager, as well as the Advisor’s Co-Chief Investment Officer and Lead Economist. Prior to joining Bluerock, Mr. Lotterman was Vice President of Forman Capital, a private commercial real estate lender from 2011 to 2012. Mr. Lotterman was also an Adjunct Professor at Nova Southeastern University from 2010 to 2012, where he taught a master’s level course in Real Estate Market Analysis. Prior to that, Mr. Lotterman worked as a Senior Valuation Analyst at Bayview Asset Management (former hedge fund affiliate of The Blackstone Group) from 2010 to 2011, and from 2005 to 2010 Mr. Lotterman was the Senior Analyst for Goodkin Consulting, the former real estate consulting arm of PricewaterhouseCoopers. Mr. Lotterman received an M.S. in International Real Estate in 2006 from Florida International University, where he graduated first in class, and a B.S. Degree in microbiology with a minor in chemistry in 1997 from the University of Florida. 

 

 

(a)(2)

 

Advisor Portfolio Managers

 

As of September 30, 2022, the Portfolio Managers listed above are also responsible for the day-to-day management of the following types of accounts in addition to the Fund:

 

Jordan Ruddy

Other Accounts By Type Total Number of Accounts by Account Type Total Assets By Account Type Number of Accounts by Type  Subject to a Performance Fee Total Assets By Account Type Subject to a Performance Fee
Registered Investment Companies 0 $0 0 $0
Other Pooled Investment Vehicles 0 $0 0 $0
Other Accounts 0 $0 0 $0

 

Adam Lotterman

Other Accounts By Type Total Number of Accounts by Account Type Total Assets By Account Type Number of Accounts by Type  Subject to a Performance Fee Total Assets By Account Type Subject to a Performance Fee
Registered Investment Companies 0 $0 0 $0
Other Pooled Investment Vehicles 0 $0 0 $0
Other Accounts 0 $0 0 $0

 

Because the Portfolio Managers may manage assets for other pooled investment vehicles and/or other accounts (including institutional clients, pension plans and certain high net worth individuals) (collectively "Client Accounts"), or may be affiliated with such Client Accounts, there may be an incentive to favor one Client Account over another, resulting in conflicts of interest. For example, the Advisor may, directly or indirectly, receive fees from Client Accounts that are higher than the fee it receives from the Fund, or it may, directly or indirectly, receive a performance-based fee on a Client Account. In those instances, a portfolio manager may have an incentive to not favor the Fund over the Client Accounts. The Advisor has adopted trade allocation and other policies and procedures that it believes are reasonably designed to address these and other conflicts of interest.

 

As of September 30, 2022, the Portfolio Managers’ ownership of the Fund was as follows:

Portfolio Managers Dollar Range of Shares Owned
Jordan Ruddy $500,001-$1,000,000
Adam Lotterman $500,001-$1,000,000

 

Mr. Ruddy does not receive compensation from the Advisor, but is compensated for his duties by an affiliate of the Advisor. Mr. Lotterman receives a salary and discretionary bonus from an affiliate of the Advisor and a share of the profits, if any, through his ownership share in the Advisor.

 

Item 9. Purchases of Equity Securities by Closed-End Funds. 

 

None.

 

Item 10. Submission of Matters to a Vote of Security Holders. 

 

None.

 

Item 11. Controls and Procedures.

 

 

 

(a)Based on an evaluation of the Registrant’s disclosure controls and procedures as of a date within 90 days of filing date of this Form N-CSR, the principal executive officer and principal financial officer of the Registrant have concluded that the disclosure controls and procedures of the Registrant are reasonably designed to ensure that the information required in filings on Form N-CSR is recorded, processed, summarized, and reported by the filing date, including that information required to be disclosed is accumulated and communicated to the Registrant’s management, including the Registrant’s principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

 

(b)There were no significant changes in the registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.

 

None.

 

Item 13. Exhibits.

 

(a)(1)Registrant’s Code of Ethics for Senior Financial Officers, which is the subject of the disclosure required by Item 2 of Form N-CSR, is attached hereto as Exhibit 13(a)(1) Ex99.Code of Ethics.

 

(a)(2)The certifications required by Rule 30a-2(a) of the Investment Company Act of 1940, as amended, are attached hereto as Ex99.Cert.

 

(a)(3)None.

 

(a)(4)None.

 

(b)The certifications for the Registrant’s Principal Executive Officer and Principal Financial Officer, as required by Rule 30a-2(b) of the Investment Company Act of 1940, as amended, and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto as Ex99.906Cert.

 

 

 

APPENDIX A

 

BLUEROCK FUND ADVISOR, LLC

PROXY VOTING POLICIES AND PROCEDURES 

 

Proxy Voting Policy

 

Background: Pursuant to Rule 206(4)-6 and Rule 204-2 under the Advisers Act, it is a fraudulent, deceptive, or manipulative act, practice or course of business, within the meaning of Section 206(4) of the Advisers Act, for an investment adviser to exercise voting authority with respect to client securities, unless (i) the adviser has adopted and implemented written policies and procedures that are reasonably designed to ensure that the adviser votes proxies in the best interests of its clients, (ii) the adviser describes its proxy voting procedures to its clients and provides copies on request, and (iii) the adviser discloses to clients how they may obtain information on how the adviser voted their proxies.

 

Policy: The Advisor will vote proxies on behalf of its individual clients. In order to fulfill its responsibilities under the Advisors Act, the Advisor has adopted the following policies and procedures for proxy voting with regard to companies in the investment portfolio of the Fund(s).

 

Voting Proxies

 

1.All proxies sent to clients that are actually received by the Advisor (to vote on behalf of the client) will be provided to the Operations Unit.

 

2.The Operations Unit will generally adhere to the following procedures (subject to limited exception):

 

(a)A written record of each proxy received by the Advisor (on behalf of its clients) will be kept in the Advisor’s files;

 

(b)The Operations Unit will determine which of the Advisor holds the security to which the proxy relates;

 

(c)Prior to voting any proxies, the Operations Unit will determine if there are any conflicts of interest related to the proxy in question in accordance with the general guidelines set forth below. If a conflict is identified, the Operations Unit will then make a determination (which may be in consultation with outside legal counsel) as to whether the conflict is material.

 

(d)If no material conflict is identified pursuant to these procedures, the Operations Unit will vote the proxy in accordance with the guidelines set forth below. The Operations Unit will deliver the proxy in accordance with instructions related to such proxy in a timely and appropriate manner 

 

Conflicts of Interest

 

1.As stated above, in evaluating how to vote a proxy, the Operations Unit will first determine whether there is a conflict of interest related to the proxy in question between Advisor and its Advisory Clients. This examination will include (but will not be limited to) an evaluation of whether the Advisor (or any affiliate of the Advisor) has any relationship with the company (or an affiliate of the company) to which the proxy relates outside of an investment in such company by a client of the Advisor.

 

2If a conflict is identified and deemed “material” by the Operations Unit, the Advisor will determine whether voting in accordance with the proxy voting guidelines outlined below is in the best interests of the client (which may include utilizing an independent third party to vote such proxies).

 

3With respect to material conflicts, the Advisor will determine whether it is appropriate to disclose the conflict to affected clients give such clients the opportunity to vote the proxies in question themselves. However, with respect to ERISA clients whose advisory contract reserves the right to vote proxies when the Advisor has determined that a material conflict exists that affects its best judgment as a fiduciary to the ERISA client, the Advisor will:
 

 

(a)Give the ERISA client the opportunity to vote the proxies in question themselves; or

 

(b)Follow designated special proxy voting procedures related to voting proxies pursuant to the terms of the investment management agreement with such ERISA clients (if any).

 

Proxy Voting Guidelines

 

1.The Advisor, when acting on behalf of the Fund, must comply with the following voting restrictions unless it is determined that the Fund is not relying on Section 12(d)(1)(F) and or Rule 12d1-3:

 

a.when the Fund exercises voting rights, by proxy or otherwise, with respect to any investment company owned by the Fund, the Fund will either

 

i.seek instruction from the Fund’s shareholders with regard to the voting of all proxies and vote in accordance with such instructions, or

 

ii.vote the shares held by the Fund in the same proportion as the vote of all other holders of such security.

  

Disclosure of Procedures

 

A summary of above these proxy voting procedures will be included in Part 2 of the Advisor’s Form ADV (if applicable) and a Fund client’s statement of additional information, as applicable, and will be updated whenever these policies and procedures are updated. Clients will be provided with contact information as to how they can obtain information about:

 

(a)   the Advisor’s proxy voting procedures (i.e., a copy of these procedures); and (b) how the Advisor voted proxies that are relevant to the affected client. Form N-PX will be filed with the SEC annually for each Fund client.

 

Record-keeping Requirements

 

The Operations Unit will be responsible for maintaining files relating to the Advisor’s proxy voting procedures. Records will be maintained and preserved for five years from the end of the fiscal year during which the last entry was made on a record, with records for the first two years kept in the offices of the Advisor. Records of the following will be included in the files:

 

1.Copies of these proxy voting policies and procedures, and any amendments thereto;

 

2.A copy of each proxy statement that the Advisor actually received; provided, however, that the Advisor may rely on obtaining a copy of proxy statements from the SEC’s EDGAR system for those proxy statements that are so available;

 

3.A record of each vote that the Advisor casts;

 

4.A copy of any document that the Advisor created that was material to making a decision how to vote the proxies, or memorializes that decision (if any); and

 

5.A copy of each written request for information on how the Advisor voted such client’s proxies and a copy of any written response to any request for information on how the Advisor voted proxies on behalf of clients.
 

 

APPENDIX B

 

RREEF

PROXY VOTING POLICIES AND PROCEDURES

 

1. SCOPE

 

DWS has adopted and implemented the following Policies and Guidelines, which it believes are reasonably designed to ensure that proxies are voted in the best economic interest of clients and in accordance with its fiduciary duties and local regulation. This Proxy Voting Policy and Guidelines – DWS (“Policy and Guidelines”) shall apply to all accounts managed by US domiciled advisers and to all US client accounts managed by non- US regional offices. Non-US regional offices are required to maintain procedures and to vote proxies as may be required by law on behalf of their non-US clients. In addition, DWS’s proxy policies reflect the fiduciary standards and responsibilities for ERISA accounts.

 

The attached guidelines represent a set of global recommendations that were determined by the Global Proxy Voting Sub-Committee (“the GPVSC”). These guidelines were developed to provide DWS with a comprehensive list of recommendations that represent how DWS will generally vote proxies for its clients. The recommendations derived from the application of these guidelines are not intended to influence the various DWS legal entities either directly or indirectly by parent or affiliated companies. In addition, the organizational structures and documents of the various DWS legal entities allows, where necessary or appropriate, the execution by individual DWS subsidiaries of the proxy voting rights independently of any parent or affiliated company. This applies in particular to non US fund management companies. The individuals that make proxy voting decisions are also free to act independently, subject to the normal and customary supervision by the Management/Boards of these DWS legal entities.

 

Capitalised terms have the meaning ascribed to them in the Glossary.

 

2. DWS’S PROXY VOTING RESPONSIBILITIES

 

Proxy votes are the property of DWS’s advisory clients.1 As such, DWS’s authority and responsibility to vote such proxies depend upon its contractual relationships with its clients or other delegated authority. DWS has delegated responsibility for effecting its advisory clients’ proxy votes to Institutional Shareholder Services (“ISS”), an independent third-party proxy voting specialist. ISS votes DWS’s advisory clients’ proxies in accordance with DWS’s proxy guidelines or DWS’s specific instructions. Where a client has given specific instructions as to how a proxy should be voted, DWS will notify ISS to carry out those instructions. Where no specific instruction exists, DWS will follow the procedures in voting the proxies set forth in this document. Certain Taft-Hartley clients may direct DWS to have ISS vote their proxies in accordance with Taft-Hartley Voting Guidelines.

 

Clients may in certain instances contract with their custodial agent and notify DWS that they wish to engage in securities lending transactions. In such cases, it is the responsibility of the custodian to deduct the number of shares that are on loan so that they do not get voted twice. To the extent a security is out on loan and DWS determines that a proxy vote (or other shareholder action) is materially important to the client’s account, DWS may request, on a best efforts basis, that the agent recall the security prior to the record date to allow DWS to vote the securities.

 

3. POLICIES

 

3.1 Proxy Voting Activities are Conducted in the Best Economic Interest of Clients

 

DWS has adopted the following Policies and Guidelines to ensure that proxies are voted in accordance with the best economic interest of its clients, as determined by DWS in good faith after appropriate review. DWS believes that responsibility including environmental, social and governance factors, and profitability, complement each other in many respects and has adopted Policies and Guidelines consistent with this belief.

 

 

1For purposes of this document, “clients” refers to persons or entities: (i) for which DWS serves as investment adviser or sub- adviser; (ii) for which DWS votes proxies; and (iii) that have an economic or beneficial ownership interest in the portfolio securities of issuers soliciting such proxies.

 

 

3.2 The Global Proxy Voting Sub-Committee

 

The Global Proxy Voting Sub-Committee is an internal working group established by the applicable DWS’s Investment Risk Oversight Committee pursuant to a written charter. The GPVSC is responsible for overseeing DWS’s proxy voting activities, including:

 

·Adopting, monitoring and updating guidelines, attached as Attachment A (the “Guidelines”), that provide how DWS will generally vote proxies pertaining to a comprehensive list of common proxy voting matters;

 

·Voting proxies where: (i) the issues are not covered by specific client instruction or the Guidelines; or (ii) where an exception to the Guidelines may be in the best economic interest of DWS’s clients;

 

·Review recommendations for proxies where the Guidelines specify that the issues are to be determined on a case-by-case basis and ensure such proxies are voted in accordance with these Policies and Guidelines; and

 

·Monitoring Proxy Vendor Oversight’s proxy voting activities (see below).

 

DWS’s Proxy Vendor Oversight, a function of DWS’s Operations Group, is responsible for coordinating with ISS to administer DWS’s proxy voting process and for voting proxies in accordance with any specific client instructions or, if there are none, the Guidelines, and overseeing ISS’ proxy responsibilities in this regard.

 

3.3 Availability of Proxy Voting Policies and Proxy Voting Record

 

Copies of this Policy, as it may be updated from time to time, is made available to clients as required by law and otherwise at DWS’s discretion. Clients may also obtain information on how their proxies were voted by DWS as required by law and otherwise at DWS’s discretion. Note, however, that DWS must not selectively disclose its investment company clients’ proxy voting records. Proxy Vendor Oversight will make proxy voting reports available to advisory clients upon request. The investment companies’ proxy voting records will be disclosed to shareholders by means of publicly-available annual filings of each company’s proxy voting record for the 12-month periods ending June 30, if so required by relevant law.

 

4. PROCEDURES

 

The key aspects of DWS’s proxy voting process are delineated below.

 

4.1 The GPVSC’s Proxy Voting Guidelines

 

The Guidelines set forth the GPVSC’s standard voting positions on a comprehensive list of common proxy voting matters. The GPVSC has developed and continues to update the Guidelines based on consideration of current corporate governance principles, industry standards, client feedback, and the impact of the matter on issuers and the value of the investments.

 

The GPVSC will review the Guidelines as necessary to support the best economic interests of DWS’s clients and, in any event, at least annually. The GPVSC will make changes to the Guidelines, whether as a result of the annual review or otherwise, taking solely into account the best economic interests of clients. Before changing the Guidelines, the GPVSC will thoroughly review and evaluate the proposed change and the reasons therefore, and the GPVSC Chair will ask GPVSC members whether anyone outside of the DWS organization (but within Deutsche Bank and its affiliates) or any entity that identifies itself as an DWS advisory client has requested or attempted to influence the proposed change and whether any member has a conflict of interest with respect to the proposed change. If any such matter is reported to the GPVSC Chair, the Chair will promptly notify the Conflicts of Interest Management Sub-Committee and will defer the approval, if possible.

 

Lastly, the GPVSC will fully document its rationale for approving any change to the Guidelines.

 

The Guidelines may reflect a voting position that differs from the actual practices of the public company(ies) within the Deutsche Bank organization or of the investment companies for which DWS or an affiliate serves as investment adviser or sponsor. Investment companies, particularly closed-end investment companies, are different from traditional operating companies. These differences may call for differences in the actual practices of the investment company and the voting positions of the investment company on the same or similar matters. Further, the manner in which DWS votes proxies on behalf investment company proxies may differ from the voting recommendations made by a DWS-advised or sponsored investment company soliciting proxies from its shareholders. Proxies solicited by closed-end (and open-end) investment companies are voted in accordance with the Guidelines.

 

 

 

4.2 Specific Proxy Voting Decisions Made by the GPVSC

 

Proxy Vendor Oversight will refer to the GPVSC all proxy proposals: (i) that are not covered by specific client instructions or the Guidelines; or (ii) that, in accordance with the Guidelines, should be evaluated and voted on a case-by-case basis.

 

Additionally, if Proxy Vendor Oversight,2 the GPVSC Chair or any member of the GPVSC, a Portfolio Manager, a Research Analyst or a sub-adviser believes that voting a particular proxy in accordance with the Guidelines may not be in the best economic interests of clients, that individual may bring the matter to the attention of the GPVSC Chair and/or Proxy Vendor Oversight.

 

If Proxy Vendor Oversight refers a proxy proposal to the GPVSC or the GPV