DALLAS, Aug. 28, 2020 /PRNewswire/ -- NexPoint Strategic
Opportunities Fund (NYSE:NHF) ("NHF" or the "Fund"), a closed-end
fund managed by NexPoint Advisors, L.P. (the "Adviser" and together
with its affiliates "NexPoint"), announced the results of the
special meeting of shareholders (the "Special Meeting"), which took
place earlier today.
At the Special Meeting, shareholders approved the proposal to
covert the Fund from a registered investment company to a
diversified real estate investment trust ("REIT") and to amend
certain fundamental investment restrictions (the "Business Change
Proposal").
The Adviser announced the Business Change Proposal on
June 19, 2020 in conjunction with a
preliminary proxy filing. It filed a definitive proxy statement on
July 10, 2020.
The Fund's Board of Trustees (the "Board"), which includes
members who are not interested persons of the Fund (the
"Independent Trustees"), believes the Business Change Proposal
provides the best path to increase shareholder value over
time.
Shareholders likewise supported this path in voting to approve
the Business Change Proposal.
"We are pleased that shareholders recognized the opportunities
in both the REIT structure and the real estate investment
landscape," said James Dondero,
president of NexPoint Advisors and the Fund's portfolio manager.
"We are grateful for the support of the proposal and look forward
to delivering value through this transition."
At the Special Meeting, shareholders also approved the amendment
and restatement of the Fund's Agreement and Declaration of Trust
(the "Amendment Proposal" and, together with the Business Change
Proposal, the "Proposals"). The approval of the Business Change
Proposal was a precondition for the Amendment Proposal.
Per the Proposals, the Fund will begin to transition its
business and investments to those of a diversified REIT. Additional
information on the transition can be found in the definitive proxy
statement.
With the conversion, NHF will be the fourth publicly traded REIT
on the NexPoint platform. NexPoint is the external manager for:
NexPoint Residential Trust, Inc. (NYSE: NXRT), a value-add
multifamily REIT; NexPoint Real Estate Finance, Inc. (NYSE: NREF),
a mortgage REIT; and NexPoint Hospitality Trust (TSX-V: NHT.U), a
hospitality REIT focused on select service and extended stay
properties.
About the NexPoint Strategic Opportunities Fund (NHF)
The NexPoint Strategic Opportunities Fund (NYSE:NHF) is a
closed-end fund managed by NexPoint Advisors, L.P. The fund invests
primarily in below investment grade debt, equity securities, and
real estate, and has the ability to hedge risk.
For more information
visit www.nexpointgroup.com/nexpoint-strategic-opportunities-fund/
About NexPoint Advisors, L.P.
NexPoint Advisors, L.P. is an SEC-registered adviser on the
NexPoint alternative investment platform. It serves as the adviser
to a suite of funds and investment vehicles, including a closed-end
fund, an interval fund, a business development company, and various
real estate vehicles. NexPoint Advisors is the external manager for
three publicly traded REITs: NexPoint Residential Trust, Inc.
(NYSE: NXRT), NexPoint Real Estate Finance, Inc. (NYSE: NREF), and
NexPoint Hospitality Trust (TSX-V: NHT.U).
For more information visit www.nexpointgroup.com
While NexPoint is committed to the REIT conversion, it is
still contingent upon regulatory approval and the ability to
reconfigure NHF's portfolio to attain REIT status and deregister as
an investment company. The time required to reconfigure the Fund's
portfolio could be impacted by, among other things, the COVID-19
pandemic and related market volatility, determinations to preserve
capital, the Fund's ability to identify and execute on desirable
investments, and applicable regulatory, lender and governance
requirements. The conversion process could take up to 24
months; and there can be no assurance that conversion of NHF to
REIT status will improve its performance or reduce the discount to
NAV. Further, the SEC may determine not to grant the Fund's request
for a deregistration order, which would materially change the
Fund's plans for its business and investments.
In addition, these actions may adversely affect the Fund's
financial condition, yield on investment, results of operations,
cash flow, per share trading price of our common shares and ability
to satisfy debt service obligations, if any, and to make cash
distributions to shareholders. Whether the Fund remains a
registered investment company or converts to a REIT, its common
shares, like an investment in any other public company, are subject
to investment risk, including the possible loss of investment. For
a discussion of certain other risks relating to the proposed
conversion to a REIT, see "Implementation of the Business Change
Proposal and Related Risks" in the proxy statement.
Shares of closed-end investment companies frequently trade at
a discount to net asset value. The price of the Fund's shares is
determined by a number of factors, several of which are beyond the
control of the Fund. Therefore, the Fund cannot predict whether its
shares will trade at, below or above net asset value. Past
performance does not guarantee future results.
No assurance can be given that the Fund will achieve its
investment objectives.
Closed-End Fund Risk. The Fund is a closed-end
investment company designed primarily for long-term investors and
not as a trading vehicle. No assurance can be given that a
shareholder will be able to sell his or her shares on the NYSE when
he or she chooses to do so, and no assurance can be given as to the
price at which any such sale may be effected.
Credit Risk. Investments rated below investment grade
are commonly referred to as high-yield, high risk or "junk debt."
They are regarded as predominantly speculative with respect to the
issuing company's continuing ability to meet principal and/or
interest payments. Non-payment of scheduled interest and/or
principal would result in a reduction of income to the Fund, a
reduction in the value of the asset experiencing non-payment and a
potential decrease in NAV of the Fund.
Interest Rate Risk. Interest rate risk is the risk that
debt securities, and the Fund's net assets, may decline in value
because of changes in interest rates. Generally, fixed rate debt
securities will decrease in value when interest rates rise and
increase in value when interest rates decline.
Leverage Risk. The Fund uses leverage through borrowings
from notes and a credit facility, and may also use leverage through
the issuances of preferred shares. The use of leverage magnifies
both the favorable and unfavorable effects of price movements in
the investments made by the Fund. Insofar as the Fund employs
leverage in its investment operations, the Fund will be subject to
substantial risks of loss.
Industry Concentration Risk. The Fund must invest at
least 25% of the value of its total assets at the time of purchase
in securities of issuers conducting their principal business
activities in the real estate industry. The Fund may be subject to
greater market fluctuations than a fund that does not concentrate
its investments in a particular industry. Financial, economic,
business, and other developments affecting issuers in the real
estate industry will have a greater effect on the Fund, and if
securities of the real estate industry fall out of favor, the Fund
could underperform, or its NAV may be more volatile than, funds
that have greater industry diversification.
Real Estate Risk. Real estate investments are subject to
various risk factors. Generally, real estate investments could be
adversely affected by a recession or general economic downturn
where the properties are located. The full extent of the impact and
effects of the recent outbreak of COVID-19 on the future financial
performance of the Fund, and specifically, on its investments and
tenants to properties held by its REIT subsidiaries, are uncertain
at this time. The outbreak could have a continued adverse impact on
economic and market conditions and trigger a period of global
economic slowdown.
Illiquidity of Investments Risk. The investments made by
the Fund may be illiquid, and consequently the Fund may not be able
to sell such investments at prices that reflect the Investment
Adviser's assessment of their value or the amount originally paid
for such investments by the Fund.
Media Contact
Lucy Bannon
lbannon@nexpointgroup.com
1-972-419-6272
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SOURCE NexPoint Advisors, L.P.