Filed Pursuant to Rule 497
Registration Nos. 333-176316 and 811-22599

PROSPECTUS		April 9, 2014

American Real Estate Income Fund

Shares of Beneficial Interest
$2,500 minimum purchase for regular accounts
$1,000 minimum purchase for retirement plan accounts

 

American Real Estate Income Fund (the “Fund”) is a newly organized, continuously offered, non-diversified, closed-end management investment company that is operated as an interval fund.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

This prospectus provides information that a prospective investor should know about the Fund before investing. You are advised to read this prospectus carefully and to retain it for future reference. Additional information about the Fund, including a Statement of Additional Information (the “SAI”) dated April 9, 2014, has been filed with the U.S. Securities and Exchange Commission (the “SEC”). The SAI is available upon request and without charge by writing the Fund at c/o RCS Advisory Services, LLC, 405 Park Avenue, New York, NY 10022, or by calling toll-free 1-866-271-9244. The table of contents of the SAI appears on page 52 of this prospectus. You may request the Fund’s SAI, annual and semi-annual reports when available, and other information about the Fund or make shareholder inquiries by calling 1-866-271-9244 or by visiting http://www.arcincomefunds.com. The SAI, material incorporated by reference and other information about the Fund, is also available on the SEC’s website at http://www.sec.gov. The address of the SEC’s website is provided solely for the information of prospective shareholders and is not intended to be an active link.

Investment Objective.   The Fund’s investment objective is to generate income with capital appreciation as a secondary objective. The Fund will pursue this objective through an investment strategy that concentrates on investments in the real estate industry.

Securities Offered.   The Fund engages in a continuous offering of shares. The Fund is authorized as a Delaware statutory trust to issue an unlimited number of shares. The Fund has registered and is offering to sell, under the terms of this prospectus, 100,000,000 shares of beneficial interest, at the Fund’s daily net asset value per share (“NAV”) plus any applicable sales load. The initial offering price is $10.00 per share. The minimum initial investment by a shareholder is $2,500 for regular accounts and $1,000 for retirement plan accounts. Subsequent investments may be made with at least $100. The Fund is offering to sell its shares through Realty Capital Securities, LLC, its distributor. The distributor is not required to sell any specific number or dollar amount of the Fund’s shares, but will use its best efforts to sell the shares. Arrangements have been made to place the proceeds from this offering into escrow until shares producing gross offering proceeds of $15 million, the minimum offering threshold, have been sold by the Fund. See “Plan of Distribution.” During the continuous offering, shares will be sold at the NAV of the Fund next determined plus the applicable sales load. See “Plan of Distribution.” The Fund’s continuous offering is expected to continue in reliance on Rule 415 under the Securities Act of 1933, as amended, until the Fund has sold shares in an amount equal to approximately $1 billion. The Fund will make quarterly repurchase offers subject to certain conditions. See “Quarterly Repurchases of Shares.”

Price to Public						Sales Load (1)				Proceeds to Registrant (2)
Per Share		$	10.00			$	0.60			$	9.40
Total Minimum		$	1,000.00			$	60.00			$	940.00
Total Maximum		$	1,000,000,000.00			$	60,000,000.00			$	940,000,000.00

The Fund is newly organized, and its shares have no history of public trading. In addition, we do not currently intend to list our shares on any securities exchange. There is no secondary market for the Fund’s shares, and we do not expect that such a market will develop at this time. Your investment in the Fund will be illiquid. Before investing, you should therefore consider the following factors:

We have implemented a share repurchase program, but the Fund is only required to repurchase 5% of its outstanding shares per quarter. In addition, we may in the future determine to list the Fund’s shares on a public securities exchange, but even if an active secondary market in the Fund’s shares were to develop as a result, closed-end fund shares frequently trade at a discount from their NAV Investing in the Fund involves a considerable degree of risk. See “Risk Factors” below.

 

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		Page
PROSPECTUS SUMMARY			1
SUMMARY OF FUND EXPENSES			14
FINANCIAL HIGHLIGHTS			15
THE FUND			15
USE OF PROCEEDS			15
INVESTMENT OBJECTIVE, POLICIES AND STRATEGIES			15
RISK FACTORS			20
MANAGEMENT OF THE FUND			34
DETERMINATION OF NET ASSET VALUE			37
QUARTERLY REPURCHASE OF SHARES			40
DISTRIBUTION POLICY			42
DIVIDEND REINVESTMENT POLICY			43
U.S. FEDERAL INCOME TAX MATTERS			44
DESCRIPTION OF CAPITAL STRUCTURE AND SHARES			45
ANTI-TAKEOVER PROVISIONS IN THE DECLARATION OF TRUST			45
PLAN OF DISTRIBUTION			46
LEGAL MATTERS			51
REPORTS TO SHAREHOLDERS			51
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			51
ADDITIONAL INFORMATION			51
TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION			52
NOTICE OF PRIVACY POLICY & PRACTICES			53

You should rely only on the information contained in this prospectus and the accompanying prospectus supplement, if any. We have not authorized anyone to provide you with additional information, or information different from that contained in this prospectus and the accompanying prospectus supplement, if any. If anyone provides you with different or additional information, you should not rely on it. In the event of a conflict between this prospectus and the accompanying prospectus supplement, if any, the prospectus supplement shall govern. We are offering to sell, and seeking offers to buy, securities only in jurisdictions where offers and sales are permitted. The information contained in or incorporated by reference in this prospectus and the accompanying prospectus supplement, if any, is accurate only as of the date of this prospectus or such prospectus supplement. Our business, financial condition, results of operations and prospects may have changed since then. We will update these documents to reflect material changes as required by law.

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PROSPECTUS SUMMARY

This summary does not contain all of the information that you should consider before investing in the shares. You should review the more detailed information contained or incorporated by reference in this Prospectus and in the Statement of Additional Information, particularly the information set forth under the heading “Risk Factors.”

The Fund.   American Real Estate Income Fund is a newly organized, continuously offered, non-diversified, closed-end management investment company. The Fund is an interval fund that will offer to make quarterly repurchases of the Fund’s shares at net asset value per share (“NAV”). See “Quarterly Repurchases of Shares.” The Fund’s investments will be managed by SEL Asset Management, LLC (the “Advisor”) and sub-advised by National Fund Advisors, LLC (the “Sub-Advisor”). See “Management of the Fund — Investment Advisor” and “Management of the Fund — Sub-Advisor”.

Investment Objective and Policies.   The Fund’s investment objective is to generate income with capital appreciation as a secondary objective. The Fund will pursue this objective through an investment strategy that concentrates on investments in the real estate industry. See “Investment Objective, Policies and Strategies.”

Under normal circumstances, the Fund will invest at least 80% of its assets in real estate-related investments, including securities issued by real estate funds that qualify as real estate investment trusts for U.S. Federal tax purposes (“REITs”). Under normal circumstances, it is anticipated that approximately 40% to 60% of the Fund’s assets will be invested in securities of REITs that are not listed on a national securities exchange (“Non-Traded REITs”). Non-Traded REITs are illiquid investments. The remainder of the Fund’s assets will be invested in other real estate-related investments (including REITs that are listed on a national securities exchange (“Listed REITs”), convertible mortgage bonds and commercial mortgage-backed securities (“CMBSs”)) as well as other non-real estate-related investments, cash and cash equivalents.

The Fund invests without restriction as to an issuer’s market capitalization. In addition, the Fund may invest in fixed income securities of any quality, duration or maturity. Although the Fund expects that the effective duration of its portfolio of the fixed income securities will typically be less than 10 years, the Fund does not maintain a limit on the duration or dollar weighted average maturity of its fixed income portfolio. In addition, the Fund may invest in non-investment grade debt instruments (known as “high yield” or “junk” bonds), but the Fund will not invest in debt that are rated below BB by Standard & Poor’s or Fitch or below Ba2 by Moody’s or, if unrated, are determined by the Advisor or the Sub-Advisor, as the case may be, to be of less than equivalent credit quality.

The Fund may invest in securities that are primarily traded in overseas securities markets, but the Fund will not invest in emerging market securities. In addition, the Fund may invest in REITs that invest in overseas real estate markets, but the Fund will not invest in REITs that emphasize investments in emerging markets.

The Fund may sell securities short or take short positions in equity futures contracts to hedge the value of the Fund’s portfolio when the Advisor or the Sub-Advisor, as the case may be, believe that prices are likely to decline. The Fund may also write covered call options on its long security positions to generate additional returns. However, the Fund may not engage in naked short sales or other similar speculative securities transactions.

The Fund may employ leverage, including borrowing from banks, in an amount up to 33% of the Fund’s assets (defined as net assets plus borrowing for investment purposes). The Fund is authorized to borrow money in connection with its investment activities, to satisfy repurchase requests from Fund shareholders, and to otherwise provide the Fund with temporary liquidity.

In certain extreme circumstances or market environments, the Fund may reduce its holdings in real estate-related investments and hold a larger position in cash or cash equivalents and/or deviate from the allocations ranges described in this prospectus. As is always the case, the Fund may not be able to achieve its investment objective in such circumstances.

The Fund’s policy of investing, under normal circumstances, at least 80% of its assets in real estate-related investments is non-fundamental and may be changed without shareholder approval. However,

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shareholders of the Fund will be provided with not less than 60 days’ prior written notice of any change to this policy. The Statement of Additional Information contains a list of other fundamental and non-fundamental investment policies of the Fund under the heading “Investment Objective and Policies.”

Investment Strategy.   The Advisor will be responsible for the determining the overall allocation of the Fund’s portfolio. The Advisor will retain sole responsibility for managing that portion of the Fund’s portfolio that is invested in Non-Traded REITs and other illiquid securities. The Adviser may invest the Fund’s assets in any Non-Traded REIT that is consistent with the Fund’s investment strategy. However, it is anticipated that at least some portion of the Fund’s assets will be invested in Non-Traded REITs (“ARC REITs”) that are sponsored, organized or managed by AR Capital, LLC and its affiliates (“ARC”). This reflects the fact that ARC is a leading sponsor of Non-Traded REITs in the United States, so it is anticipated that at least some of the best investment opportunities available to the Fund from time to time will be ARC REITs. As of the date of this prospectus, ARC also sponsors a non-traded business development company (“BDC”) in which the Fund may invest. See “Risk Factors — Conflicts of Interest.” Responsibility for managing the remaining portion of the Fund’s portfolio, including the Fund’s investments in Listed REITs and CMBSs, will be delegated to the Sub-Advisor. The Sub-Advisor will have no role in determining which Non-Traded REITs or BDCs the Fund will invest in.

In general, the Advisor and the Sub-Advisor will seek to diversify the Fund’s assets across various sectors of the commercial real estate market. The Advisor and the Sub-Advisor may strategically rebalance the Fund’s investments according to the current market conditions, but will remain true to the Fund’s primary strategy of investing in a portfolio of real estate assets that is diversified across the various sectors of the commercial real estate market.

In selecting securities for investment, the Advisor and the Sub-Advisor will assess the likely risks and returns of the different alternative investment opportunities and evaluate the potential correlation among the investments under consideration. The Advisor and the Sub-Advisor will generally seek to invest in securities whose expected risk-adjusted returns are determined to be attractive and are likely to have low correlations to each other and to the broader securities markets. The Advisor and the Sub-Advisor may utilize various fundamental, technical and other related methodologies to determine the intrinsic value of a potential investment.

In general, the Advisor and the Sub-Advisor will manage the Fund’s portfolio over a long-term investment horizon. The Fund will sell a security if, in the judgment of the applicable portfolio manager, the individual security’s total return potential has been met, the relevant issuer’s fundamentals deteriorate, or a more attractive investment opportunity is identified. See “Investment Strategy and Criteria Used in Selecting Investments.”

Investor Suitability.   An investment in the Fund involves a considerable degree of risk. It is possible that you will lose money. An investment in the Fund should be viewed as a long-term investment, and is suitable only for investors who can bear the risks associated with the limited liquidity of an investment in the Fund. Before making your investment decision, you should (i) consider the suitability of this investment with respect to your investment objectives and personal financial situation and (ii) consider factors such as your personal net worth, income, age, risk tolerance and liquidity needs.

Summary of Risk Factors.   Investing in the Fund is subject to various risks, including the risk that you may receive little or no return on your investment or that you may lose all or part of your investments. By itself, the Fund does not constitute a balanced investment program. Before investing in the Fund you should consider carefully the following risks. See “Risk Factors.”

Market Risk.   An investment in the Fund is generally subject to market risk, including the possible loss of the entire principal amount invested. An investment in the Fund represents an indirect investment in the securities owned by the Fund. Like all financial instruments, the value of these securities may move up or down, sometimes rapidly and unpredictably. The value of your investment in the Fund at any point in time

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may be worth less than the value of your original investment, even after taking into account any reinvestment of dividends and distributions. Although not exhaustive, the following is a description of the types of market risks that an investment in the Fund may be subject to:

There are also special risks associated with the particular commercial real estate sectors in which the Fund will invest. These include:

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The use of derivatives by the Fund could subject the Fund to regulation by the CFTC as a commodity pool requiring compliance with certain CFTC rules. However, the Fund intends to conduct its operations so as to avoid regulation as a commodities pool.

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Fund Structure Risk.   In addition to the market risks described above, investing through the Fund may subject to investors to other risks that are inherent in the structure of the Fund itself. These include the following:

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Repurchases of shares will tend to reduce the amount of outstanding shares and, depending upon the Fund’s investment performance, its net assets. A reduction in the Fund’s net assets may increase the Fund’s expense ratio, to the extent that additional shares are not sold. In addition, the repurchase of shares by the Fund may be a taxable event to shareholders.

Conflicts of Interest.    In addition to the market and fund structure risks described above, the Fund’s service providers are subject to various potential conflicts of interest that may create incentives to act in ways that are contrary to the best interests of the Fund and its shareholders, including the potential conflicts of interest described below. A number of procedures and controls have been put in place to prevent this from happening. However, there can be no assurance that these measures will be completely effective.

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Investment Advisor, Sub-Advisor and Fee.   The Advisor was formed in November, 2012 and commenced operations in February 2014. The Advisor was formed for the purpose of providing investment management services to registered investment vehicles. The Fund is the Advisor’s first initiative in the closed end fund marketplace. As such, the Advisor currently has no assets under management. The Advisor is entitled to receive a monthly fee at the annual rate of 1.10% of the Fund’s daily net assets. The Advisor’s portfolio manager for the Fund has over nine years of experience in the financial services industry, including more than five years analyzing and investing in real estate industry securities. However, he has no prior experience managing a registered closed-end investment company.

The Sub-Advisor was formed in December 2011 and commenced operations in May 2013. The Sub-Advisor was formed for the purpose of providing investment management services to registered investment vehicles. As of December 31, 2013, the Sub-Advisor had approximately $135 million in assets under management. The Sub-Advisor currently manages one registered open-end mutual fund, which focuses on investments in the real estate industry. As of December 31, 2013, that fund had approximately $28 million in assets under management. The Fund is the Sub-Advisor’s first initiative in the closed-end fund marketplace.

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The Sub-Advisor is entitled to receive a monthly fee at the annual rate of 1.00% of the Fund’s daily net assets attributable to that portion of the Fund’s portfolio that has been allocated to the Sub-Advisor by the Advisor. The Sub-Advisor’s fee will be paid by the Advisor out of the fee the Advisor receives from the Fund, and will not impact the Fund’s expenses. The Sub-Advisor’s portfolio manager who is responsible for managing the portion of the Fund’s assets allocated to the Sub-Advisor by the Advisor has over 22 years of experience in the financial services industry, including more than 17 years analyzing and investing in real estate industry securities. However, he has no prior experience managing a registered closed-end investment company.

The Advisor and the Fund have entered into an expense limitation and reimbursement agreement (the “Expense Limitation Agreement”), under which the Advisor has agreed contractually to waive its fees and to pay or absorb the direct, ordinary operating expenses of the Fund (including offering and organizational expenses, but excluding interest, brokerage commissions, acquired fund fees and expenses, and extraordinary expenses), to the extent that they exceed 2.50% per annum of the Fund’s average daily net assets (the “Expense Limitation”). 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 waived and Fund expenses paid or absorbed. Any waiver or reimbursement of fees by the Advisor is subject to repayment by the Fund within the three fiscal years following the fiscal year in which such waiver or reimbursement occurred; provided, however, that (i) the Fund is able to make such repayment without exceeding the Expense Limitation in place at the time the fees being repaid were waived, and (ii) such repayment is approved by the Board. The Expense Limitation Agreement will remain in effect for at least one year from the effective date, unless and until the Board approves its modification or termination. The Expense Limitation Agreement may be terminated only by the Fund’s Board on 60 days written notice to the Advisor. After the initial one-year term, the Expense Limitation Agreement may be renewed at the Advisor’s and Board’s discretion. See “Management of the Fund —  Estimated Fund Expenses.”

Repurchases of Shares.   The Fund is an interval fund and, as such, has adopted a fundamental policy to make quarterly repurchase offers, at NAV, of not less than 5% of the Fund’s outstanding shares on the repurchase request deadline. The Fund may increase the size of these offerings to up to 25% of the Fund’s outstanding shares, in the sole discretion of the Board, but it is not expected that the Board will do so. There is no guarantee that shareholders will be able to sell all of the shares they desire to sell in a quarterly repurchase offer, although each shareholder will have the right to require the Fund to purchase at least 5% (or up to 25%, as determined by the Board) of such shareholder’s shares in each quarterly repurchase. Liquidity will be provided to shareholders only through the Fund’s quarterly repurchases. See “Quarterly Repurchases of Shares.”

Distribution Policy.   The Fund intends to make a distribution each quarter to its shareholders of the net investment income of the Fund after payment of Fund operating expenses. The distribution rate may be modified by the Board from time to time. See “Distribution Policy”.

The Fund’s distribution policy may, under certain circumstances, have certain adverse consequences to the Fund and its shareholders because it may result in a return of capital resulting in less shareholders’ assets being invested in the Fund and, over time, increase the Fund’s expense ratio. A return of capital may also reduce a shareholder’s tax basis, resulting in higher taxes when the shareholder sells his or her shares, and may cause the shareholder to pay taxes even if he or she sells the shares for less than the original purchase price. The distribution policy may also cause the Fund to sell a security at a time it would not otherwise do so to manage the distribution of income and gain. The initial distribution will be declared on a date determined by the Board. If the Fund’s investments are delayed, the initial distribution may consist primarily of return of capital. See “US Federal Income Tax Matters”.

U.S. Federal Income Tax Summary.   The Fund intends to elect to be treated and to qualify each year for taxation as a regulated investment company under Subchapter M of the Code. In order for the Fund to qualify as a regulated investment company, it must meet an income and asset diversification test each year. If the Fund so qualifies and satisfies certain distribution requirements, the Fund (but not its shareholders) will not be subject to federal income tax to the extent it distributes its investment company taxable income and net capital gains (the excess of net long-term capital gains over net short-term capital loss) in a timely manner to its shareholders in the form of dividends or capital gain distributions. The Code imposes a 4% nondeductible excise tax on regulated investment companies, such as the Fund, to the extent that they do not meet certain distribution requirements by the end of each calendar year. The Fund anticipates meeting these distribution

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requirements. The Advisor believes that the income from such REIT entities would typically comply with the regulated investment company 90% investment income requirement under the Code, as described in this prospectus and the Statement of Additional Information. Because many of the Fund’s REIT investments will make distributions in excess of their taxable income, it is expected that a portion of such distributions will constitute a non-taxable return of capital. To the extent that the distributions from a particular REIT exceed the Fund’s tax basis in the REIT shares, the Fund generally will recognize capital gain. Shareholders of the Fund may also receive distributions that constitute a non-taxable return of capital. Shareholders of the Fund who receive such a distribution will reduce the tax basis in their Fund shares but not below zero. To the extent that such a distribution exceeds a shareholder’s tax basis in Fund shares, such shareholder generally will recognize a capital gain. An issuer, obligor or guarantor of debt instruments the Fund invests in may be unable to make payments of interest. In such case the Fund may be required to accrue interest income even though no payments are being received by the Fund. This could affect the Fund's ability to satisfy the distribution requirements of the Code and Shareholders will be allocated income attributable to any such debt instrument without the corresponding cash available for distribution. However, the impact of having to accrue income without cash may be offset by REIT investments that make distributions in excess of their taxable income. See “U.S. Federal Income Tax Matters.”

Dividend Reinvestment Policy.   Unless a shareholder elects otherwise, the shareholder’s distributions will be reinvested in additional shares under the Fund’s dividend reinvestment policy. Shareholders who elect not to participate in the Fund’s dividend reinvestment policy will receive all distributions in cash paid to the shareholder of record (or, if the shares are held in street or other nominee name, then to such nominee). See “Dividend Reinvestment Policy.”

Administrator, Accounting Agent and Transfer Agent.   RCS Advisory Services, LLC (the “Administrator”) serves as the administrator of the Fund. American National Stock Transfer, LLC will serve as the Transfer Agent for the Fund. Gemini Fund Services, LLC (“GFS”) serves as the Fund’s sub-administrator, fund accounting agent and sub-transfer agent. See “Management of the Fund.”

Custodian.   Union Bank, N.A. (“Union Bank”) will serve as the Fund’s custodian. See “Management of the Fund.”

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SUMMARY OF FUND EXPENSES

Shareholder Transaction Expenses
Maximum Sales Load (as a percent of offering price) (1)							6.00	%
Redemption Fee on Shares Repurchased Within 90 Days of Purchase (as a percent of proceeds)							2.00	%
Annual Expenses (as a percentage of net assets attributable to shares)
Management Fees							1.10	%
Interest Payments on Borrowed Funds (2)							0	%
Other Expenses							2.76	%
Shareholder Servicing Expenses			0.25	%
All Non-Shareholder Servicing Other Expenses (3)			2.51	%
Acquired Fund Fees and Expenses (3) , (4)							0.50	%
Total Annual Expenses (5)							4.36	%
Fee Waiver and Reimbursement							(1.36	%)
Total Annual Expenses (after fee waiver and reimbursement)							3.00	%

The Summary of Fund Expenses Table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. The table assumes that the Fund’s average net assets in the first year of its operations will be $50 millon. You may qualify for sales charge discounts on purchases of shares if you and your family invest, or agree to invest in the future, at least $25,000 in the Fund. More information about these and other discounts is available from your financial professional and in “Plan of Distribution — Purchasing Shares” starting on page 44 of this prospectus.

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The following example illustrates the hypothetical expenses that you would pay on a $1,000 investment assuming annual expenses attributable to shares remain unchanged and shares earn a 5% annual return:

Example		1 Year				3 Years				5 Years				10 Years
You would pay the following expenses on a $1,000 investment, assuming a 5% annual return		$	88			$	173			$	258			$	476

Shareholders who choose to participate in repurchase offers by the Fund will not incur a repurchase fee. However, if shareholders request repurchase proceeds be paid by wire transfer, such shareholders will be assessed an outgoing wire transfer fee at prevailing rates charged by GFS, currently $15. The Fund also will pay organizational and offering costs in connection with the initial offering of the shares estimated to be $237,378 and $350,186, which are subject to the Expense Limitation. These organizational expenses are recorded as incurred and offering expenses will be amortized over the first twelve months of the Fund’s operations. The purpose of the above table is to help a holder of shares understand the fees and expenses that such holder would bear directly or indirectly. The example should not be considered a representation of actual future expenses. Actual expenses may be higher or lower than those shown.

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remainder of the Fund’s assets will be invested in other real estate-related investments (including securities of REITs that are listed on a national securities exchange (“Listed REITs”), convertible mortgage bonds and commercial mortgage-backed securities (“CMBSs”)) as well as non-real estate-related investments, cash and cash equivalents.

The Fund invests without restriction as to an issuer’s market capitalization. In addition, the Fund may invest in debt securities of any quality, duration or maturity. Although the Fund expects that the effective duration of its portfolio of the fixed income securities will typically be less than 10 years, the Fund does not maintain a limit on the overall duration or dollar weighted average maturity of its fixed income portfolio. In addition, the Fund may invest in non-investment grade debt instruments (known as “high yield” or “junk” bonds), but the Fund will not invest in debt that is rated below BB by Standard & Poor’s or Fitch or below Ba2 by Moody’s or, if unrated, is determined by the Advisor or the Sub-Advisor, as the case may be, to be of less than equivalent credit quality.

Duration is a measure of the price volatility of a debt security as a result of changes in market interest rates, based on the average weighted timing of the security’s expected principal and interest payments. Duration is expressed as a number of years, but differs from maturity in that it considers a debt security’s yield, coupon payments, principal payments and call features in addition to the amount of time until the debt security matures. As the value of a debt security changes over time, so will its duration. Prices of securities with longer durations tend to be more sensitive to interest rate changes than securities with shorter durations. The longer the duration, the more susceptible the Fund’s portfolio of debt securities will be to changes in interest rates. For example, if interest rates increase by 1%, the value of the Fund’s portfolio of debt securities having a duration of 5 years would decrease by approximately 5%. Conversely, if the duration of the Fund’s portfolio of debt securities was 10 years, the same increase in interest rates would be expected to result in a 10% decrease of the value of the Fund’s portfolio of debt securities.

The Fund may invest in securities that are primarily traded in overseas securities markets, but the Fund will not invest in emerging market securities. In addition, the Fund may invest in REITs that invest in overseas real estate markets, but the Fund will not invest in REITs that emphasize investments in emerging markets.

The Fund may sell securities short or take short positions in equity futures contracts to hedge the value of the Fund’s portfolio when the Advisor or the Sub-Advisor, as the case may be, believes that equity prices and/or real estate-related security prices are likely to decline. Short sales involve the sale of a security which the Fund does not own in hopes of purchasing the same security at a later date at a lower price. To make delivery to the buyer, the short seller must borrow the security, and is obligated to return the security to the lender, which is accomplished by a later purchase of the security. The Fund may also write covered call options on long positions to generate additional returns. However, the Fund may not engage in naked short sales or other similar speculative securities transactions, and derivatives will not be used to speculate on a decline in the value of equities.

The Fund may employ leverage, including borrowing from banks in an amount of up to 33% of the Fund’s assets (defined as net assets plus borrowing for investment purposes). The Fund is authorized to borrow money in connection with its investment activities, subject to the limits of the asset coverage requirement of the 1940 Act. The Fund also may borrow money to satisfy repurchase requests from Fund shareholders and to otherwise provide the Fund with temporary liquidity. The 1940 Act requires a registered investment company to satisfy an asset coverage requirement of 300% of its indebtedness, including amounts borrowed, measured at the time indebtedness occurs. This means that the value of the Fund’s total indebtedness may not exceed one-third of the value of its total assets, including the value of the assets purchased with the proceeds of its indebtedness.

In certain extreme circumstances or market environments, the Fund may reduce its investment in real estate-related investments and hold a larger position in cash or cash equivalents and/or deviate from the allocations ranges described in this prospectus. As is always the case, the Fund may not be able to achieve its investment objective in such circumstances.

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The Fund’s policy of investing, under normal circumstances, at least 80% of its assets in real estate-related investments is non-fundamental and may be changed without shareholder approval. However, shareholders of the Fund will be provided with not less than 60 days’ prior written notice of any change to this policy. The Statement of Additional Information contains a list of other fundamental and non-fundamental investment policies of the Fund under the heading “Investment Objective and Policies.”

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The Sub-Advisor may invest the Fund’s cash balances in any investments it deems appropriate. The Sub-Advisor expects that such investments will be made, without limitation and as permitted under the 1940 Act, in money market funds, repurchase agreements, U.S. Treasury and U.S. agency securities, municipal bonds and bank accounts. Any income earned from such investments is ordinarily reinvested by the Fund in accordance with its investment program. The Fund may, from time to time, take defensive positions that are inconsistent with the Fund’s principal investment strategy in attempts to respond to adverse market, economic, political or other conditions. During such times, the Advisor may determine that the Fund should invest up to 100% of its assets in cash or cash equivalents, including money market instruments, prime commercial paper, repurchase agreements, Treasury bills and other short-term obligations of the U.S. Government, its agencies or instrumentalities. As is always the case, the Fund may not be able to meet its investment objectives in such circumstances.

In general, the Advisor and the Sub-Advisor will manage the Fund’s portfolio over a long-term time investment horizon. The Fund will sell a security if, in the judgment of the applicable portfolio manager, the individual security’s total return potential has been met, the relevant issuer’s fundamentals deteriorate, or a more attractive investment opportunity is identified.

The frequency and amount of portfolio purchases and sales (known as the “portfolio turnover rate”) will vary from year to year. It is anticipated that the Fund’s portfolio turnover rate will ordinarily be between 25% and 75%. The portfolio turnover rate is not expected to exceed 100%, but may vary greatly from year to year and will not be a limiting factor when the Advisor (or, as appropriate, the Sub-Advisor), deems changes appropriate. Although the Fund generally does not intend to trade for short-term profits, the Fund may engage in short-term trading strategies, and securities may be sold without regard to the length of time held when, in the opinion of the Advisor (or, as applicable, Sub-Advisor), investment considerations warrant such action. These policies may have the effect of increasing the annual rate of portfolio turnover of the Fund. Higher rates of portfolio turnover would likely result in higher brokerage commissions and may generate short-term capital gains taxable as ordinary income. If securities are not held for the applicable holding periods, dividends paid on them will not qualify for the advantageous federal tax rates. See “Tax Status” in the Statement of Additional Information.

There can be no assurance as to what portion, if any, of the Fund’s investments will qualify for the reduced federal income tax rates applicable to qualified dividends under the Code. As a result, there can be no assurance as to what portion of the Fund’s distributions will be designated as qualified dividend income. See “U.S. Federal Income Tax Matters.”

Portfolio Investments

Real Estate Investment Trusts.   REITs are pooled investment vehicles that invest primarily in income-producing real estate or real estate-related loans or interests. The market value of REIT shares and the ability of REITs to distribute income may be adversely affected by numerous factors, including rising interest rates, changes in the national, state and local economic climate and real estate conditions, perceptions of prospective tenants of the safety, convenience and attractiveness of the properties, the ability of the owners to provide adequate management, maintenance and insurance costs, the cost of complying with the Americans With Disabilities Act, increasing competition, compliance with environmental laws, changes in real estate taxes and other operating expenses, adverse changes in governmental rules and fiscal policies, adverse changes in zoning laws, and other factors beyond the control of the issuers. In addition, distributions received by the Fund from REITs may consist

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of dividends, capital gains and/or return of capital. As REITs generally pay a higher rate of dividends than most other operating companies, to the extent application of the Fund’s investment strategy results in the Fund investing in REIT shares, the percentage of the Fund’s dividend income received from REIT shares will likely exceed the percentage of the Fund’s portfolio that is comprised of REIT shares.

Dividends paid by REITs will generally not qualify for the reduced federal income tax rates applicable to qualified dividends under the Code. See “U.S. Federal Income Tax Matters.”

REIT Preferred Stock.   The Fund may invest in REIT preferred stock. Preferred stock is a security that pays dividends at a specified rate and generally has a preference over common stock in the payment of dividends and the liquidation of assets. This means that an issuer must generally pay dividends on its preferred stock prior to paying dividends on its common stock. In addition, in the event a company is liquidated, preferred shareholders generally must be fully repaid on their investments before common shareholders can receive any money from the company. Preferred shareholders, however, usually have no right to vote for a company’s directors or on other corporate matters. Preferred stock pays a fixed stream of income to investors, and this income stream is a primary source of the long-term investment return on preferred stocks. As a result, the market value of preferred stock is generally more sensitive to changes in interest rates than the market value of common stock. In this respect, preferred stock share many investment characteristics with debt securities.

REIT Convertible Securities.   Convertible bonds and convertible preferred stock are generally obligations of a company that can be converted into a predetermined number of shares of common stock of the company issuing the security. Convertible securities generally offer both defensive characteristics ( i.e ., provide income during periods when the market price of the underlying common stock declines) and upside potential ( i.e. , may provide capital appreciation when the market price of the underlying common stock rises). The Fund may invest in securities that have been privately placed but are eligible for purchase and sale by certain qualified institutional buyers such as the Fund under Rule 144A under the Securities Act of 1933, as amended.

REIT Debt.   The Fund may also invest in REIT debt, including both current income opportunities and the ability to acquire debt or preferred equity at a discount to face value. REIT preferred equity historically trades at a higher yield and has a lower risk profile than common equity, but also has a lower capital gain potential unless it trades at a discount to par.

Commercial Mortgage-Backed Securities.   The Advisor will also invest the Fund’s assets in CMBSs. CMBSs are bonds which evidence interests in, or are secured by, a single commercial mortgage loan or a pool of commercial mortgage loans. They will be used primarily to provide liquidity for the Fund.

Business Development Companies.   The Fund may also invest in business development companies (“BDCs”). BDCs are a special form of investment company under the Federal securities laws whose principal business is to invest in, lend capital to or provide services to privately-held companies or thinly-traded U.S. public companies. BDCs are subject to an alternative regulatory regime under the 1940 Act. BDCs may be either be listed and publicly traded on a national stock exchange (“Listed BDCs”) or not listed on a national stock exchange (“Non-Traded BDCs”). Non-Traded BDCs are illiquid investments. The Fund’s investments in any Non-Traded BDCs will be managed by the Advisor. Depending on the nature of the BDC’s underlying investments, the Fund’s investments in a BDC may be treated as either real estate-related or non real estate-related investments for purposes of the Fund’s policy of investing at least 80% of its assets in real estate-related investments.

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There are also special risks associated with the particular commercial real estate sectors in which the Fund will invest. These include:

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Dividends paid by REITs will not generally qualify for the reduced U.S. federal income tax rates applicable to qualified dividends under the Code. See “U.S. Federal Income Tax Matters.” The Fund’s investments in REITs may include an additional risk to shareholders. Some or all of a REIT’s annual distributions to its investors may constitute a non-taxable return of capital. Any such return of capital will generally reduce the Fund’s basis in the REIT investment, but not below zero. To the extent that the distributions from a particular REIT exceed the Fund’s basis in such REIT, the Fund will generally recognize gain. In part because REIT distributions often include a non-taxable return of capital, Fund distributions to shareholders may also include a non-taxable return of capital. Shareholders that receive such a distribution will also reduce their tax basis in their shares of the Fund, but not below zero. To the extent that the distribution exceeds a shareholder’s basis in the Fund’s shares, such shareholder will generally recognize a capital gain. The Fund does not have any investment restrictions with respect to investments in REITs.

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The use of derivatives by the Fund could subject the Fund to regulation by the CFTC as a commodity pool requiring compliance with certain CFTC rules. However, the Fund intends to conduct its operations so as to avoid regulation as a commodities pool.

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The political, economic, and social structure of some foreign countries may be less stable and more volatile than those in the United States. Investments in these countries may be subject to the risks of internal and external conflicts, currency devaluations, foreign ownership limitations and tax increases. A government may take over assets or operations of a company or impose restrictions on the exchange or export of currency or other assets. Some countries also may have different legal systems that may make it difficult for us to vote proxies, exercise stockholder rights, and pursue legal remedies with respect to foreign investments. Diplomatic and political developments, including rapid and adverse political changes, social instability, regional conflicts, terrorism and war, could affect the economies, industries and securities and currency markets, and the value of our investments, in non-U.S. countries. These factors are extremely difficult, if not impossible, to predict and to take into account with respect to the Fund’s investments in foreign securities. Brokerage commissions and other fees generally are higher for foreign securities. Government supervision and regulation of foreign stock exchanges, currency markets, trading systems and brokers may be less than in the United States. The procedures and rules governing foreign transactions and custody

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(holding of the Fund’s assets) may involve delays in payment, delivery or recovery of money or investments. Foreign companies may not be subject to the same disclosure, accounting, auditing and financial reporting standards and practices as U.S. companies, and some countries may lack uniform accounting and auditing standards. Thus, there may be less information publicly available about foreign companies than about most U.S. companies. Certain foreign securities may be less liquid (harder to sell) and more volatile than many U.S. securities. This means the Fund may at times be unable to sell foreign securities at favorable prices. Dividend and interest income from foreign securities may be subject to withholding taxes by the country in which the issuer is located, and the Fund may not be able to pass through to its shareholders foreign tax credits or deductions with respect to these taxes.

Fund Structure Risk

In addition to the market risks described above, investing through the Fund may subject to investors to other risks that are inherent in the structure of the Fund itself. These include the following:

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Repurchases of shares will tend to reduce the amount of outstanding shares and, depending upon the Fund’s investment performance, its net assets. A reduction in the Fund’s net assets may increase the Fund’s expense ratio, to the extent that additional shares are not sold. In addition, the repurchase of shares by the Fund may be a taxable event to shareholders.

Conflicts of Interest

In addition to the market and fund structure risks described above, the Fund’s service providers are subject to various potential conflicts of interest that may create incentives to act in ways that are contrary to the best interests of the Fund and its shareholders, including the potential conflicts of interest described below. A number of procedures and controls have been put in place to prevent this from happening. However, there can be no assurance that these measures will be completely effective.

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compensate all Sub-Advisor personnel who provide services to the Fund. In return for these services, facilities and payments, the Advisor has agreed to pay the Sub-Advisor as compensation under the Sub-Advisory Agreement a monthly fee at the annual rate of 1.00% of the Fund’s daily net asset value attributable to that portion of the Fund’s portfolio that has been allocated to the Sub-Advisor by the Advisor. The Sub-Advisor’s fee will be paid by the Advisor out of the fee the Advisor receives from the Fund, and will not impact the Fund’s expenses. The Sub-Advisor may employ research services and service providers to assist in the Sub-Advisor’s market analysis and investment selection.

Portfolio Managers

Mark Painter

Mark Painter serves as a Portfolio Manager of the Fund, with primary responsibility for overseeing the overall allocation of the Fund’s portfolio and for managing the portion of the Fund’s portfolio not allocated to the Sub-Advisor. Mr. Painter has over nine years of experience in the financial services industry, including more than five years analyzing and investing in real estate industry securities. However, he has no prior experience managing a registered closed-end investment company. In addition to his responsibilities at the Advisor, Mr. Painter is a Portfolio Manager at The Stanley Laman Group. In that capacity, Mr. Painter oversees approximately $600 million in managed securities. Mr. Painter began his career with the Stanley Laman Group in 2004. He has been the co-manager on SLG High Growth and Fixed Income since February of 2005, SLG High Dividend and Value since February 2010, SLG Micro-Cap since December 2010, SLG International Opportunities LP since February 2012, and SLG Risk Managed since March 2013. Mr. Painter graduated from Carnegie Mellon University in 2004 with a degree in Business Administration and a concentration in Finance. He has been a Chartered Financial Analyst since 2009.

Christopher Pike

Christopher Pike also serves as a portfolio manager of the Fund and has primary responsibility for managing the portion of the Fund’s investment portfolio allocated to the Sub-Advisor by the Advisor. Christopher Pike is the Chief Investment Officer of the Sub-Advisor. Mr. Pike has over 22 years of experience in the financial services industry, including more than 17 years analyzing and investing in real estate industry securities. However, he has no prior experience managing a registered closed-end investment company. Prior to joining the Sub-Advisor in May 2012, Mr. Pike was the Director of Investment Research at ARC. His responsibilities included equity and property research on the non-listed REITs and publicly-listed REITs. Prior to joining ARC in August 2011, beginning in December of 2009, Mr. Pike was an equity research analyst at Fagenson & Company, Inc. in New York. From March 2006 until December of 2008, Mr. Pike was an equity research analyst at Merrill Lynch, and from September 2003 until March 2006, he was an equity research analyst at UBS. In addition, he was previously an analyst at Wachovia and a member of the real estate investment banking team at Goldman Sachs. He attended Rutgers College at Rutgers University. Mr. Pike holds FINRA Series 7 and 63 licenses and is a Chartered Financial Analyst.

The Statement of Additional Information provides additional information about the Fund’s portfolio managers’ compensation, other accounts managed and ownership of Fund shares.

Administrator, Accounting Agent and Transfer Agent

RCS Advisory Services, LLC (the “Administrator”), located at 405 Park Avenue, New York, NY 10022, serves as the Fund’s administrator. As compensation for these services, the Fund has agreed to pay the Administrator under the Administrative Services Agreement a monthly fee calculated at the annual rate of 0.20% of the Fund’s daily net assets. The Administrator is a subsidiary of RCS Capital, LLC, and an affiliate of the Fund’s Distributor and of ARC.

American National Stock Transfer, LLC (the “Transfer Agent”), located at 405 Park Avenue, New York, NY 10022, serves as the Fund' transfer agent. As compensation for these services, the Fund has agreed to pay the Transfer Agent under the Transfer Agent Services Agreement a monthly fee based on the number of shareholder accounts maintained by ANST on behalf of the Fund and the amount of shareholder services performed by ANST on behalf of the Fund’s shareholders. The Transfer Agent is a subsidiary of RCS Capital, LLC and an affiliate of the Fund's Distributor and of ARC.

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Gemini Fund Services, LLC (“GFS”), located at 80 Arkay Drive, Suite 110, Hauppauge, NY 11788, serves as the Fund’s sub-administrator, fund accounting agent and sub-transfer agent. GFS will be compensated for these services by the Administrator and the Transfer Agent, respectively. These fees will be paid by the Administrator and the Transfer Agent out of the fees they receive from the Fund, and will not impact the Fund’s expenses.

Custodian

Union Bank, N.A., with principal offices at 350 California Street, 6th Floor, San Francisco, CA 94104, serves as custodian for the securities and cash of the Fund’s portfolio. Under a Custody Agreement, Union Bank holds the Fund’s assets in safekeeping and keeps all necessary records and documents relating to its duties.

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approves its modification or termination. The Expense Limitation Agreement may be terminated only by the Fund’s Board on 60 days written notice to the Advisor. After the initial one-year term, the Expense Limitation Agreement may be renewed at the Advisor’s and Board’s discretion.

The Management and Sub-Advisory Agreements authorize the Advisor and, where appropriate, the Sub-Advisor, to select brokers or dealers (including affiliates) to arrange for the purchase and sale of Fund securities, including principal transactions. Any commission, fee or other remuneration paid to an affiliated broker or dealer is paid in compliance with the Fund’s procedures adopted in accordance with Rule 17e-1 under the 1940 Act.

Control Persons

A control person is one who owns, either directly or indirectly, more than 25% of the voting securities of a company or acknowledges the existence of control. As of the date of this prospectus, the Fund could be deemed to be under control of ARC, which had voting authority with respect to approximately 100% of the value of the outstanding interests in the Fund on such date. However, it is expected that once the Fund commences investment operations and its shares are sold to the public that ARC’s control will be diluted until such time as the Fund is controlled by its unaffiliated shareholders.

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Readily marketable securities traded in the over-the-counter market, including listed securities whose primary market is believed by the Advisor to be over-the-counter, are valued at the mean of the current bid and asked prices as reported by NASDAQ or, in the case of securities not reported by NASDAQ or a comparable source, as the Board deems appropriate to reflect their fair market value. Where securities are traded on more than one exchange and also over-the-counter, the securities will generally be valued using the quotations the Board believes reflect most closely the value of such securities.

For purposes of this section, the “last reported” trade price or sale price or “closing” bid price of a security on any trading day shall be deemed to be: (a) with respect to securities traded primarily on the NYSE, the American Stock Exchange or NASDAQ, the last reported trade price or sale price, as the case may be, as of 4:00 p.m., Eastern Time, on that day, and (b) for securities listed, traded or quoted on any other exchange, market, system or service, the market price as of the end of the “regular hours” trading period that is generally accepted as such by such exchange, market, system or service. If, in the future, the benchmark times generally accepted in the securities industry for determining the market price of a stock as of a given trading day shall change from those set forth above, the fair market value of a security shall be determined as of such other generally accepted benchmark times.

Non-dollar-denominated securities, if any, are valued as of the close of the New York Stock Exchange (the “NYSE”) at the closing price of such securities in their principal trading market, but may be valued at fair value if subsequent events occurring before the computation of NAV have materially affected the value of the securities. Trading may take place in foreign issues held by the Fund, if any, at times when the Fund is not open for business. As a result, the Fund’s NAV may change at times when it is not possible to purchase or sell shares of the Fund. The Fund’s NAV per share is calculated by dividing the value of the Fund’s total assets (the value of the securities the Fund holds plus cash or other assets, including interest accrued but not yet received), less accrued expenses of the Fund, less the Fund’s other liabilities by the total number of shares outstanding. The Fund may use a third party pricing service to assist it in determining the market value of securities in the Fund’s portfolio.

Investments in privately placed debt instruments and securities of real estate related operating businesses (other than joint ventures), such as real estate development or management companies, other than investments in Non-Traded REITs (discussed below), initially will be valued by the Advisor at cost (purchase price plus all related acquisition costs and expenses, such as legal fees and closing costs) and thereafter will be revalued quarterly at fair value by the Advisor and the Board, with the approval of the independent trustees.

Investments in mortgages initially will be valued by the Advisor at acquisition cost and may be revalued by the Advisor and the Board from time to time. Revaluations of mortgages will reflect changes in the value of the underlying real estate, with estimated cash flows discounted to their present value using a discount rate based on current market rates.

Liquid non-real estate related assets, such as cash and cash equivalents, will be valued daily by GFS, with the approval of the independent trustees on a quarterly basis.

Valuation of Investments in Non-Traded REITs and Other Non-Traded Investment Vehicles

The Board has approved procedures pursuant to which the Fund will value its investments in Non-Traded REITs at fair value. In accordance with these procedures, the Administrator and GFS shall use their best efforts to ensure that valuation policies and procedures are in place at each of the Non-Traded REITs in which the Fund invests that are substantially consistent with the practices provided for in the Real Estate Information Standards (“REIS”) as established and amended by the National Council of Real Estate Investment Fiduciaries (“NCRIEF”) in conjunction with the Pension Real Estate Association (“PREA”), or comparable standards which may apply. REIS provides underlying principles behind the disclosure of reliable information with adequate policies and practices that include, but are not limited to, the following:

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Before investing in any Non-Traded REIT, the Advisor will conduct a due diligence review of the valuation methodology utilized by the Non-Traded REIT, which as a general matter will utilize market values when available, and otherwise utilize principles of fair value that the Advisor reasonably believes to be consistent with (but not necessarily the same as) those used by the Fund for valuing its own investments. After investing in a Non-Traded REIT, the Advisor will monitor the valuation methodology used by such REIT.

As a general matter, the Fund’s investments in Non-Traded REITs will be valued at the cost of the security as of the date of purchase, until a different fair valuation can be determined through either a public filing by the non-traded investment vehicle providing a calculation of the investment vehicle’s net asset value per share, a public declaration of a material event effecting valuation by the issuer, or a liquidity event (such as a public offering of securities, listing or merger). The Advisor will make inquiries, no less frequently than once a quarter, to determine if any impairments have occurred that may negatively effect the fair valuation of each Non-Traded REIT. The Advisor will document these inquiries, and promptly inform the Board of any impairment reported by the Non-Traded REIT and its impact on the fair value of the Fund’s investment in the Non-Traded REIT. The independent trustees will determine if the impairment materially effects the fair valuation of the security as it relates to the NAV of the Fund.

The Fund bases its NAV determinations largely on valuations of its interests in Non-Traded REITs and other non-traded investment vehicles provided by the Advisor and GFS. These fair value calculations will involve significant professional judgment in the application of both observable and unobservable attributes, the calculated net asset values of the non-traded investment vehicle assets may differ from their actual realizable value or future fair value. Valuations will be provided to the Fund based on the interim unaudited financial records of the non-traded investment vehicles, and, therefore, will be estimates subject to adjustment (upward or downward) upon the auditing of such financial records and may fluctuate as a result. Furthermore, the Board may not have the ability to assess the accuracy of these valuations.

For the quarterly periods that the NAV of the non-traded investment vehicles are calculated, the Board will perform an independent review of the valuation of the Fund’s portfolio and review any material concerns. The Board will consider all relevant information and the reliability of pricing information. They may conclude, however, in certain circumstances, that the information does not represent the fair value of the Fund’s interests in the non-traded investment vehicle and is not indicative of what actual fair value would be in an active, liquid or established market. In those circumstances, the Fund might value its interests in the non-traded investment vehicle at a discount or a premium to the value it receives from the non-traded investment vehicle. Following procedures adopted by the Board, in the absence of specific transaction activity in respect of interests in a particular non-traded investment vehicle, the Fund would consider whether it was appropriate, in light of all relevant circumstances, to value such a position at its NAV as reported at the time of valuation, or whether to adjust such value to reflect a premium or discount to NAV. Any such decision would be made in good faith, and subject to the review and supervision of the Board.

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QUARTERLY REPURCHASES OF SHARES

Once each quarter, the Fund will offer to repurchase at NAV no less than 5% of the outstanding shares of the Fund, unless such offer is suspended or postponed in accordance with regulatory requirements (as discussed below). The Fund may increase the size of these offerings up to a maximum of 25% of the Fund’s outstanding shares, in the sole discretion of the Board, but it is not expected that the Board will do so. The offer to purchase shares is a fundamental policy that may not be changed without the vote of the holders of a majority of the Fund’s outstanding voting securities (as defined in the 1940 Act). Shareholders will be notified in writing of each quarterly repurchase offer and the date the repurchase offer ends (the “Repurchase Request Deadline”). Shares will be repurchased at the NAV per share determined as of the close of regular trading on the NYSE no later than the 14th day after the Repurchase Request Deadline, or the next business day if the 14th day is not a business day (each a “Repurchase Pricing Date”). The Fund expects its first Repurchase Request Deadline will be at the end of the second calendar quarter of 2014.

Shareholders will be notified in writing about each quarterly repurchase offer, how they may request that the Fund repurchase their shares, and the “Repurchase Request Deadline,” which is the date the repurchase offer ends. Shares tendered for repurchase by shareholders prior to any Repurchase Request Deadline will be repurchased subject to the aggregate repurchase amounts established for that Repurchase Request Deadline. The time between the notification to shareholders and the Repurchase Request Deadline is generally 30 days, but may vary from no more than 42 days to no less than 21 days. Payment pursuant to the repurchase will be made by checks to the shareholder’s address of record, or credited directly to a predetermined bank account on the Purchase Payment Date, which will be no more than seven days after the Repurchase Pricing Date. The Board may establish other policies for repurchases of shares that are consistent with the 1940 Act, regulations thereunder and other pertinent laws.

Determination of Repurchase Offer Amount

The Board, or a committee thereof, in its sole discretion, will determine the number of shares that the Fund will offer to repurchase (the “Repurchase Offer Amount”) for a given Repurchase Request Deadline. The Repurchase Offer Amount, however, will be no less than 5% of the total number of shares outstanding on the Repurchase Request Deadline. The Board may increase the size of Repurchase Offer Amount, up to a maximum of 25% of the total number of shares outstanding on the Repurchase Request Deadline, but it is not expected that the Board will do so.

Notice to Shareholders

Approximately 30 days (but no less than 21 days and more than 42 days) before each Repurchase Request Deadline, the Fund shall send to each shareholder of record and to each beneficial owner of the shares that are the subject of the repurchase offer a notification (a “Shareholder Notification”). The Shareholder Notification will contain information shareholders should consider in deciding whether to tender their shares for repurchase. The Shareholder Notification also will include detailed instructions on how to tender shares for repurchase, state the Repurchase Offer Amount and identify the dates of the Repurchase Request Deadline, the scheduled Repurchase Pricing Date, and the date the repurchase proceeds are scheduled for payment (the “Repurchase Payment Deadline”). The Shareholder Notification also will set forth the NAV that has been computed no more than seven days before the date of such notification, and how shareholders may ascertain the NAV after the notification date.

Repurchase Price

The repurchase price of the shares will be the NAV as of the close of regular trading on the NYSE on the Repurchase Pricing Date. You may call 1-866-271-9244 to learn the NAV. The Shareholder Notification will provide information concerning the NAV, such as the NAV as of a recent date or a sampling of recent NAVs, and a toll-free number for information regarding the repurchase offer.

Redemption Fee

For shares held for less than 91 days, the Fund will deduct a 2% redemption fee from the redemption amount if the shares are sold pursuant to the Fund’s quarterly repurchase program. Shares held longest will be treated as being repurchased first and shares held shortest as being repurchased last. The redemption fee does

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not apply to shares that were acquired through reinvestment of distributions. Shares held for 91 days or more are not subject to the 2% fee. Redemption fees are paid to the Fund directly and are designed to offset costs associated with fluctuations in Fund asset levels and cash flow caused by short-term shareholder trading.

Repurchase Amounts and Payment of Proceeds

Shares tendered for repurchase by shareholders prior to any Repurchase Request Deadline will be repurchased subject to the aggregate Repurchase Offer Amount established for that Repurchase Request Deadline. Payment pursuant to the repurchase offer will be made by check to the shareholder’s address of record, or credited directly to a predetermined bank account on the Purchase Payment Date, which will be no more than seven days after the Repurchase Pricing Date. The Board may establish other policies for repurchases of shares that are consistent with the 1940 Act, regulations thereunder and other pertinent laws.

If shareholders tender for repurchase more than the Repurchase Offer Amount for a given repurchase offer, the Fund may, but is not required to, repurchase an additional amount of shares not to exceed 2% of the outstanding shares of the Fund on the Repurchase Request Deadline. If the Fund determines not to repurchase more than the Repurchase Offer Amount, or if shareholders tender shares in an amount exceeding the Repurchase Offer Amount plus 2% of the outstanding shares on the Repurchase Request Deadline, the Fund will repurchase the shares on a pro rata basis. However, the Fund may accept all shares tendered for repurchase by shareholders who own less than one hundred shares and who tender all of their shares, before prorating other amounts tendered. In addition, the Fund will accept the total number of shares tendered in connection with required minimum distributions from an IRA or other qualified retirement plan. It is the shareholder’s obligation to both notify and provide the Fund supporting documentation of a required minimum distribution from an IRA or other qualified retirement plan.

Suspension or Postponement of Repurchase Offer

The Fund may suspend or postpone a repurchase offer only: (a) if making or effecting the repurchase offer would cause the Fund to lose its status as a regulated investment company under the Code; (b) for any period during which the NYSE or any market on which the securities owned by the Fund are principally traded is closed, other than customary weekend and holiday closings, or during which trading in such market is restricted; (c) for any period during which an emergency exists as a result of which disposal by the Fund of securities owned by it is not reasonably practicable, or during which it is not reasonably practicable for the Fund fairly to determine the value of its net assets; or (d) for such other periods as the SEC may by order permit for the protection of shareholders of the Fund.

Liquidity Requirements

The Fund must maintain liquid assets equal to the Repurchase Offer Amount from the time that the Shareholder Notification is sent to shareholders until the Repurchase Pricing Date. The Fund will ensure that a percentage of its net assets equal to at least 100% of the Repurchase Offer Amount consists of assets that can be sold or disposed of in the ordinary course of business at approximately the price at which the Fund has valued the investment within the time period between the Repurchase Request Deadline and the Repurchase Payment Deadline. The Board has adopted procedures that are reasonably designed to ensure that the Fund’s assets are sufficiently liquid so that the Fund can comply with the repurchase offer and the liquidity requirements described in the previous paragraph. If, at any time, the Fund falls out of compliance with these liquidity requirements, the Board will take whatever action it deems appropriate to ensure compliance.

Consequences of Repurchase Offers

Repurchase offers will typically be funded from available cash or sales of portfolio securities. Payment for repurchased shares, however, may require the Fund to liquidate portfolio holdings earlier than the Advisor or the Sub-Adviser, as applicable, otherwise would, thus increasing the Fund’s portfolio turnover and potentially causing the Fund to realize losses. The Advisor intends to take measures to attempt to avoid or minimize such potential losses and turnover, and instead of liquidating portfolio holdings, may borrow money to finance repurchases of shares. If the Fund borrows to finance repurchases, interest on that borrowing will negatively affect shareholders who do not tender their shares in a repurchase offer by increasing the Fund’s expenses and reducing any net investment income. To the extent the Fund finances repurchase amounts by selling Fund investments, the Fund

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may hold a larger proportion of its assets in less liquid securities. The sale of portfolio securities to fund repurchases also could reduce the market price of those underlying securities, which in turn would reduce the Fund’s NAV.

Repurchase of the Fund’s shares will tend to reduce the amount of outstanding shares and, depending upon the Fund’s investment performance, its net assets. A reduction in the Fund’s net assets would increase the Fund’s expense ratio, to the extent that additional shares are not sold and expenses otherwise remain the same (or increase). In addition, the repurchase of shares by the Fund will be a taxable event to shareholders.

The Fund is intended as a long-term investment. The Fund’s quarterly repurchase offers are a shareholder’s only means of liquidity with respect to his or her shares. Shareholders have no rights to redeem or transfer their shares, other than limited rights of a shareholder’s descendants to redeem shares in the event of such shareholder’s death pursuant to certain conditions and restrictions. The shares are not traded on a national securities exchange and no secondary market exists for the shares, nor does the Fund expect a secondary market for its shares to exist in the future.

DISTRIBUTION POLICY

Quarterly Distribution Policy

The Fund intends to make a distribution each quarter to its shareholders of the net investment income of the Fund after payment of Fund operating expenses. The distribution rate may be modified by the Board from time to time. If, for any quarterly distribution, investment company taxable income (which term includes net short-term capital gain), if any, and net tax-exempt income, if any, is less than the amount of the distribution, then assets of the Fund will be sold and the difference will generally be a tax-free return of capital distributed from the Fund’s assets. The Fund’s final distribution for each calendar year will include any remaining investment company taxable income and net tax-exempt income undistributed during the year, as well as all net capital gain realized during the year. If the total distributions made in any calendar year exceed investment company taxable income, net tax-exempt income and net capital gain, such excess distributed amount would be treated as ordinary dividend income to the extent of the Fund’s current and accumulated earnings and profits. Distributions in excess of the earnings and profits would first be a tax-free return of capital to the extent of the adjusted tax basis in the shares. After such adjusted tax basis is reduced to zero, the distribution would constitute capital gain (assuming the shares are held as capital assets). This distribution policy may, under certain circumstances, have certain adverse consequences to the Fund and its shareholders because it may result in a return of capital resulting in less of a shareholder’s assets being invested in the Fund and, over time, increase the Fund’s expense ratio. The distribution policy also may cause the Fund to sell a security at a time it would not otherwise do so in order to manage the distribution of income and gain. To the extent that any distribution made by the Fund represents a return of shareholders’ capital, any such distribution will not represent a dividend payment and simply will be treated as a return of capital originally invested by shareholders. The initial distribution will be declared on a date determined by the Board. If the Fund’s investments are delayed, the initial distribution may consist principally of a return of capital. Although a return of shareholder capital generally is not taxable to the recipient, any such return of capital will serve to reduce the shareholder’s tax basis in the shares which will result in a greater tax liability when the shares are sold, even if they have not increased in value or have, in fact, lost value.

Unless the registered owner of shares elects to receive cash, all distributions declared on shares will be automatically reinvested in additional shares of the Fund. See “Dividend Reinvestment Policy.”

The distribution described above may result in the payment of approximately the same amount or percentage to the Fund’s shareholders each quarter. Section 19(a) of the 1940 Act and Rule19a-1 thereunder require the Fund to provide a written statement accompanying any such payment that adequately discloses its source or sources. Thus, if the source of a dividend or other distribution were the original capital contribution of the shareholder, and the payment amounted to a return of capital, the Fund would be required to provide written disclosure to that effect. Nevertheless, persons who periodically receive the payment of a dividend or other distribution may be under the impression that they are receiving net profits when they are not. Shareholders should read any written disclosure provided pursuant to Section 19(a) and Rule 19a-1 carefully and should not assume that the source of any distribution from the Fund is net profit.

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The Board reserves the right to change the quarterly distribution policy from time to time.

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U.S. FEDERAL INCOME TAX MATTERS

The following briefly summarizes some of the important federal income tax consequences to shareholders of investing in the Fund’s shares, reflects the federal tax law as of the date of this prospectus, and does not address special tax rules applicable to certain types of investors, such as corporate, tax-exempt and foreign investors. Investors should consult their tax advisers regarding other federal, state or local tax considerations that may be applicable in their particular circumstances, as well as any proposed tax law changes.

The following is a summary discussion of certain U.S. federal income tax consequences that may be relevant to a shareholder of the Fund that acquires, holds and/or disposes of shares of the Fund, and reflects provisions of the Code, existing Treasury regulations, rulings published by the IRS, and other applicable authority, as of the date of this prospectus. These authorities are subject to change by legislative or administrative action, possibly with retroactive effect. The following discussion is only a summary of some of the important tax considerations generally applicable to investments in the Fund and the discussion set forth herein does not constitute tax advice. For more detailed information regarding tax considerations, see the Statement of Additional Information. There may be other tax considerations applicable to particular investors such as those holding shares in a tax deferred account such as an IRA or 401(k) plan. In addition, income earned through an investment in the Fund may be subject to state, local and foreign taxes.

The Fund intends to elect to be treated and to qualify each year for taxation as a regulated investment company under Subchapter M of the Code. In order for the Fund to qualify as a regulated investment company, it must meet an income and asset diversification test each year. If the Fund so qualifies and satisfies certain distribution requirements, the Fund (but not its shareholders) will not be subject to federal income tax to the extent it distributes its investment company taxable income and net capital gains (the excess of net long-term capital gains over net short-term capital loss) in a timely manner to its shareholders in the form of dividends or capital gain distributions. The Code imposes a 4% nondeductible excise tax on regulated investment companies, such as the Fund, to the extent that they do not meet certain distribution requirements by the end of each calendar year. The Fund anticipates meeting these distribution requirements.

The Fund intends to make distributions of investment company taxable income after payment of the Fund’s operating expenses no less frequently than annually. Unless a shareholder is ineligible to participate or elects otherwise, all distributions will be automatically reinvested in additional shares of the Fund pursuant to the dividend reinvestment policy. For U.S. federal income tax purposes, all dividends are generally taxable whether a shareholder takes them in cash or they are reinvested pursuant to the policy in additional shares of the Fund. Distributions of the Fund’s investment company taxable income (including short-term capital gains) will generally be treated as ordinary income to the extent of the Fund’s current and accumulated earnings and profits. Distributions of the Fund’s net capital gains (“capital gain dividends”), if any, are taxable to shareholders as capital gains, regardless of the length of time shares have been held by shareholders. Distributions, if any, in excess of the Fund’s earnings and profits will first reduce the adjusted tax basis of a holder’s shares and, after that basis has been reduced to zero, will constitute capital gains to the shareholder of the Fund (assuming the shares are held as a capital asset). A corporation that owns Fund shares generally will not be entitled to the dividends received deduction with respect to all of the dividends it receives from the Fund. Fund dividend payments that are attributable to qualifying dividends received by the Fund from certain domestic corporations may be designated by the Fund as being eligible for the dividends received deduction. There can be no assurance as to what portion of Fund dividend payments may be classified as qualifying dividends. The determination of the character for U.S. federal income tax purposes of any distribution from the Fund (i.e. ordinary income dividends, capital gains dividends, qualified dividends or return of capital distributions) will be made as of the end of the Fund’s taxable year. Generally, no later than 60 days after the close of its taxable year, the Fund will provide shareholders with a written notice designating the amount of any capital gain distributions and any other distributions.

Because many of the Fund’s REIT investments will make distributions in excess of their taxable income, due in part to available depreciation deductions, it is expected that a portion of such distributions will constitute a non-taxable return of capital. Any return of capital generally will reduce the Fund’s tax basis in the REIT investment but not below zero. To the extent the distributions from a particular REIT exceed the Fund’s tax basis in the REIT shares, the Fund generally will recognize capital gain. Shareholders of the Fund may also receive distributions that constitute a non-taxable return of capital. Shareholders of the Fund who

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receive such a distribution will reduce the tax basis in their Fund shares but not below zero. To the extent that such a distribution exceeds a shareholder’s tax basis in Fund shares, such shareholder generally will recognize a capital gain.

The Fund will inform its shareholders of the source and tax status of all distributions promptly after the close of each calendar year.

DESCRIPTION OF CAPITAL STRUCTURE AND SHARES

The Fund is an unincorporated statutory trust established under the laws of the State of Delaware upon the filing of a Certificate of Trust with the Secretary of State of Delaware on March 23, 2011. The Fund’s Amended and Restated Declaration of Trust (the “Declaration of Trust”) provides that the trustees of the Fund may authorize separate classes of shares of beneficial interest. The trustees have authorized an unlimited number of shares, subject to a $5 billion limit on the Fund. The Fund does not intend to hold annual meetings of its shareholders.

Shares

The Declaration of Trust, which has been filed with the SEC, permits the Fund to issue an unlimited number of full and fractional shares of beneficial interest, no par value. Each share of the Fund represents an equal proportionate interest in the assets of the Fund with each other share in the Fund. Holders of shares will be entitled to the payment of dividends when, as and if declared by the Board. The Fund currently intends to make dividend distributions to its shareholders after payment of Fund operating expenses, including interest, on outstanding borrowings, if any, no less frequently than quarterly. Unless the registered owner of shares elects to receive cash, all dividends declared on shares will be automatically reinvested for shareholders in additional shares of the Fund. See “Dividend Reinvestment Policy.” The 1940 Act may limit the payment of dividends to the holders of shares. Each whole share shall be entitled to one vote as to matters on which it is entitled to vote pursuant to the terms of the Declaration of Trust on file with the SEC. Upon liquidation of the Fund, after paying or adequately providing for the payment of all liabilities of the Fund, and upon receipt of such releases, indemnities and refunding agreements as they deem necessary for their protection, the trustees may distribute the remaining assets of the Fund among its shareholders. The shares are not liable to further calls or to assessment by the Fund. There are no pre-emptive rights associated with the shares. The Declaration of Trust provides that the Fund’s shareholders are not liable for any liabilities of the Fund. Although shareholders of an unincorporated statutory trust established under Delaware law may, in certain limited circumstances, be held personally liable for the obligations of the Fund as though they were general partners, the provisions of the Declaration of Trust described in the foregoing sentence make the likelihood of such personal liability remote.

The Fund will not generally issue share certificates. However, upon written request to the Fund’s transfer agent, a share certificate may be issued at the Fund’s discretion for any or all of the full shares credited to an investor’s account. Share certificates that have been issued to an investor may be returned at any time. The Fund’s transfer agent will maintain an account for each shareholder upon which the registration of shares are recorded, and transfers, permitted only in rare circumstances, such as death or bona fide gift, will be reflected by bookkeeping entry, without physical delivery. The Administrator will require that a shareholder provide requests in writing, accompanied by a valid signature guarantee form, when changing certain information in an account such as wiring instructions or telephone privileges.

ANTI-TAKEOVER PROVISIONS IN THE DECLARATION OF TRUST

The Declaration of Trust includes provisions that could have the effect of limiting the ability of other entities or persons to acquire control of the Fund or to change the composition of the Board, and could have the effect of depriving the Fund’s shareholders of an opportunity to sell their shares at a premium over prevailing market prices, if any, by discouraging a third party from seeking to obtain control of the Fund. These provisions may have the effect of discouraging attempts to acquire control of the Fund, which attempts could have the effect of increasing the expenses of the Fund and interfering with the normal operation of the Fund. The trustees are elected for indefinite terms and do not stand for reelection. A trustee may be removed from office without cause only by a written instrument signed or adopted by a majority of the remaining

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trustees or by a vote of the holders of at least two-thirds of the class of shares of the Fund that are entitled to elect a trustee and that are entitled to vote on the matter. The Declaration of Trust does not contain any other specific inhibiting provisions that would operate only with respect to an extraordinary transaction such as a merger, reorganization, tender offer, sale or transfer of substantially all of the Fund’s asset, or liquidation. Reference should be made to the Declaration of Trust on file with the SEC for the full text of these provisions.

PLAN OF DISTRIBUTION

Realty Capital Securities, LLC (the “Distributor”), located at 405 Park Avenue, 15th Floor, New York, NY 10022, serves as the Fund’s principal underwriter and acts as the distributor of the Fund’s shares on a best efforts basis, subject to various conditions. The Fund’s shares are offered for sale through the Distributor at NAV plus the applicable sales load. The Distributor also may enter into selected dealer agreements with other broker dealers for the sale and distribution of the Fund’s shares. In reliance on Rule 415 of the Securities Act of 1933, as amended, the Fund intends to offer to sell up to 100,000,000 of its shares through the Distributor. The Distributor is not required to sell any specific number or dollar amount of the Fund’s shares, but will use its best efforts to sell the shares. Shares of the Fund will not be listed on any national securities exchange and the Distributor will not act as a market maker in Fund shares.

The Advisor, the Sub-Advisor or their respective affiliates, in their discretion and from their own resources, may pay additional compensation to brokers or dealers in connection with the sale and distribution of Fund shares (“Additional Compensation”). In return for Additional Compensation, the Fund may receive certain marketing advantages including access to a broker’s or dealer’s registered representatives, placement on a list of investment options offered by a broker or dealer, or the ability to assist in training and educating the broker’s or dealer’s registered representatives. The Additional Compensation may differ among brokers or dealers in amount or in the manner of calculation For example, payments of Additional Compensation may be fixed dollar amounts, or based on the aggregate value of outstanding shares held by shareholders introduced by the broker or dealer. The receipt of Additional Compensation by a selling broker or dealer may create potential conflicts of interest between an investor and its broker or dealer who is recommending the Fund over other potential investments. Additionally, the Fund, the Advisor, the Sub-Advisor and/or their respective affiliates, may pay a servicing fee to the Distributor and to other selected securities dealers and other financial industry professionals for providing ongoing services in respect of clients with whom they have distributed shares of the Fund. Such services may include electronic processing of client orders, electronic fund transfers between clients and the Fund, account reconciliations with the Fund’s transfer agent, facilitation of electronic delivery to clients of Fund documentation, monitoring client accounts for back-up withholding and any other special tax reporting obligations, maintenance of books and records with respect to the foregoing, and such other information and liaison services as the Fund, the Advisor or that Sub-Advisor may reasonably request. Pursuant to a Shareholder Servicing Plan and Agreement, the Fund’s (and, indirectly, the Fund’s shareholders’) share of such servicing fees will not exceed an annual rate of 0.25% of the Fund’s average daily net asset value.

The Fund has agreed to indemnify the Distributor against certain liabilities, including liabilities under the Securities Act of 1933, as amended, or to contribute to payments the Distributor may be required to make because of any of those liabilities. Such agreement does not include indemnification of the Distributor against liability resulting from willful misfeasance, bad faith or negligence on the part of the Distributor in the performance of its duties or from reckless disregard by the Distributor of its obligations and duties under the Distribution Agreement. The Distributor may, from time to time, engage in transactions with or perform services for ARC and its affiliates in the ordinary course of business.

Prior to the initial public offering of shares, ARC purchased shares from the Fund in an amount satisfying the net worth requirements of Section 14(a) of the 1940 Act.

Purchasing Shares

Investors may purchase shares directly from the Fund in accordance with the instructions below. Investors will be assessed fees for returned checks and stop payment orders at prevailing rates charged by GFS. The returned check and stop payment fee is currently $25. Investors may buy and sell shares of the Fund through financial intermediaries and their agents that have made arrangements with the Fund and are

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authorized to buy and sell shares of the Fund (collectively, “Financial Intermediaries”). Orders will be priced at the appropriate price next computed after it is received by a Financial Intermediary and accepted by the Fund. A Financial Intermediary may hold shares in an omnibus account in the Financial Intermediary’s name or the Financial Intermediary may maintain individual ownership records. The Fund may pay the Financial Intermediary for maintaining individual ownership records as well as providing other shareholder services. Financial intermediaries may charge fees for the services they provide in connection with processing your transaction order or maintaining an investor’s account with them. Investors should check with their Financial Intermediary to determine if it is subject to these arrangements. Financial Intermediaries are responsible for placing orders correctly and promptly with the Fund, forwarding payment promptly. Orders transmitted with a Financial Intermediary before the close of regular trading (generally 4:00 p.m., Eastern Time) on a day that the NYSE is open for business, will be priced based on the Fund’s NAV next computed after it is received by the Financial Intermediary.

Subscription proceeds will be placed in escrow until shares producing gross offering proceeds of $15 million, the minimum offering threshold, have been sold by the Fund. Any shares purchased by the Advisor, ARC or their respective affiliates will not be counted in calculating the minimum offering. Following the initial release of funds from escrow, funds raised will be held in escrow pending bi-monthly closings. At such time as (i) the Fund has met its minimum offering requirement and (ii) the date of each bi-monthly closing, subscription funds held by the escrow agent will be released from escrow to the Fund within approximately 30 days and investors with subscription funds held in the escrow will be admitted as shareholders as soon as practicable, but in no event later than 15 days after such release. Funds in escrow will be invested in short-term investments, which may include obligations of, or obligations guaranteed by, the U.S. government or bank money-market accounts or certificates of deposit of national or state banks that have deposits insured by the Federal Deposit Insurance Corporation (including certificates of deposit of any bank acting as a depository or custodian for any such funds) that can be readily sold, with appropriate safety of principal. Subscribers may not withdraw funds from the escrow account.

Interest will accrue on funds in the escrow account as applicable to the short-term investments in which such funds are invested. During any period in which subscription proceeds are held in escrow, interest earned thereon will be allocated among subscribers on the basis of the respective amounts of their subscriptions and the number of days that such amounts were on deposit. Such interest will be paid to subscribers upon the termination of the escrow period, subject to withholding for taxes pursuant to applicable Treasury Regulations. The Fund will bear all expenses of the escrow and, as such, any interest to be paid to any subscriber will not be reduced for such expense.

By Mail

To make an initial purchase by mail, complete an account application and mail the application, together with a check made payable to American Real Estate Income Fund to:

American Real Estate Income Fund
c/o Gemini Fund Services, LLC
17605 Wright Street, Suite 2
Omaha, NE 68130

All checks must be in U.S. Dollars drawn on a domestic bank. The Fund will not accept payment in cash or money orders. The Fund also does not accept cashier’s checks in amounts of less than $10,000. To prevent check fraud, the Fund will not accept third party checks, Treasury checks, credit card checks, traveler’s checks or starter checks for the purchase of shares, nor will the Fund accept post-dated checks, post-dated on-line bill pay checks, or any conditional purchase order or payment.

The transfer agent will charge a $25.00 fee against an investor’s account, in addition to any loss sustained by the Fund, for any payment that is returned. It is the policy of the Fund not to accept applications under certain circumstances or in amounts considered disadvantageous to shareholders. The Fund reserves the right to reject any application.

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By Wire — Initial Investment

To make an initial investment in the Fund, the transfer agent must receive a completed account application before an investor wires funds. Investors may mail or overnight deliver an account application to the transfer agent. Upon receipt of the completed account application, the transfer agent will establish an account. The account number assigned will be required as part of the instruction that should be provided to an investor’s bank to send the wire. An investor’s bank must include both the name of the Fund, the account number, and the investor’s name so that monies can be correctly applied. If you wish to wire money to make an investment in the Fund, please call the Fund at 1-866-271-9244 for wiring instructions and to notify the Fund that a wire transfer is coming. Any commercial bank can transfer same-day funds via wire. The Fund will normally accept wired funds for investment on the day received if they are received by the Fund’s designated bank before the close of regular trading on the NYSE. Your bank may charge you a fee for wiring same-day funds. The bank should transmit funds by wire to:

ABA #: (number provided by calling toll-free number above)
Credit: Gemini Fund Services, LLC
Account #: (number provided by calling toll-free number above)
Further Credit:
American Real Estate Income Fund
(shareholder registration)
(shareholder account number)

By Wire — Subsequent Investments

Before sending a wire, investors must contact the Administrator to advise them of the intent to wire funds. This will ensure prompt and accurate credit upon receipt of the wire. Wired funds must be received prior to 4:00 p.m. Eastern Time to be eligible for same day pricing. The Fund and its agents, including the transfer agent and custodian, are not responsible for the consequences of delays resulting from the banking or Federal Reserve wire system, or from incomplete wiring instructions.

Automatic Investment Plan — Subsequent Investments

You may participate in the Fund’s Automatic Investment Plan, an investment plan that automatically moves money from your bank account and invests it in the Fund through the use of electronic funds transfers or automatic bank drafts. You may elect to make subsequent investments by transfers of a minimum of $100 on specified days of each month into your established Fund account. Please contact the Fund at 1-866-271-9244 for more information about the Fund’s Automatic Investment Plan.

By Telephone

Investors may purchase additional shares of the Fund by calling 1-866-271-9244. If an investor elected this option on the account application, and the account has been open for at least 15 days, telephone orders will be accepted via electronic funds transfer from your bank account through the Automated Clearing House (ACH) network. Banking information must be established on the account prior to making a purchase. Orders for shares received prior to 4 p.m. Eastern Time will be purchased at the appropriate price calculated on that day.

Telephone trades must be received by or prior to market close. During periods of high market activity, shareholders may encounter higher than usual call waits. Please allow sufficient time to place your telephone transaction.

In compliance with the USA Patriot Act of 2001, the Administrator will verify certain information on each account application as part of the Fund’s Anti-Money Laundering Program. As requested on the application, investors must supply full name, date of birth, social security number and permanent street address. Mailing addresses containing only a P.O. Box will not be accepted. Investors may call GFS at 1-866-271-9244 for additional assistance when completing an application.

If GFS does not have a reasonable belief of the identity of a customer, the account will be rejected or the customer will not be allowed to perform a transaction on the account until such information is received. The

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Fund also may reserve the right to close the account within 5 business days if clarifying information/documentation is not received.

Purchase Terms

The minimum initial purchase by an investor is $2,500 for regular accounts and $1,000 for retirement plan accounts. The Fund’s shares are offered for sale through the Distributor at NAV plus the applicable sales load. The price of the shares during the Fund’s continuous offering will fluctuate over time with the NAV of the shares. Investors in the Fund will pay a sales load based on the amount of their investment in the Fund. The sales load payable by each investor depends upon the amount invested by such investor in the Fund, but may range from 0.00% to 6.00%, as set forth in the table below. A reallowance will be made by the Distributor from the sales load paid by each investor. The sales charge varies, depending on how much you invest. There are no sales charges on reinvested distributions. The Fund reserves the right to waive sales charges. The following sales charges apply to your purchases of shares of the Fund:

Amount Invested		Sales Charge as a % of Offering Price				Sales Charge as a % of Amount Invested				Dealer Reallowance
Under $25,000			6.00	%			6.38	%			5.75	%
$25,000 to $49,999			5.00	%			5.26	%			4.75	%
$50,000 to $99,999			4.00	%			4.17	%			3.75	%
$100,000 to $249,999			3.00	%			3.09	%			2.75	%
$250,000 to $499,999			2.00	%			2.04	%			1.75	%
$500,000 to $999,999			1.00	%			1.01	%			0.75	%
$1,000,000 and above			0.00	%			0.00	%			0.00	%

For illustrative purposes only, the following chart describes the applicable sales loads based on a Fund NAV of $9.40. The reduced purchase price will not affect the net amount received by the Fund.

Amount Invested		Fund’s NAV per Share				Selling Commission per Share in Volume Discount Range				Aggregate Consideration per Share (consisting of purchase price, selling commissions and dealer manager fees) in Volume Discount Range
Under $25,000		$	9.40			$	0.60			$	10.00
$25,000 to $49,999		$	9.40			$	0.49			$	9.89
$50,000 to $99,999		$	9.40			$	0.39			$	9.79
$100,000 to $249,999		$	9.40			$	0.29			$	9.69
$250,000 to $499,999		$	9.40			$	0.19			$	9.59
$500,000 to $999,999		$	9.40			$	0.09			$	9.49
$1,000,000 and above		$	9.40			$	0.00			$	9.40

As shown, investors that purchase $1,000,000 or more of the Fund’s shares will not pay any initial sales charge on the purchase. However, purchases of $1,000,000 or more may be subject to a contingent deferred sales charge (“CDSC”) on shares redeemed during the first 12 months after their purchase in the amount of the commissions paid on those shares redeemed.

You may be able to buy shares without a sales charge (i.e. “load-waived”) when you are:

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In addition, concurrent purchases by related accounts may be combined to determine the application of the sales load. The Fund will combine purchases made by an investor, the investor’s spouse or domestic partner, and dependent children when it calculates the sales load.

It is the investor’s responsibility to determine whether a reduced sales load would apply. The Fund is not responsible for making such determination. To receive a reduced sales load, notification must be provided at the time of the purchase order. If you purchase shares directly from the Fund, you must notify the Fund in writing. Otherwise, notice should be provided to the Financial Intermediary through whom the purchase is made so they can notify the Fund.

Right of Accumulation

For the purposes of determining the applicable reduced sales charge, the right of accumulation allows you to include prior purchases of shares of the Fund as part of your current investment as well as reinvested dividends. To qualify for this option, you must be either:

If you plan to rely on this right of accumulation, you must notify the Distributor at the time of your purchase. You will need to give the Distributor your account numbers. Existing holdings of family members or other related accounts of a shareholder may be combined for purposes of determining eligibility. If applicable, you will need to provide the account numbers of your spouse and your minor children as well as the ages of your minor children.

Letter of Intent

The letter of intent allows you to count all investments within a 13-month period in shares of the Fund as if you were making them all at once for the purposes of calculating the applicable reduced sales charges. The minimum initial investment under a letter of intent is 5% of the total letter of intent amount. The letter of intent does not preclude the Fund from discontinuing sales of its shares. You may include a purchase not originally made pursuant to a letter of intent under a letter of intent entered into within 90 days of the original purchase. To determine the applicable sales charge reduction, you also may include (1) the cost of shares of the Fund which were previously purchased at a price including a front end sales charge during the 90-day period prior to the Distributor receiving the letter of intent, and (2) the historical cost of shares of other Funds you currently own acquired in exchange for shares the Fund purchased during that period at a price including a front-end sales charge. You may combine purchases and exchanges by family members (limited to spouse and children, under the age of 21, living in the same household). You should retain any records necessary to substantiate historical costs because the Fund, the transfer agent and any financial intermediaries may not maintain this information. Shares acquired through reinvestment of dividends are not aggregated to achieve the stated investment goal.

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special tax reporting obligations, maintenance of books and records with respect to the foregoing, and such other information and liaison services as the Fund or the Advisor may reasonably request. Under the Shareholder Services Plan, the Fund may incur expenses on an annual basis equal to an annual rate of 0.25% of the Fund’s average daily net assets.

LEGAL MATTERS

Certain legal matters in connection with the shares will be passed upon for the Fund by Proskauer Rose LLP, Eleven Times Square, New York, NY 10036-8299.

REPORTS TO SHAREHOLDERS

The Fund will send to its shareholders unaudited semi-annual and audited annual reports, including a list of investments held.

Householding

In an effort to decrease costs, the Fund intends to reduce the number of duplicate annual and semi-annual reports by sending only one copy of each to those addresses shared by two or more accounts and to shareholders reasonably believed to be from the same family or household. Once implemented, a shareholder must call 1-866-271-9244 to discontinue householding and request individual copies of these documents. Once the Fund receives notice to stop householding, individual copies will be sent beginning thirty days after receiving your request. This policy does not apply to account statements.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

BBD, LLP is the independent registered public accounting firm for the Fund and will audit the Fund’s financial statements. BBD, LLP is located at 1835 Market Street, 26 ^th Floor, Philadelphia, PA 19103.

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TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION

General Information and History			1
Investment Objective and Policies			1
Management of the Fund			10
Codes of Ethics			17
Proxy Voting Policies and Procedures			17
Control Persons and Principal Holders			17
Investment Advisory and Other Services			17
Portfolio Manager			19
Allocation of Brokerage			20
Tax Status			21
Other Information			24
Independent Registered Public Accounting Firm			25
Financial Statements			F-1

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NOTICE OF PRIVACY POLICY & PRACTICES

Your privacy is important to the Fund. The Fund is committed to maintaining the confidentiality, integrity, and security of your personal information. When you provide personal information, the Fund believes that you should be aware of policies to protect the confidentiality of that information.

The Fund collects the following nonpublic personal information about you:

The Fund does not disclose any nonpublic personal information about its current or former shareholders to affiliated or nonaffiliated third parties, except as permitted by law. For example, the Fund is permitted by law to disclose all of the information it collects, as described above, to its transfer agent to process your transactions. Furthermore, the Fund restricts access to your nonpublic personal information to those persons who require such information to provide products or services to you. The Fund maintains physical, electronic, and procedural safeguards that comply with applicable federal and state standards to guard your nonpublic personal information.

In the event that you hold shares of the Fund through a financial intermediary, including, but not limited to, a broker-dealer, bank, or trust company, the privacy policy of your financial intermediary would govern how your nonpublic personal information would be shared with affiliated or non-affiliated third parties.

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American Real Estate Income Fund
Shares of Beneficial Interest
  
PROSPECTUS
APRIL 9, 2014
  
Investment Advisor
SEL Asset Management, LLC
  
Investment Sub-Advisor
National Fund Advisors, LLC

All dealers that buy, sell or trade the Fund’s shares, whether or not participating in this offering, may be required to deliver a prospectus when acting on behalf of the Fund’s Distributor.

You should rely only on the information contained in or incorporated by reference into this prospectus. The Fund has not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. The Fund is not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted.

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General Information and History			1
Investment Objective and Policies			1
Management of the Fund			10
Codes of Ethics			17
Proxy Voting Policies and Procedures			17
Control Persons and Principal Holders			17
Investment Advisory and Other Services			17
Portfolio Manager			19
Allocation of Brokerage			20
Tax Status			21
Other Information			24
Independent Registered Public Accounting Firm			25
Financial Statements			F-1

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GENERAL INFORMATION AND HISTORY

The Fund is a newly organized, continuously offered, non-diversified, closed-end management investment company that is operated as an interval fund (the “Fund” or the “Trust”). The Fund was organized as a Delaware statutory trust on March 23, 2011 and has no operating history. The Fund’s principal office is located at c/o RCS Advisory Services, LLC, 405 Park Avenue, New York, NY 10022, and its telephone number is 1-212-415-6500. The investment objective and principal investment strategies of the Fund, as well as the principal risks associated with the Fund’s investment strategies, are set forth in “Investment Objective, Policies and Strategies” in the Prospectus. Certain additional investment information is set forth below.

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In addition, the Fund has adopted a fundamental policy that it will make quarterly repurchase offers for no less than for 5% of the shares outstanding at net asset value (“NAV”) less any repurchase fee, unless suspended or postponed in accordance with regulatory requirements, and each repurchase pricing shall occur no later than the close of regular trading on the NYSE on the 14 ^th day after the Repurchase Request Deadline, or the next business day if the 14 ^th is not a business day.

Non-Fundamental Policies

The following are additional investment limitations of the Fund and may be changed by the Fund’s Board of Trustees (the “Board”) without shareholder approval.

If a restriction on the Fund’s investments is adhered to at the time an investment is made, a subsequent change in the percentage of Fund assets invested in certain securities or other instruments, will not be considered a violation of the restriction; provided, however, that the asset coverage requirement applicable to borrowings shall be maintained in the manner contemplated by the 1940 Act, as described above.

Certain Portfolio Securities and Other Operating Policies

The Fund’s investment objective is to generate income, with capital appreciation as a secondary objective. The Fund will pursue this objective through an investment strategy that concentrates on investments in the real estate industry.

Under normal circumstances, the Fund will invest at least 80% of its assets in real estate-related investments, including securities issued by real estate funds that qualify as real estate investment trusts for U.S. Federal tax purposes (“REITs”). Under normal circumstances, it is anticipated that approximately 40% to 60% of the Fund’s assets will be invested in securities of REITs that are not listed on a national securities exchange (“Non-Traded REITs”). Non-Traded REITs are illiquid investments. The remainder of its assets will be invested in other real estate-related investments (including securities of REITs that are listed on a national securities exchange (“Listed REITs”), convertible mortgage bonds and commercial mortgage-backed securities (“CMBSs”)) as well as non-real estate-related investments, cash and cash equivalents. In certain extreme circumstances or market environments the Fund may reduce its investment in real estate-related investments and hold a larger position in cash or cash equivalents and/or deviate from the allocations ranges described in the Prospectus and this SAI. As is always the case, the Fund may not be able to achieve its investment objective in such circumstances. No assurance can be given that any or all investment strategies, or the Fund’s investment program, will be successful.

The Fund’s investment adviser is SEL Asset Management, LLC (the “Advisor”), and its investment sub-advisor is National Fund Advisors, LLC (the “Sub-Advisor”). The Advisor will be responsible for the

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determining the overall allocation of the Fund’s portfolio. The Advisor will retain sole responsibility for managing that portion of the Fund’s portfolio that is invested in Non-Traded REITs, Non-Traded BDCs and other illiquid securities. Responsibility for managing the remaining portion of the Fund’s portfolio, including the Fund’s investments in Listed REITs and CMBSs,will be delegated to the Sub-Advisor. The Sub-Advisor will have no role in determining which Non-Traded REITs or BDCs the Fund will invest in.

Additional information regarding the types of securities and financial instruments the Fund may invest in is set forth below.

Special Investment Techniques

The Fund may use a variety of special investment instruments and techniques to hedge against various risks or other factors and variables that may affect the values of the Fund’s portfolio securities. The Fund’s Advisor and Sub-Advisor currently intend only to sell short securities or take short positions in equity futures contracts to hedge the value of the Fund’s portfolio when the Advisor or Sub-Advisor, as the case may be, believes that equity prices and/or real estate-related security prices are likely to decline, and to write covered call options on its long security positions to generate additional returns. The Fund’s Advisor and Sub-Advisor do not currently intend to engage in naked short sales or other similar speculative securities transactions. However, the Fund may employ different techniques over time, as new instruments and techniques are introduced or as a result of regulatory developments. Some special investment techniques that Fund may use may be considered speculative and involve a high degree of risk, even when used for hedging purposes. A hedging transaction may not perform as anticipated, and the Fund may suffer losses as a result of its hedging activities.

Derivatives

Generally, The Fund may engage in transactions involving options and futures and other derivative financial instruments. Derivatives can be volatile and involve various types and degrees of risk. By using derivatives, the Fund may be permitted to increase or decrease the level of risk, or change the character of the risk, to which the portfolio is exposed.

A small investment in derivatives could have a substantial impact on the Fund’s performance. The market for many derivatives is, or can suddenly become, illiquid. Changes in liquidity may result in significant and rapid changes in the prices for derivatives. If the Fund were to invest in derivatives at an inopportune time, or the Advisor evaluates market conditions incorrectly, the Fund’s derivative investment could negatively impact the Fund’s return, or result in a loss. In addition, the Fund could experience a loss if its derivatives were poorly correlated with its other investments, or if the Fund were unable to liquidate its position because of an illiquid secondary market.

Options and Futures .  The Fund may engage in the use of options and futures contracts, so-called “synthetic” options, including options on baskets of specific securities, or other derivative instruments written by broker-dealers or other financial intermediaries. These transactions may be effected on securities exchanges or on the over-the-counter market, or they may be negotiated directly with counterparties. In cases where instruments are purchased over-the-counter or negotiated directly with counterparties, the Fund is subject to the risk that the counterparty will be unable or unwilling to perform its obligations under the contract. These transactions may also be illiquid and, if so, it might be difficult to close out a position.

The Fund may purchase call and put options on specific securities. The Fund may also write and sell covered or uncovered call options for both hedging purposes and to pursue the Fund’s investment objectives. A put option gives the purchaser of the option the right to sell, and obligates the writer to buy, the underlying security at a stated price at any time before the option expires. Similarly, a call option gives the purchaser of the option the right to buy, and obligates the writer to sell, the underlying security at a stated price at any time before the option expires.

In a covered call option, the Fund owns the underlying security. The sale of such an option exposes the Fund to a potential loss of opportunity to realize appreciation in the market price of the underlying security during the term of the option. Using covered call options might expose the Fund to other risks, as well. For example, the Fund might be required to continue holding a security that the Fund might otherwise have sold to protect against depreciation in the market price of the security.

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When writing options, the Fund may close its position by purchasing an option on the same security with the same exercise price and expiration date as the option that it has previously written on the security. If the amount paid to purchase an option is less or more than the amount received from the sale, the Fund will, accordingly, realize a profit or loss. To close out a position as a purchaser of an option, the Fund would liquidate the position by selling the option previously purchased.

The use of derivatives that are subject to regulation by the Commodity Futures Trading Commission (the “CFTC”) by the Fund could cause the Fund to be a commodity pool, which would require the Fund to comply with certain rules of the CFTC. However, the Fund intends to conduct its operations so as to avoid regulation as a commodity pool. The CFTC provides that a registered investment company, such as the Fund, may be excluded from regulation if either the “percentage-of-margin” or “net notional” test are met. The “percentage-of-margin” test requires that the Fund limit its trading, such that aggregate initial margin and premiums required to establish commodity futures, options on futures, or commodity swap positions do not exceed 5% of the liquidation value of its portfolio, including unrealized profits and losses. This test does not apply to transactions entered into for “bona fide hedging purposes” and excludes from the calculation any portion of an option that is in-the-money at the time of purchase. The “net notional” test requires that the aggregate net notional value of the Fund’s commodities-related trading positions not used for bona fide hedging purposes, determined at the time its most recent position was established, does not exceed 100% of the liquidation value of its portfolio, including unrealized profits and losses. The term notional value is defined by asset class (e.g., different definitions apply to futures and swaps), as is the ability to net positions. In connection with its management of the Fund, the Advisor has claimed such an exclusion from registration as a commodity pool operator under the Commodity Exchange Act (the “CEA”). Therefore, as long as either the “percentage-of-margin” or “net notional” test is met, the Advisor will not be subject to the registration and regulatory requirements of the CEA; however, if the Fund should no longer satisfy either test in the future, registration will be required.

Successful use of futures is also subject to the Advisor’s ability to correctly predict movements in the relevant market. To the extent that a transaction is entered into for hedging purposes, successful use is also subject to the Advisor’s ability to evaluate the appropriate correlation between the transaction being hedged and the price movements of the futures contract.

The Fund may also purchase and sell stock index futures contracts. A stock index futures contract obligates the Fund to pay or receive an amount of cash equal to a fixed dollar amount specified in the futures contract, multiplied by the difference between the settlement price of the contract on the contract’s last trading day, and the value of the index based on the stock prices of the securities that comprise it at the opening of trading in those securities on the next business day. The Fund may purchase and sell interest rate futures contracts, which represent obligations to purchase or sell an amount of a specific debt security at a future date at a specific price.

Options on Securities Indexes .  The Fund may purchase and sell call and purchase put options on stock indexes listed on national securities exchanges or traded on the over-the-counter market for hedging or speculative purposes. A stock index fluctuates with changes in the market values of the stocks included in the index. Accordingly, successful use of options on stock indexes will be subject to the Advisor’s ability to correctly evaluate movements in the stock market generally, or of a particular industry or market segment.

Swap Agreements .  The Fund may enter into a variety of swap agreements, including equity, interest rate, and index swap agreements. The Fund is not limited to any particular form of swap agreement if the Advisor determines that other forms are consistent with the Fund’s investment objectives and policies. However, the Fund does not intend to enter into credit default or total return swaps.

Swap agreements are contracts entered into by two parties (primarily institutional investors) for periods ranging from a few weeks to more than a year. In a standard swap transaction, the parties agree to exchange the returns (or differentials in rates of return) earned or realized on particular predetermined investments or instruments, which may be adjusted for an interest factor. The gross returns to be exchanged or “swapped” between the parties are generally calculated with respect to a “notional amount,” i.e ., the return on or increase in value of a particular dollar amount invested at a particular interest rate, in a particular foreign currency, or in a “basket” of securities representing a particular index. Additional forms of swap agreements include (i)

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interest rate caps, under which, in return for a premium, one party agrees to make payments to the other to the extent interest rates exceed a specified rate or “cap;” (ii) interest rate floors, under which, in return for a premium, one party agrees to make payments to the other to the extent interest rates fall below a specified level or “floor;” and (iii) interest rate collars, under which a party sells a cap and purchases a floor (or vice versa) in an attempt to protect itself against interest rate movements exceeding certain minimum or maximum levels.

Generally, the Fund’s obligations (or rights) under a swap agreement will be equal only to the net amount to be paid or received under the agreement, based on the relative values of the positions held by the parties. The risk of loss is limited to the net amount of interest payments that a party is contractually required to make. As such, if the counterparty to a swap defaults, the Fund’s risk of loss consists of the net amount of payments that it is entitled to receive.

Money Market Instruments

The Fund may invest, for defensive purposes or otherwise, some or all of their assets in high quality fixed-income securities, money market instruments and money market mutual funds, or hold cash or cash equivalents in such amounts as the Advisor deems appropriate under the circumstances. In addition, the Fund may invest in these instruments pending allocation of its respective offering proceeds. Money market instruments are high quality, short-term fixed-income obligations, which generally have remaining maturities of one year or less and may include U.S. Government securities, commercial paper, certificates of deposit and bankers’ acceptances issued by domestic branches of U.S. banks that are members of the Federal Deposit Insurance Corporation (“FDIC”), and repurchase agreements.

When-Issued, Delayed Delivery and Forward Commitment Securities

To reduce the risk of changes in securities prices and interest rates, the Fund may purchase securities on a forward commitment, when-issued or delayed delivery basis. This means that delivery and payment occur a number of days after the date of the commitment to purchase. The payment obligation and the interest rate receivable with respect to such purchases are determined when the Fund enters into the commitment, but the Fund does not make payment until it receives delivery from the counterparty. The Fund may, if it is deemed advisable, sell the securities after it commits to a purchase but before delivery and settlement takes place.

Securities purchased on a forward commitment, when-issued or delayed delivery basis are subject to changes in value based upon the public’s perception of the creditworthiness of the issuer and changes (either real or anticipated) in the level of interest rates. Purchasing securities on a when-issued or delayed delivery basis can present the risk that the yield available in the market when the delivery takes place may be higher than that obtained in the transaction itself. Purchasing securities on a forward commitment, when-issued or delayed delivery basis when the Fund is fully, or almost fully invested, results in a form of leverage and may cause greater fluctuation in the value of the net assets of the Fund. In addition, there is a risk that securities purchased on a when-issued or delayed delivery basis may not be delivered, and that the purchaser of securities sold by the Fund on a forward basis will not honor its purchase obligation. In such cases, the Fund may incur a loss.

REPURCHASES AND TRANSFERS OF SHARES

Repurchase Offers

The Board has adopted a resolution setting forth the Fund’s fundamental policy that it will conduct quarterly repurchase offers (the “Repurchase Offer Policy”). The Repurchase Offer Policy sets the interval between each repurchase offer at one quarter and provides that the Fund shall conduct a repurchase offer each quarter (unless suspended or postponed in accordance with regulatory requirements). The Repurchase Offer Policy also provides that the repurchase pricing shall occur not later than the close of regular trading on the New York Stock Exchange (the “NYSE”) on the 14 ^th day after the Repurchase Request Deadline or the next business day if the 14 ^th day is not a business day. The Fund’s Repurchase Offer Policy is fundamental and cannot be changed without shareholder approval. The Fund may, for the purpose of paying for repurchased shares, be required to liquidate portfolio holdings earlier than the Advisor would otherwise have liquidated these holdings. Such liquidations may result in losses, and may increase the Fund’s portfolio turnover.

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Repurchase Offer Policy Summary of Terms

The Fund may not condition a repurchase offer upon the tender of any minimum amount of shares. The Fund may deduct from the repurchase proceeds only a repurchase fee that is paid to the Fund and that is reasonably intended to compensate the Fund for expenses directly related to the repurchase. The repurchase fee may not exceed 2% of the proceeds. Generally, the Fund does not charge a repurchase fee. However, for shares held less than 91 days, the Fund will deduct a 2% redemption fee on the redemption amount if shares are sold pursuant to the Fund’s quarterly repurchase program. Shares held longest will be treated as being repurchased first and shares held shortest as being repurchased last. The redemption fee does not apply to shares that were acquired through reinvestment of distributions. Shares held for 91 days or more are not subject to the 2% fee. Redemption fees are paid to the Fund directly and are designed to offset costs associated with fluctuations in Fund asset levels and cash flow caused by short-term shareholder trading.

Procedures:   All periodic repurchase offers must comply with the following procedures:

Repurchase Offer Amount :  Each quarter, the Fund may offer to repurchase at least 5% of the outstanding shares of the Fund on the Repurchase Request Deadline (the “Repurchase Offer Amount”). The Fund may increase the size of the Repurchase Offer Amount to up to 25% of the Fund’s outstanding shares, in the sole discretion of the Board, but it is not expected that the Board will do so.

Shareholder Notification :  Thirty days before each Repurchase Request Deadline, the Fund shall send to each shareholder of record and to each beneficial owner of the shares that are the subject of the repurchase offer a notification (the “Shareholder Notification”) providing the following information:

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The Fund must file Form N-23c-3 (the “Notification of Repurchase Offer”) and three copies of the Shareholder Notification with the U.S. Securities and Exchange Commission (the “SEC”) within three business days after sending the Notification to Shareholders.

Notification of Beneficial Owners :  Where the Fund knows that shares subject of a repurchase offer are held of record by a broker, dealer, voting trustee, bank, association or other entity that exercises fiduciary powers in nominee name or otherwise, the Fund must follow the procedures for transmitting materials to beneficial owners of securities that are set forth in Rule 14a-13 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Repurchase Requests :  Repurchase requests must be submitted by shareholders on or prior to the Repurchase Request Deadline. The Fund shall permit repurchase requests to be withdrawn or modified at any time prior to the Repurchase Request Deadline, but shall not permit repurchase requests to be withdrawn or modified after the Repurchase Request Deadline.

Repurchase Requests in Excess of the Repurchase Offer Amount :  If shareholders tender more than the Repurchase Offer Amount, the Fund may, but is not required to, repurchase an additional amount of shares not to exceed 2% of the outstanding shares of the Fund as of the Repurchase Request Deadline. If the Fund determines not to repurchase more than the Repurchase Offer Amount, or if shareholders tender shares in an amount exceeding the Repurchase Offer Amount plus 2% of the outstanding shares as of the Repurchase Request Deadline, the Fund shall repurchase the shares tendered on a pro rata basis. This policy, however, does not prohibit the Fund from:

Suspension or Postponement of Repurchase Offers :  The Fund shall not suspend or postpone a repurchase offer except pursuant to a vote of a majority of the Board, including a majority of the trustees who are not interested persons of the Fund, and only:

If a repurchase offer is suspended or postponed, the Fund shall provide notice to shareholders of such suspension or postponement. If the Fund renews the repurchase offer, the Fund shall send a new Shareholder Notification to shareholders.

Computing Net Asset Value :  The Fund’s current NAV per share is determined daily, at such specific time or times during the day as set by the Board, as described in “Determination of Net Asset Value” in the Prospectus. The Fund’s NAV need not be calculated on:

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Liquidity Requirements :  From the time the Fund sends a Shareholder Notification to shareholders until the Repurchase Pricing Date, a percentage of the Fund’s assets equal to at least 100% of the Repurchase Offer Amount (the “Liquidity Amount”) shall consist of assets that can be sold or disposed of in the ordinary course of business, at approximately the price at which the Fund has valued the investment, within a period equal to the period between a Repurchase Request Deadline and the Repurchase Payment Deadline, or of assets that mature by the next Repurchase Payment Deadline. The Board has adopted procedures that are reasonably designed to ensure that the Fund’s assets are sufficiently liquid so that the Fund can comply with the repurchase offer and the liquidity requirements described in this paragraph. In the event that the Fund’s assets fail to comply with this requirement, the Board shall cause the Fund to take such action as it deems appropriate to ensure compliance.

Liquidity Policy :  The Board may delegate day-to-day responsibility for evaluating liquidity of specific assets to the Advisor, but shall continue to be responsible for monitoring the Advisor’s performance of its duties and the composition of the portfolio. Accordingly, the Board has approved this policy that is reasonably designed to ensure that the Fund’s portfolio assets are sufficiently liquid so that the Fund can comply with its fundamental policy on repurchases and comply with the liquidity requirements in the preceding paragraph.

Registration Statement Disclosure :  The Fund’s registration statement must disclose its intention to make or consider making such repurchase offers.

Annual Report Disclosure :  The Fund shall include in its annual report to shareholders the following:

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Advertising :  The Fund, or any underwriter for the Fund, must comply, as if the Fund were an open end company, with the provisions of Section 24(b) of the 1940 Act and the rules thereunder and file, if necessary, with FINRA or the SEC any advertisement, pamphlet, circular, form letter, or other sales literature addressed to or intended for distribution to prospective investors.

Involuntary Repurchases

The Fund may, at any time, repurchase at net asset value shares held by a shareholder, or any person acquiring shares from or through a shareholder, if: the shares have been transferred or have vested in any person other than by operation of law as the result of the death, dissolution, bankruptcy or incompetency of a shareholder; ownership of the shares by the shareholder or other person will cause the Fund to be in violation of, or require registration of the shares, or subject the Fund to additional registration or regulation under, the securities, commodities or other laws of the United States or any other relevant jurisdiction; continued ownership of the shares may be harmful or injurious to the business or reputation of the Fund or may subject the Fund or any shareholders to an undue risk of adverse tax or other fiscal consequences; the shareholder owns shares having an aggregate net asset value less than an amount determined from time to time by the trustees; or it would be in the interests of the Fund, as determined by the Board, for the Fund to repurchase the Shares. The Advisor may tender for repurchase in connection with any repurchase offer made by the Fund Shares that it holds in its capacity as a shareholder.

Transfers of Shares

No person may become a substituted shareholder without the written consent of the Board, which consent may be withheld for any reason in the Board’s sole and absolute discretion. Shares may be transferred only (i) by operation of law pursuant to the death, bankruptcy, insolvency or dissolution of a shareholder or (ii) with the written consent of the Board, which may be withheld in its sole and absolute discretion. The Board may, in its discretion, delegate to the Advisor its authority to consent to transfers of shares. Each shareholder and transferee is required to pay all expenses, including attorneys and accountants fees, incurred by the Fund in connection with such transfer.

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Trustees

Following is a list of the trustees of the Trust and their principal occupation over the last five years.

Independent Trustees

Name, Address* and Age		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
Mark Auerbach Age 75		Trustee Since May 2012		Independent director of a number of companies in the biotech industry		1		RCS Capital Corporation; Optimer Pharmaceuticals; Ventrus Bioscience, Inc.; Neuro-Hitech, Inc.; Collexis; RxElite Holdings, Inc.
Robin A. Ferracone Age 60		Trustee Since May 2012		Chief Executive Officer, Farient Advisors, LLC (May 2007 to present).		1		American Realty Capital Trust V, Inc.; American Realty Capital Daily Net Asset Value Trust, Inc.; American Realty Capital Properties, Inc.
Stanley R. Perla Age 70		Trustee Since May 2012		Certified Public Accountant (“CPA”) and Practice Development, Friedman LLP (May 2012 to present); CPA and Practice Development, Cornerstone Accounting Group, LLP (June 2011 to May 2012); CPA and Managing Partner, Cornerstone Accounting Group, LLP (June 2008 to May 2011); CPA and Director of Internal Audit, Vornado Realty Trust (July 2003 to May 2008).		1		American Realty Hospitality Trust, Inc.; American Realty Capital Trust V, Inc.; American Realty Capital Daily Net Asset Value Trust, Inc.; Madison Harbor Balanced Strategies, Inc.; American Mortgage Acceptance Company; GTJ REIT, Inc.

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Interested Trustee

Name, Address* and Age		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
William M. Kahane **** Age 65		Trustee and Chairman since May 2012		Chief Executive Officer of RCS Capital Corporation; CEO, President and Chief Operating Officer of American Realty Capital Trust, Inc.; Chief Executive Officer and President of American Realty Capital Hospitality Trust, Inc.		1		RCS Capital Corporation; American Realty Capital Trust III, Inc. Phillips Edison – ARC Shopping Center REIT Inc.; American Realty Capital New York Recovery REIT, Inc.; American Realty Capital Trust, Inc.; American Realty Capital – Retail Centers of America, Inc.; American Realty Capital Healthcare Trust, Inc.; American Realty Capital Daily New Asset Value Trust, Inc.; American Realty Capital Properties, Inc.; American Realty Capital Healthcare Trust II, Inc.; Phillips Edison – ARC Grocery Center REIT II, Inc.; Business Development Corporation of America

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The Board believes that, collectively, the Trustees have balanced and diverse experience, qualifications, attributes, and skills, which allows the Board to operate effectively in governing the Trust and protecting the interests of shareholders. Below is a description of the various experience, qualifications, attributes and/or skills with respect to each Trustee considered by the Board:

Mark Auerbach

Over the last 18 years, Mr. Auerbach had served as directors for several companies. He currently serves as an independent director of the RCS Capital Corporation, an entity under common ownership with ARC and the indirect owner of all of the outstanding voting membership interests in of the Distributor, the Administrator and the Transfer Agent, and as a director of Ventrus Bioscience, Inc., a development stage specialty pharmaceutical company focused on the development of late-stage prescription drugs for gastrointestinal disorders, specifically, hemorrhoids, anal fissures and fecal incontinence. Since June 2005, Mr. Auerbach has also served as a director of Optimer Pharmaceuticals, Inc. and as its lead independent director since February 2013. From January 2006 through March 2010, Mr. Auerbach served as the Chairman of the Board of Directors for Neuro-Hitech, Inc., an early-stage pharmaceutical company which specialized in brain degenerative diseases. From June 2007 through August 2009, he served as a director for Collexis, a company which develops knowledge management and discovery software. From July 2007 through February 2009, Mr. Auerbach also served as director for RxElite Holdings, Inc., a company which develops, manufactures and markets generic prescription drug products in specialty generic markets. From September 2003 through October 2006, Mr. Auerbach served as Executive Chairman of the Board of Directors for Par Pharmaceutical Companies, Inc., principally a manufacturer and marketer of generic pharmaceuticals and the parent of Par Pharmaceutical, Inc. From 1993 to 2005, Mr. Auerbach served as Chief Financial Officer of Central Lewmar LLP, a national fine paper distributor. Mr. Auerbach received a B.S. degree in accounting from Rider University. The Fund believes Mr. Auerbach's previous experience as a member of the board of directors of Optimer Pharmaceuticals, Neuro-Hitech, Inc., Collexis, RxElite Holdings, Inc., and Par Pharmaceutical, Inc., his current experience as a member of the board of directors of Ventrus Bioscience, Inc. and his previous experience as an officer of Central Lewmar LLP, make him well qualified to serve on the Fund's Board of Trustees.

Robin A. Ferracone

Ms. Ferracone is the founder and Chief Executive Officer of Farient Advisors LLC, an independent executive compensation and performance consulting firm, since May 2007. She also currently serves as an independent director of American Realty Capital Daily Net Asset Value Trust, Inc., a Non-Traded REIT sponsored by ARC. Ms. Ferracone also served as an independent director of American Realty Capital Properties, Inc. from October 2012 to February 2013 and as an independent director of American Realty Capital Trust V, Inc. from January 2013 to April 2013. From January 2005 until April 2007, Ms. Ferracone was President of the Human Capital business of Mercer, a business that included talent and compensation consulting, software and data services globally. Prior to that, Ms. Ferracone was Chairman of the U.S. West Region for Mercer's parent company, Marsh & Mclennan Companies, and market leader and Worldwide Partner at Mercer. Before October 2001, Ms. Ferracone was President and Chairman of SCA Consulting, a firm she co-founded in 1985 and sold to Mercer in 2001, and a strategy consultant at Booz Allen & Hamilton. Ms. Ferracone is the author of Fair Pay, Fair Play: Aligning Executive Performance and Pay (Jossey-Bass, 2010). She also contributes to numerous prominent publications including a blog for Forbes.com, and articles for Directorship, National Association of Corporate Directors, and Corporate Board Member. In 2011 and 2012, Ms. Ferracone was named to the Directorship 100, a list of the most influential people in the Boardroom. Ms. Ferracone is a member of the Duke University Board of Trustees, World Presidents' Organization, The Committee of 200, and the International Women's Forum. She also is on the board of PayScale, Inc., a venture-backed company. Ms. Ferracone earned an MBA from the Harvard Business School, where she was a Baker Scholar and a B.A. summa cum laude in Management Science and Economics from Duke University, where she was elected to Phi Beta Kappa. The Fund believes that Ms. Ferracone's experience as an independent director of various Non-Traded REITs sponsored by ARC and her extensive corporate governance and executive compensation consulting experience, make her well qualified to serve as a member of the Fund's Board of Trustees.

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William M. Kahane

Mr. Kahane has served as Chief Executive Officer of RCS Capital Corporation since February 2013. Mr. Kahane, along with Mr. Nicholas S. Schorsch, is a co-founder of ARC. Beginning with its formation in August 2007, Mr. Kahane served exclusively as President and Chief Operating Officer of American Realty Capital Trust (“ARCT”), focusing on the assemblage, capitalization and management of its real estate portfolio and became its CEO and Director in March 2012. Mr. Kahane also serves as a Director of ARCP. He has held board positions and served as an executive officer for a number of the Non-Traded REITs currently sponsored by ARC. Mr. Kahane has been active in the structuring and financial management of commercial real estate investments for close to 40 years. He began his career in 1974 as a real estate lawyer, practicing in both the public and private sectors. From 1981 to 1992, Mr. Kahane was in the investment banking department of Morgan Stanley, specializing in real estate where he became a managing director in 1989. From 1997 until 2005, Mr. Kahane was on the Board of Directors of Catellus Development Corp (NYSE: CDX), and served as non-executive chairman from 1999 to 2001. From 2003 to 2006, Mr. Kahane was a trustee at AFRT, during which time Mr. Kahane served as Chairman of the Finance Committee of AFRT’s Board of Trustees. Mr. Kahane received a B.A. from Occidental College, a J.D. from the University of California Los Angeles Law School, and an MBA from Stanford University’s Graduate School of Business. He is a member of the Board of Trustees of Temple Emanu-El in New York City. The Fund believes that Mr. Kahane's current positions as Chief Executive Officer of RCS Capital Corporation and as directors and/or executive officers of various REITs, as well as his close to 40 years of experience in the structuring and financial management of commercial real estate investments makes him well qualified to serve on the Fund's Board of Trustees.

Stanley R. Perla

Mr. Perla, a licensed certified public accountant, was with the firm of Ernst & Young LLP for 35 years, from September 1967 to June 2003, the last 25 of which he was a partner. He currently serves as an independent director of American Realty Hospitality Trust, Inc., and American Realty Capital Trust V, Inc., both of which are Non-Traded REITs sponsored by ARC. Mr. Perla also serves as an independent director and as Chairman of the Audit Committee for GTT REIT, Inc. Mr. Perla served as an independent director of American Realty Capital Daily Net Asset Value Trust, Inc. from March 2012 until April 2013. From July 2003 to May 2008, he was the director of Internal Audit for Vornado Realty Trust and from June 2008 to May 2011, he was the managing partner of Cornerstone Accounting Group, a public accounting firm specializing in the real estate industry and a consultant to them from June 2011 to March 2012. Since May 2012, Mr. Perla has provided consulting services to Friedman LLP, a public accounting firm. His area of expertise for the past 40 years was real estate, and he was also responsible for the auditing of public and private companies. Mr. Perla served as Ernst & Young’s national director of real estate accounting, as well as on Ernst & Young’s national accounting and auditing committee. He is an active member of the National Association of Real Estate Investment Trusts and the National Association of Real Estate Companies. In addition, Mr. Perla has been a frequent speaker on real estate accounting issues at numerous real estate conferences. He currently serves as a member of the board of directors and the chair of the audit committee of Madison Harbor Balanced Strategies, Inc. since January 2004 and previously for American Mortgage Acceptance Company from January 2004 to April 2010 and Lexington Realty Trust from August 2003 to November 2006. Mr. Perla earned an M.B.A. in Taxation and a B.B.A. in Accounting from Baruch College. The Fund believes that Mr. Perla's extensive experience as the director of Internal Audit at Vornado Realty Trust, as a managing partner of Cornerstone Accounting Group, his prior experience as an independent director of ARC DNAV and his over 40 years of experience in real estate, make him well qualified to serve as a member of the Fund's Board of Trustees.

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Officers

Following is a list of executive officers of the Trust and their principal occupation over the last five years.

Name, Address* and Age		Position/Term of Office**		Principal Occupation During the Past Five Years
John H. Grady Age 52		President, Treasurer and Secretary		President, National Fund Advisors, LLC (Oct 2012 – present); President, American National Stock Transfer, LLC (Oct 2012 – present); Chief Operating Officer, Realty Capital Services (Oct 2012 – present); General Counsel and Chief Operating Officer, Steben & Company (Dec 2009 – Sept 2012). Senior Adviser, Coil Investment Group (a broker-dealer holding company) (April 2008 – Dec 2009)
Mark Painter Age 31		Vice President		Portfolio Manager, SEL Asset Management, LLC (Feb 2014 to present); Portfolio Manager, Stanley Laman Group, Ltd (July 2004 – present).
Christopher Pike Age 45		Vice-President		Vice President and Chief Investment Officer, National Fund Advisors, LLC (May 2012 – present); Director of Investment Research, American Realty Capital and Realty Capital Securities (Aug 2011 – May 2012); Equity Research Analyst, Fagenson & Company, Inc. (Dec 2009 – Aug 2011); Equity Research Analyst, Merrill Lynch (Mar 2006 – Dec 2008).
Gerard Scarpati Age 58		Chief Financial Officer		Director, Vigilant Compliance, LLC (an investment management services company) from February 2010 to present; Consultant to investment industry from August 2004 to February 2010.
Robert Amweg Age 60		Chief Compliance Officer		Compliance Director, Vigilant Compliance, LLC (an investment management services company) from August 2013 to present; Consultant to financial services industry from September 2012 to present; and Chief Financial Officer and Chief Accounting Officer, Turner Investment from February 2007 to August 2012.

Board Committees

Audit Committee :  The Board has an Audit Committee that consists of the trustees who are not “interested persons” (as defined under the 1940 Act) of the Trust and the Advisor (the “Independent Trustees”). The Audit Committee’s responsibilities include: (i) recommending to the Board the selection, retention or termination of the Trust’s independent auditors; (ii) reviewing with the independent auditors the scope, performance and anticipated cost of their audit; (iii) discussing with the independent auditors certain matters relating to the Trust’s financial statements, including any adjustment to such financial statements recommended by such independent auditors, or any other results of any audit; (iv) reviewing on a periodic

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basis a formal written statement from the independent auditors with respect to their independence, discussing with the independent auditors any relationships or services disclosed in the statement that may impact the objectivity and independence of the Trust’s independent auditors and recommending that the Board take appropriate action in response thereto to satisfy itself of the auditor’s independence; and (v) considering the comments of the independent auditors and management’s responses thereto with respect to the quality and adequacy of the Trust’s accounting and financial reporting policies and practices and internal controls. The Audit Committee operates pursuant to an Audit Committee Charter. The Audit Committee is responsible for seeking and reviewing nominee candidates for consideration as Independent Trustees as is from time to time considered necessary or appropriate. The Audit Committee generally will consider shareholder nominees to the extent required pursuant to rules under the Exchange Act. The Audit Committee is also responsible for reviewing and setting Independent Trustee compensation from time to time when considered necessary or appropriate. As of the date of this SAI, the Audit Committee has held two meetings.

Trustee Ownership :  The following table indicates the dollar range of equity securities that each Trustee beneficially owned in the Fund as of the date of this SAI.

Independent Trustees

Name of Trustee		Dollar Range of Equity Securities in the Fund		Aggregate Dollar Range of Equity Securities in All Registered Investment Companies Overseen by Trustee in Family of Investment Companies
Mark Auerbach		None		None
Robin A. Ferracone		None		None
Stanley R. Perla		None		None

Interested Trustee

Name of Trustee		Dollar Range of Equity Securities in the Fund		Aggregate Dollar Range of Equity Securities in All Registered Investment Companies Overseen by Trustee in Family of Investment Companies
William M. Kahane		$50,001 – $100,000		$50,001 – $100,000

Compensation

Each Independent Trustee will receive a retainer of $30,000 per year, plus $2,000 for each board or board committee meeting the trustee attends in person ($2,500 for attendance by the chairperson of the audit committee at each meeting of the audit committee), $750 for each meeting the trustee attends virtually and $1,500 for each meeting the trustee attends by telephone. If there is a meeting of the Board and one or more committees in a single day, the fees will be limited to $2,500 per day ($3,000 for the chairperson of the audit committee if there is a meeting of such committee). Neither Mr. Kahane nor any of the executive officers receive compensation from the Trust.

The table below details the amount of compensation the trustees are expected to receive from the Fund during the fiscal period ended December 31, 2014. The Trust does not have a bonus, profit sharing, pension or retirement plan.

Name and Position		Aggregate Compensation From Fund		Pension or Retirement Benefits Accrued as Part of Fund Expenses		Estimated Annual Benefits Upon Retirement		Total Compensation From Fund and Fund Complex Paid to Directors
Mark Auerbach		$ 43,500		None		None		$43,500
Robin A. Ferracone		$43,500		None		None		$43,500
Stanley Perla		$46,500		None		None		$46,500

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Investment Advisers Act of 1940, as amended. The Advisor is a Delaware limited liability company formed in November 2012 for the purpose of advising the Fund. The Advisor commenced operations in February 2014. The Advisor was formed for the purpose of providing investment management services to registered investment vehicles. The Fund is the Advisor’s first initiative in the closed end fund marketplace. As such, the Advisor currently has no assets under management. Neither the Advisor nor its controlling persons have previously advised a registered investment company. James J. Laman and Bradford W. Stanley are the Managing Members of the Advisor. Mr. Laman also serves as the Advisor’s Chief Compliance Officer. The Advisor’s principals own and/or manage several businesses and professional firms, including The Stanley Laman Group and the Laman Law Firm.

Under the general supervision of the Fund’s Board, the Advisor will carry out the investment and reinvestment of the net assets of the Fund, furnish a continuous investment program with respect to the Fund, and determine which securities should be purchased, sold or exchanged. In particular, the Advisor will be responsible for the determining the overall allocation of the Fund’s portfolio. The Advisor will retain sole responsibility for managing that portion of the Fund’s portfolio that is invested in Non-Traded REITs, Non-Traded BDCs and other illiquid securities. Responsibility for managing the remaining portion of the Fund’s portfolio, including the Fund’sinvestments in Listed REITs, CMBSs and other liquid securities, will be delegated to the Sub-Advisor. The Advisor will compensate all Advisor personnel who provide services to the Fund. In return for these services, facilities and payments, the Fund has agreed to pay the Advisor as compensation under the Management Agreement a monthly management fee computed at the annual rate of 1.10% of the Fund’s average daily net assets. The Advisor may employ research services and service providers to assist in the Advisor’s market analysis and investment selection.

A discussion regarding the basis for the Board’s initial approval of the Fund’s Investment Management Agreement will be available in the Fund’s initial report to shareholders.

The Advisor and the Fund have entered into an expense limitation and reimbursement agreement (the “Expense Limitation Agreement”) under which the Advisor has agreed contractually to waive its fees and to pay or absorb the ordinary operating expenses of the Fund (including offering and organizational expenses, but excluding interest, brokerage commissions, acquired fund fees and expenses, and extraordinary expenses), to the extent that they exceed 2.50% per annum of the Fund’s average daily net assets (the “Expense Limitation”). 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 waived and Fund expenses paid or absorbed. Any waiver or reimbursement of fees by the Advisor is subject to repayment by the Fund within the three fiscal years following the fiscal year in which such waiver or reimbursement occurred; provided, however, that (i) the Fund is able to make such repayment without exceeding the Expense Limitation in place at the time the fees being repaid were waived, and (ii) such repayment is approved by the Board. The Expense Limitation Agreement will remain in effect for at least a one-year term, unless and until the Board approves its modification or termination. The Expense Limitation Agreement may be terminated only by the Fund’s Board on 60 days written notice to the Advisor. After the initial one-year term, the Expense Limitation Agreement may be renewed at the Advisor’s and Board’s discretion.

The Sub-Advisor

National Fund Advisors, LLC, located at 405 Park Avenue, New York, NY 10022, serves as the Fund’s investment sub-advisor. The Sub-Advisor is registered with the SEC as an investment advisor under the Investment Advisers Act of 1940, as amended. The Sub-Advisor is a Delaware limited liability company formed in June 2011 for the purpose of providing investment management services to registered investment vehicles. The Sub-Advisor commenced operations in June 2013. As of December 31, 2014, the Sub-Advisor had approximately $135 million in assets under management. The Sub-Advisor currently manages one open-end mutual fund, which focuses on investments in the real estate industry. As of December 31, 2013, that fund had approximately $28 million in assets under management. The Fund is the Advisor’s first initiative in the closed end fund marketplace. The Sub-Advisor is a wholly-owned subsidiary of ARC. John H, Grady and Christopher Pike are the President and Chief Investment Officer of the Sub-Advisor, respectively. Mr. Grady also serves as the Sub-Adviser’s Chief Compliance Officers.

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Under the supervision of the Advisor, the Sub-Advisor will manage that portion of the Fund’s portfolio allocated to the Sub-Advisor by the Advisor for investment in publicly-traded securities and other liquid investments (including Listed REITs, convertible mortgage bonds and CMBSs). The Sub-Advisor will have no role in determining which Non-Traded REITs or BDCs the Fund will invest in. The Sub-Advisor will compensate all Sub-Advisor personnel who provide services to the Fund. In return for these services, facilities and payments, the Advisor has agreed to pay the Sub-Advisor as compensation under the Sub-Advisory Agreement a monthly fee at the annual rate of 1.00% of the Fund’s daily net asset value attributable to that portion of the Fund’s portfolio that has been allocated to the Sub-Advisor by the Advisor. The Sub-Advisor’s fee will be paid by the Advisor out of the fee the Advisor receives from the Fund, and will not impact the Fund’s expenses. The Sub-Advisor may employ research services and service providers to assist in the Sub-Advisor’s market analysis and investment selection.

Participation in Investment Opportunities

Directors, principals, officers, employees and affiliates of the Advisor may, subject to the Ethics Codes, buy and sell securities or other investments for their own accounts and may have actual or potential conflicts of interest with respect to investments made on behalf of the Fund. As a result of differing trading and investment strategies or constraints, positions may be taken by directors, principals, officers, employees and affiliates of the Advisor, or by the Advisor for the Advisor accounts, if any, that are the same as, different from or made at a different time than, positions taken for the Fund.

PORTFOLIO MANAGER

Mark Painter serves as a Portfolio Manager of the Fund’s, with primary responsibility for overseeing the overall allocation of the Fund’s portfolio and for managing the portion of the Fund’s portfolio not allocated to the Sub-Advisor. Christopher Pike also serves as a portfolio manager of the Fund and has primary responsibility for managing the portion of the Fund’s investment portfolio allocated to the Sub-Advisor by the Advisor.

Mark Painter is a Portfolio Manager at the Advisor. Mr. Painter receives a salary, retirement plan benefits and discretionary bonus from the Advisor. Because the portfolio manager may manage assets for other pooled investment vehicles and/or other accounts (including institutional clients, pension plans and certain high net worth individuals) (collectively, the “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 or its affiliates 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 the date of this SAI, Mr. Painter owned no Fund shares.

In addition to serving as the portfolio manager of the Fund, Mr. Painter has been the co-manager of five private funds advised by the Stanley Laman Group: SLG High Growth and Fixed Income since February of 2005, SLG High Dividend and Value since February 2010, SLG Micro-Cap since December 2010, SLG International Opportunities LP since February 2012, and SLG Risk Managed since March 2013.

Other Accounts by Type		Total Number of Accounts by Account Types				Total Assets by Account Type				Number of Accounts by Types Subject to a Performance Fee				Total Assets by Account Types Subject to a Performance Fee
Registered Investment Companies
Other Pooled Investment Vehicles			1				70,000,000				0				0
Other Accounts			800				600,000,000				0				0

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Christopher Pike, the Chief Investment Officer of the Sub-Advisor, is one of the Fund’s portfolio managers. Mr. Pike is a Vice President of the Sub-Advisor and has primary responsibility for management of the publicly-traded liquid portion of the Fund’s investment portfolio. Mr. Pike receives a salary, retirement plan benefits and discretionary bonus from the Sub-Advisor. Because the portfolio manager may manage assets for other pooled investment vehicles and/or other accounts (including institutional clients, pension plans and certain high net worth individuals) (collectively, the “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 Sub-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 Sub-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 the date of this SAI, Mr. Pike owned no Fund shares.

In addition to serving as a portfolio manager for the Fund, Mr. Pike serves as the portfolio manager for the AR Capital Real Estate Income Fund, a registered open-end mutual fund sponsored by ARC.

Other Accounts by Type

Total Number of Accounts by Account Types

Total Assets by Account Type

Number of Accounts by Types Subject to a Performance Fee

Total Assets by Account Types Subject to a Performance Fee

Registered Investment Companies

1

$

28mm

None

None

Other Pooled Investment Vehicles

None

None

None

None

Other Accounts

3

$

107mm

None

None

Distributor

Realty Capital Securities, LLC (the “Distributor”), located at Three Copley Place, Boston, MA 02116 is serving as the Fund’s principal underwriter and acts as the distributor of the Fund’s shares on a best efforts basis, subject to various conditions.

ALLOCATION OF BROKERAGE

Specific decisions to purchase or sell securities for the Fund are made by the portfolio manager who is an employee of the Advisor or the Sub-Advisor, as the case may be. The Advisor and the Sub-Advisor are authorized by the trustees to allocate the orders placed on behalf of the Fund to brokers or dealers who may, but need not, provide research or statistical material or other services to the Fund or the Advisor or the Sub-Advisor for the Fund’s use. Such allocation is to be in such amounts and proportions as the Advisor or the Sub-Advisory, as the case may be, shall determine.

In selecting a broker or dealer to execute each particular transaction, the Advisor or the Sub-Advisor will take the following into consideration:

Brokers or dealers executing a portfolio transaction on behalf of the Fund may receive a commission in excess of the amount of commission another broker or dealer would have charged for executing the transaction if the Advisor or the Sub-Advisory, as the case may be, determines in good faith that such commission is reasonable in relation to the value of brokerage and research services provided to the Fund. In allocating portfolio brokerage, the Advisor or the Sub-Advisory, as the case may be, may select brokers or dealers who also provide brokerage, research and other services to other accounts over which the Advisor or Sub-Advisor exercises investment discretion. Some of the services received as the result of Fund transactions

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may primarily benefit accounts other than the Fund, while services received as the result of portfolio transactions effected on behalf of those other accounts may primarily benefit the Fund.

Affiliated Party Brokerage :  Neither the Advisor nor the Sub-Advisor (nor their respective affiliates), will purchase securities or other property from, or sell securities or other property to, the Fund, except that the Fund may in accordance with rules under the 1940 Act engage in transactions with accounts that are affiliated with the Fund as a result of common officers, directors, advisers, members, managing general partners or common control. These transactions would be effected in circumstances in which the Advisor or the Sub-Advisor, as the case may be, determines that it would be appropriate for the Fund to purchase and another client to sell, or the Fund to sell and another client to purchase, the same security or instrument each on the same day.

The Advisor and the Sub-Advisor may place their trades under a policy adopted by the trustees pursuant to Section 17(e) and Rule 17(e)(1) under the 1940 Act, which place limitations on the securities transactions effected through affiliated brokers. The policy of the Fund with respect to brokerage is reviewed by the trustees from time to time. Because of the possibility of further regulatory developments affecting the securities exchanges and brokerage practices generally, the foregoing practices may be modified.

TAX STATUS

The following discussion is general in nature and should not be regarded as an exhaustive presentation of all possible tax ramifications. All shareholders should consult a qualified tax adviser regarding their investment in the Fund.

The Fund intends to qualify as regulated investment company under Subchapter M of the Code, which requires compliance with certain requirements concerning the sources of its income, diversification of its assets, and the amount and timing of its distributions to shareholders. Such qualification does not involve supervision of management or investment practices or policies by any government agency or bureau. By so qualifying, the Fund should not be subject to federal income or excise tax on its net investment income or net capital gain, which are distributed to shareholders in accordance with the applicable timing requirements. Net investment income and net capital gain of the Fund will be computed in accordance with Section 852 of the Code. Net investment income is made up of dividends and interest less expenses. Net capital gain for a fiscal year is computed by taking into account any capital loss carryforward of the Fund.

The Fund intends to distribute all of its net investment income, any excess of net short-term capital gains over net long-term capital losses, and any excess of net long-term capital gains over net short-term capital losses in accordance with the timing requirements imposed by the Code and therefore should not be required to pay any federal income or excise taxes. Distributions of net investment income will be made monthly and net capital gain will be made after the end of each fiscal year, and no later than December 31 of each year. Both types of distributions will be in shares of the Fund unless a shareholder elects to receive cash.

To be treated as a regulated investment company under Subchapter M of the Code, the Fund must also (a) derive at least 90% of its gross income from dividends, interest, payments with respect to securities loans, net income from certain publicly traded partnerships and gains from the sale or other disposition of securities or foreign currencies, or other income (including, but not limited to, gains from options, futures or forward contracts) derived with respect to the business of investing in such securities or currencies, and (b) diversify its holdings so that, at the end of each fiscal quarter, (i) at least 50% of the market value of the Fund’s assets is represented by cash, U.S. government securities and securities of other regulated investment companies, and other securities (for purposes of this calculation, generally limited in respect of any one issuer, to an amount not greater than 5% of the market value of the Fund’s assets and 10% of the outstanding voting securities of such issuer) and (ii) not more than 25% of the value of its assets is invested in the securities of (other than U.S. government securities or the securities of other regulated investment companies) any one issuer, two or more issuers which the Fund controls and which are determined to be engaged in the same or similar trades or businesses, or the securities of certain publicly traded partnerships.

If the Fund fails to qualify as a regulated investment company under Subchapter M in any fiscal year, it will be treated as a corporation for federal income tax purposes. As such, the Fund would be required to pay income taxes on its net investment income and net realized capital gains, if any, at the rates generally

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applicable to corporations. Shareholders of the Fund generally would not be liable for income tax on the Fund’s net investment income or net realized capital gains in their individual capacities. Distributions to shareholders, whether from the Fund’s net investment income or net realized capital gains, would be treated as taxable dividends to the extent of current or accumulated earnings and profits of the Fund.

The Fund is subject to a 4% nondeductible excise tax on certain undistributed amounts of ordinary income and capital gain under a prescribed formula contained in Section 4982 of the Code. The formula requires payment to shareholders during a calendar year of distributions representing at least 98% of the Fund’s ordinary income for the calendar year and at least 98.2% of its capital gain net income (i.e., the excess of its capital gains over capital losses) realized during the one-year period ending October 31 during such year plus 100% of any income that was neither distributed nor taxed to the Fund during the preceding calendar year. Under ordinary circumstances, the Fund expects to time its distributions so as to avoid liability for this tax.

The following discussion of tax consequences is for the general information of shareholders that are subject to tax. Shareholders that are IRAs or other qualified retirement plans are exempt from income taxation under the Code.

Distributions of taxable net investment income and the excess of net short-term capital gain over net long-term capital loss are taxable to shareholders as ordinary income.

Distributions of net capital gain (“capital gain dividends”) generally are taxable to shareholders as long-term capital gain, regardless of the length of time the shares of the Fund have been held by such shareholders.

A redemption of Fund shares by a shareholder will result in the recognition of taxable gain or loss in an amount equal to the difference between the amount realized and the shareholder’s tax basis in his or her Fund shares. Such gain or loss is treated as a capital gain or loss if the shares are held as capital assets. However, any loss realized upon the redemption of shares within six months from the date of their purchase will be treated as a long-term capital loss to the extent of any amounts treated as capital gain dividends during such six-month period. All or a portion of any loss realized upon the redemption of shares may be disallowed to the extent shares are purchased (including shares acquired by means of reinvested dividends) within 30 days before or after such redemption.

Distributions of taxable net investment income and net capital gain will be taxable as described above, whether received in additional cash or shares. Shareholders electing to receive distributions in the form of additional shares will have a cost basis for federal income tax purposes in each share so received equal to the net asset value of a share on the reinvestment date.

All distributions of taxable net investment income and net capital gain, whether received in shares or in cash, must be reported by each taxable shareholder on his or her federal income tax return. Dividends or distributions declared in October, November or December as of a record date in such a month, if any, will be deemed to have been received by shareholders on December 31, if paid during January of the following year. Redemptions of shares may result in tax consequences (gain or loss) to the shareholder and are also subject to these reporting requirements.

Under the Code, the Fund will be required to report to the Internal Revenue Service all distributions of taxable income and capital gains as well as gross proceeds from the redemption or exchange of Fund shares, except in the case of certain exempt shareholders. Under the backup withholding provisions of Section 3406 of the Code, distributions of taxable net investment income and net capital gain and proceeds from the redemption or exchange of the shares of a regulated investment company may be subject to withholding of federal income tax in the case of non-exempt shareholders who fail to furnish the investment company with their taxpayer identification numbers and with required certifications regarding their status under the federal income tax law, or if the Fund is notified by the IRS or a broker that withholding is required due to an incorrect TIN or a previous failure to report taxable interest or dividends. If the withholding provisions are applicable, any such distributions and proceeds, whether taken in cash or reinvested in additional shares, will be reduced by the amounts required to be withheld.

Original Issue Discount and Pay-In-Kind Securities :  Current federal tax law requires the holder of a U.S. Treasury or other fixed-income zero coupon security to accrue as income each year a portion of the

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discount at which the security was purchased, even though the holder receives no interest payment in cash on the security during the year. In addition, pay-in-kind securities will give rise to income which is required to be distributed and is taxable even though the Fund holding the security receives no interest payment in cash on the security during the year.

Some of the debt securities (with a fixed maturity date of more than one year from the date of issuance) that may be acquired by the Fund may be treated as debt securities that are issued originally at a discount. Generally, the amount of the original issue discount (“OID”) is treated as interest income and is included in income over the term of the debt security, even though payment of that amount is not received until a later time, usually when the debt security matures. A portion of the OID includable in income with respect to certain high-yield corporate debt securities (including certain pay-in-kind securities) may be treated as a dividend for U.S. federal income tax purposes.

Some of the debt securities (with a fixed maturity date of more than one year from the date of issuance) that may be acquired by the Fund in the secondary market may be treated as having market discount. Generally, any gain recognized on the disposition of, and any partial payment of principal on, a debt security having market discount is treated as ordinary income to the extent the gain, or principal payment, does not exceed the “accrued market discount” on such debt security. Market discount generally accrues in equal daily installments. The Fund may make one or more of the elections applicable to debt securities having market discount, which could affect the character and timing of recognition of income.

Some debt securities (with a fixed maturity date of one year or less from the date of issuance) that may be acquired by the Fund may be treated as having acquisition discount, or OID in the case of certain types of debt securities. Generally, the Fund will be required to include the acquisition discount, or OID, in income over the term of the debt security, even though payment of that amount is not received until a later time, usually when the debt security matures. The Fund may make one or more of the elections applicable to debt securities having acquisition discount, or OID, which could affect the character and timing of recognition of income.

A fund that holds the foregoing kinds of securities may be required to pay out as an income distribution each year an amount, which is greater than the total amount of cash interest the Fund actually received. Such distributions may be made from the cash assets of the Fund or by liquidation of portfolio securities, if necessary (including when it is not advantageous to do so). The Fund may realize gains or losses from such liquidations. In the event the Fund realizes net capital gains from such transactions, its shareholders may receive a larger capital gain distribution, if any, than they would in the absence of such transactions.

Shareholders of the Fund may be subject to state and local taxes on distributions received from the Fund and on redemptions of the Fund’s shares.

Because many of the Fund’s REIT investments will make distributions in excess of their taxable income, due in part to available depreciation deductions, it is expected that a portion of such distributions will constitute a non-taxable return of capital. Any return of capital generally will reduce the Fund’s tax basis in the REIT investment but not below zero. To the extent the distributions from a particular REIT exceed the Fund’s tax basis in the REIT shares, the Fund generally will recognize capital gain. Shareholders of the Fund may also receive distributions that constitute a non-taxable return of capital. Shareholders of the Fund who receive such a distribution will reduce the tax basis in their Fund shares but not below zero. To the extent that such a distribution exceeds a shareholder’s tax basis in Fund shares, such shareholder generally will recognize a capital gain.

A brief explanation of the form and character of the distribution accompany each distribution. In January of each year the Fund issues to each shareholder a statement of the federal income tax status of all distributions.

Shareholders should consult their tax advisers about the application of federal, state and local and foreign tax law in light of their particular situation.

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OTHER INFORMATION

Each share represents a proportional interest in the assets of the Fund. Each share has one vote at shareholder meetings, with fractional shares voting proportionally, on matters submitted to the vote of shareholders. There are no cumulative voting rights. Shares do not have pre-emptive or conversion or redemption provisions. In the event of a liquidation of the Fund, shareholders are entitled to share pro rata in the net assets of the Fund available for distribution to shareholders after all expenses and debts have been paid.

Administrator

RCS Advisory Services, LLC, located at 405 Park Avenue, New York, NY 10022, serves as the Fund’s Administrator. American National Stock Transfer, LLC serves as the Fund’s Transfer Agent. Gemini Fund Services, LLC, located at 80 Arkay Drive, Suite 110, Hauppauge, NY 11788 serves as the Fund’s Sub-Administrator, Fund Accounting Agent and Sub-Transfer Agent.

Legal Counsel

Proskauer Rose LLP, Eleven Times Square, New York, NY 10036-8299, acts as legal counsel to the Fund.

Custodian

Union Bank, N.A. (the “Custodian”) serves as the primary custodian of the Fund’s assets, and may maintain custody of the Fund’s assets with domestic and foreign sub-custodians (which may be banks, trust companies, securities depositories and clearing agencies) approved by the trustees. Assets of the Fund are not held by the Advisor or commingled with the assets of other accounts other than to the extent that securities are held in the name of a custodian in a securities depository, clearing agency or omnibus customer account of such custodian. The Custodian’s principal business address is 350 California Street, 6 ^th Floor, San Francisco, CA 94104.

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INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

BBD, LLP is the independent registered public accounting firm for the Fund and will audit the Fund’s financial statements. BBD, LLP is located at 1835 Market Street, 26 ^th Floor, Philadelphia, PA 19103.

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AMERICAN REAL ESTATE INCOME FUND
 
INDEX TO FINANCIAL STATEMENTS

		Page
Audited Financial Statements
Report of Independent Registered Public Accounting Firm			F-2
Statement of Assets and Liabilities			F-3
Statement of Operations			F-4
Notes to the Financial Statements			F-5

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American Real Estate Income Fund
Statement of Assets and Liabilities
January 3, 2014

Assets
Cash		$	100,000
Deferred offering costs			350,186
Prepaid expenses			32,004
Total assets		$	482,190
Liabilities
Payable to affiliate		$	345,276
Accrued expenses			36,914
Total liabilities		$	382,190
Net assets		$	100,000
At January 3, 2014, the components of net assets were as follows:
Paid-in Capital		$	100,000
Shares issued and outstanding (a)			10,000
Net asset value per share		$	10.00

 
 
The accompanying notes are an integral part of the financial statements.

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American Real Estate Income Fund
Statement of Operations
January 3, 2014

Expenses
Organizational expenses		$	237,378
Less: reimbursement from advisor			237,378
Total expenses		$	—

 
 
The accompanying notes are an integral part of the financial statements.

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American Real Estate Income Fund
Notes to the Financial Statements
January 3, 2014

1.  Organization

American Real Estate Income Fund (the “Fund”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as a non-diversified, closed-end management investment company. The Fund was organized as a Delaware statutory trust on March 23, 2011 and did not have any operations from that date until January 3, 2014, other than those relating to organizational matters and registration of its shares under applicable securities law.

SEL Asset Management, LLC (the “Advisor”) serves as the Fund’s investment advisor and National Fund Advisors, LLC (the “Sub-Advisor”) serves as the Fund’s investment sub-advisor.

The Fund will engage in a continuous offering, up to a maximum of 100 million shares of beneficial interest, and will operate as an interval fund that will offer to make quarterly repurchases of shares at the Fund’s net asset value (“NAV”). The Fund’s initial offering price is $10.00 per share and the shares are offered subject to a maximum sales charge of 6.00% of the offering price. AR Capital, LLC, an affiliate of our Sub-Advisor initially capitalized the Fund on January 3, 2014 at $10.00 per share. The sales charge was waived in the initial funding.

The Fund’s investment objective is to generate income, with capital appreciation as a secondary objective. The Fund will pursue this objective through an investment strategy that concentrates on investments in the real estate industry.

2.  Summary of Significant Accounting Policies

Basis of Accounting and Presentation

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The following is a summary of significant accounting policies used in preparing the financial statements.

Use of Estimates

The preparation of the financial statements in conformity with U.S. GAAP 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 during the period. Actual results could differ from those estimates.

Cash

Cash includes cash held or deposited in bank accounts. The Fund deposits cash with high quality financial institutions. These deposits are guaranteed by the Federal Deposit Insurance Company up to an insurance limit.

Offering and Organizational Costs

Organizational costs are charged to expense as incurred. Offering costs incurred by the Fund are treated as deferred charges until operations commence and thereafter will be amortized into expense over a 12 month period using the straight line method.

As of January 3, 2014, the Fund had incurred $237,378 in organizational costs and had $350,186 in deferred offering costs. As of January 3, 2014, all costs incurred by the Fund in connection with its offering are payable to AR Capital, LLC.

Federal Income Taxes

It is the policy of the Fund to qualify as a regulated investment company, by complying with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies, and by distributing substantially all of its taxable earnings to its shareholders. Accordingly, no provision for federal income or excise tax is necessary.

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American Real Estate Income Fund
Notes to the Financial Statements
January 3, 2014

3.  Investment Advisor

The Advisor is entitled to receive a monthly fee equal to the annual rate of 1.10% of the Fund’s average daily net assets.

Pursuant to a sub-advisory agreement between the Advisor and Sub-advisor, the Sub-Advisor is entitled to receive a monthly fee equal to the annual rate of 1.00% of the Fund’s average daily net assets attributable to that portion of the Fund’s portfolio that has been allocated to the Sub-Advisor by the Advisor. The Sub-Advisor’s fee will be paid by the Advisor out of the fee the Advisor receives from the Fund, and will not impact the Fund’s expenses.

The Advisor and the Fund have entered into an expense limitation and reimbursement agreement (the “Expense Limitation Agreement”), under which the Advisor has agreed contractually to waive its fees and to pay or absorb the direct, ordinary operating expenses of the Fund (including offering and organizational expenses, but excluding interest, brokerage commissions, acquired fund fees and expenses, and extraordinary expenses), to the extent that they exceed 2.50% per annum of the Fund’s average daily net assets (the “Expense Limitation”). 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 waived and Fund expenses paid or absorbed. Any waiver or reimbursement of fees by the Advisor is subject to repayment by the Fund within the three fiscal years following the fiscal year in which such waiver or reimbursement occurred; provided, however, that (i) the Fund is able to make such repayment without exceeding the Expense Limitation in place at the time the fees being repaid were waived, and (ii) such repayment is approved by the board.

As of January 3, 2014, no fees had been incurred by or paid to the Advisor by the Fund and the Advisor had reimbursed $237,378 in Fund expenses.

4.  Indemnification

The Fund indemnifies its officers and trustees for certain liabilities that may arise from the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts that contain a variety of representations and warranties 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 industry experience, the Fund expects this risk of loss due to these warranties and indemnities to be remote.

5.  Subsequent Events

The Fund has evaluated subsequent events through the date the financial statements were issued and has determined there have not been any events that have occurred that would require adjustments or disclosures in the financial statements or the accompanying notes.

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SEL Asset Management, LLC

Proxy Voting Policies and Procedures

Policy

SEL Asset Management, LLC, as a matter of policy and as a fiduciary to our clients, has responsibility for voting proxies for portfolio securities consistent with the best economic interests of the clients. Our firm maintains written policies and procedures as to the handling, research, voting and reporting of proxy voting and makes appropriate disclosures about our firm's proxy policies and practices. Our policy and practice includes the responsibility to monitor corporate actions, receive and vote client proxies and disclose any potential conflicts of interest as well as making information available to clients about the voting of proxies for their portfolio securities and maintaining relevant and required records.

Background

Proxy voting is an important right of shareholders and reasonable care and diligence must be undertaken to ensure that such rights are properly and timely exercised.

Investment advisers registered with the SEC, and which exercise voting authority with respect to client securities, are required by Rule 206(4)-6 of the Advisers Act to (a) adopt and implement written policies and procedures that are reasonably designed to ensure that client securities are voted in the best interests of clients, which must include how an adviser addresses material conflicts that may arise between an adviser's interests and those of its clients; (b) to disclose to clients how they may obtain information from the adviser with respect to the voting of proxies for their securities; (c) to describe to clients a summary of its proxy voting policies and procedures and, upon request, furnish a copy to its clients; and (d) maintain certain records relating to the adviser's proxy voting activities when the adviser does have proxy voting authority.

Responsibility

The CCO has the responsibility for the implementation and monitoring of our proxy voting policy, practices, disclosures and record keeping, including outlining our voting guidelines in our procedures.

Procedure

SEL Asset Management, LLC has adopted procedures to implement the firm's policy and conducts reviews to monitor and ensure the firm's policy is observed, implemented properly and amended or updated, as appropriate, which include the following:

Voting Procedures

Disclosure

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Client Requests for Information

Voting Guidelines

Conflicts of Interest

Recordkeeping

The CCO or portfolio manager shall retain the following proxy records in accordance with the SEC's five-year retention requirement.

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National Fund Advisors, LLC

Proxy Voting, Corporate Actions and Class Actions
March 2013

I.  Background

This Proxy Voting, Corporate Actions and Class Actions Policy (“Policy”) is adopted by National Fund Advisors, LLC (“NFA,” the “Adviser” or the “Firm”), for use in connection with its management of portfolios for clients, including Realty Capital Income Funds Trust (the “Trust”) and each of its series (each a “Fund” and collectively the “Funds”), in order to provide a method of monitoring proxy voting and actions taken with regard to corporate actions and class actions, to provide a method of reporting the actions taken appropriately and to meet regulatory requirements and client needs.

NFA generally will exercise voting authority on behalf of its clients, including the Funds (collectively, “Clients”), pursuant to contractual delegation of such authority. Clients that do not provide written authorization for NFA to exercise voting authority are responsible for their own proxy voting, corporate actions and class actions.

II.  Issue

Rule 206(4)-6 under the Advisers Act requires every investment adviser who exercises voting authority with respect to client securities to adopt and implement written policies and procedures reasonably designed to ensure that the adviser votes proxies in the best interest of its clients. The procedures must address material conflicts that may arise in connection with proxy voting. The Rule further requires the adviser to provide a concise summary of the adviser’s proxy voting policies and procedures and to provide copies of the complete proxy voting policy and procedures to clients upon request. Lastly, the Rule requires that the adviser disclose to clients how they may obtain information on how the adviser voted their proxies.

III.  Policy — Proxies and Corporate Actions

To the extent that voting a proxy is desirable, NFA votes proxies in a manner that it believes is most likely to enhance the economic value of the underlying securities held in client accounts and considers each proposal on a case-by -case basis taking into consideration any relevant contractual obligations as well as other relevant facts and circumstances at the time of the vote. NFA will not respond to proxy solicitor requests unless it determines that it is in the best interest of its Clients to do so.

In certain limited circumstances, NFA may, on behalf of Clients, enter into voting agreements or other contractual obligations that govern the voting of shares. In the event of a conflict between any such contractual requirements and the Guidelines (listed below), NFA will vote in accordance with its contractual obligations.

Where NFA determines that there are unusual costs and/or difficulties associated with voting a proxy (or class action or corporate action), which more typically might be the case with respect to proxies (or class action or corporate action) of non-U.S. issuers, the Firm reserves the right to not vote a proxy unless it determines that the potential benefits of voting the proxy exceed the expected cost to the Client. Other factors that may influence NFA’s determination not to vote a proxy for a debtor equity security include: (1) whether the value of the portfolio holding is insignificant in relation to the Client’s portfolio; (2) whether the cost of voting the proxy outweighs the possible benefit to the applicable Client, including, without limitation, situations where a jurisdiction imposes share blockingrestrictions which may affect the ability of the portfolio managers to effect trades in the related security; or (3) NFA otherwise has determined that it is consistent with its fiduciary obligations not to vote the proxy.

The Guidelines provide a basis for making decisions in the voting of proxies, class actions or corporate actions for Clients. When voting proxies, class actions or corporate actions, NFA’s utmost concern is that all decisions be made solely in the interests of the Client and with the goal of maximizing the value of the Client’s investments. With this goal in mind, the Guidelines cover various categories of voting decisions and generally specify whether NFA will vote (assuming it votes at all) for or against a particular type of proposal. NFA’s underlying philosophy, however, is that its portfolio managers, who are primarily responsible for

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evaluating the individual holdings of the Firm’s clients, are best able to determine how to further client interests and goals and are primarily responsible for determining how to vote proxies, class actions or corporate actions in accordance with this policy. The portfolio managers may, in their discretion, take into account the recommendations of appropriate members of NFA’s executive and senior management and, if desired, an outside service.

All proxies, class actions or corporate actions received shall be retained by the Chief Risk Officer or designate. Such records shall include whether the Firm voted such proxy or corporate actions and, if so, how the proxy was voted. The records also shall be transcribed into a format such that any Client’s overall proxy and corporate actions voting record can be provided upon request.

IV.  Proofs of Claim

NFA does not complete proofs-of-claim on behalf of Clients for current or historical holdings; however, the Firm will assist clients with collecting information relevant to filing proofs-of-claim when such information is in the possession of NFA. The Firm does not undertake to complete or provide proofs-of-claim for securities that had been held by any former client.

V.  Class Actions Policy

In the event that Client securities become the subject of a Class Action lawsuit, the portfolio manager will assess the value to Clients in participating in such legal action. If the portfolio manager decides that participating in the Class Action is in the Client’s best interest, NFA will submit appropriate documentation on Clients’ behalf, subject to contractual or other authority. NFA may consider any relevant information in determining whether participation in a Class Action lawsuit is in a Client’s best interest, including the costs that would be incurred by the Client and the resources that would be expended in participating in a Class Action, including in comparison to the Client pursuing other legal recourse against the issuer.

VI.  Procedures for Lent Securities and Issuers in Share-blocking Countries

At times, NFA may not be able to vote proxies or take action in respect of corporate actions on behalf of Clients when a Client’s relevant securities are on loan in accordance with the Client’s securities lending program that is controlled by a securities lending agent or custodian acting independently of NFA.Notwithstanding this fact, in the event that the Firm becomes aware of a proxy or corporate action voting matter that would enhance the economic value of the client’s position and that position is lent out, NFA will make reasonable efforts to inform the Client that NFA is not able to vote the proxy until or unless the Client recalls the lent security. When such situations relate to the Funds, NFA will take actions to recall the lent security.In certain markets where share blocking occurs, shares must be frozen for trading purposes at the custodian or sub -custodian in order to vote. During the time that shares are blocked, any pending trades will not settle. Depending on the market, this period can last from one day to three weeks. Any sales that must be executed will settle late and potentially be subject to interest charges or other punitive fees. For this reason, in blocking markets, the Firm retains the right to vote or not, based on the determination of the Firm’s investment personnel as to whether voting would be in the Client’s best interest..

VII.  Procedures for Material Conflicts of Interest

Should material conflicts of interest arise as to a proxy or corporate action, the proxy or corporate action shall be brought to the attention of the Chief Compliance Officer or designate, who shall involve other executive managers or legal counsel (which may be the General Counsel) as may be deemed necessary by the Chief Compliance Officer to attempt to resolve such conflicts. Such individuals also shall determine the materiality of such conflict if the conflict cannot be resolved. (An example of a specific conflict of interest that should be brought to the Chief Compliance Officer (or designate) is a situation where a proxy contest involves securities issued by a Client. When in doubt as to a potential conflict, portfolio managers shall bring the proxy to the attention of the Chief Compliance Officer or designate.)

If, after appropriate review, a material conflict is deemed to exist, NFA will seek to resolve any such conflict in the best interest of the Client whose assets it is voting by pursuing any one of the following courses of action: (i) voting (or not voting) in accordance with the voting guidelines or factors set forth in this Policy; (ii) convening a committee consisting of the Chief Compliance Officer and other non-investment

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executive officers of the Firm to assess and resolve the conflict; (iii) voting in accordance with the recommendation of an independent third-party service provider chosen non- investment executive officers of NFA; or (iv) voting (or not voting) in accordance with the instructions of such Client or (v) not voting the Proxy (if consistent with NFA’s fiduciary obligations).

VIII.  Procedures for Proxy Solicitation

In the event that any employee of NFA receives a request to reveal or disclose NFA’s voting intention on a specific proxy event, then the employee must forward the solicitation request to the Chief Compliance Officer or designate. Such requests shall be reviewed with appropriate executive and senior management. Any written requests shall be retained with the proxy files maintained by the Chief Operating Officer or designate.

IX.  Additional Procedures for the Funds

A.  Filing Form N-PX

Rule 30b1-4 under the Investment Company Act of 1940 requires mutual funds to file an annual record of proxies voted by a Fund on Form N-PX. Form N -PX must be filed each year no later than August 31 and must contain the Funds’ proxy voting record for the most recent twelve-month period ending June 30.

The Funds rely upon their respective fund administrator to prepare and make their filings on Form N-PX. NFA shall assist the fund administrator by providing information regarding any proxy votes made for the Funds within the most recent twelve-month period ending June 30. The Firm shall retain records of any such votes with sufficient information to make accurate annual Form N-PX filings.

B.  Providing Policies and Procedures

Mutual funds (including the Funds) that invest in voting securities are required to describe in their statements of additional information (“SAIs”) the policies and procedures that they use to determine howto vote proxies relating to securities held in their portfolios. The Funds may choose to include these policies and procedures as part of their registration statement. Closed end funds must disclose their proxy voting policies and procedures annually on Form N-CSR.

Funds are required to disclose in shareholder reports that a description of the fund's proxy voting policies and procedures is available (i) without charge, upon request, by calling a specified toll-free (or collect) telephone number; (ii) on the fund's website, if applicable; and (iii) on the Commission's website at http://www.sec.gov. The Funds’ administrator shall ensure that such disclosures are included when preparing shareholder reports on the Funds’ behalf. The Funds currently do not provide the proxy policies and procedures on their website. Each Fund is required to send the description of its proxy voting policies and procedures within three business days of receipt of the request, by first -class mail or other means designed to ensure equally prompt delivery. The Funds rely upon the fund administrator to provide this service.

X.  Recordkeeping

A.  NFA must maintain the documentation described in this policy for a period of not less than five (5) years from the end of the fiscal year during which the last entry was made on such record, the first two (2) years at its principal place of business.

B.   Client request to review proxy votes:

Any request from a Client, whether written (including e -mail) or oral, received by any employee of NFA, must be retained. In order to facilitate the management of proxy voting record keeping process, and to facilitate dissemination of such proxy voting records to clients, the Firm will distribute to any Client requesting proxy voting information NFA’s complete proxy voting record for the Client for the period requested. If deemed operationally more efficient, the Firm may choose to release its entire proxy voting record for the requested period, with any information identifying a particular client redacted.

Furnish the information requested, free of charge, to the Client within a reasonable time period (within 10 business days) . Maintain a copy of the written record provided in response to Client’s written (including e-mail) or oral request. A copy of the written response should be attached and maintained with the Client’s written request, if applicable, and maintained in an appropriate file.

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Clients can require the delivery of the proxy voting record relevant to their accounts for the five year period prior to their request.

C.    Proxy voting records:

Documents prepared or created by NFA that were material to making a decision on how to vote, or that memorialized the basis for the decision.

Documentation or notes or any communications received from third parties, other industry analysts, third party service providers, company’s management discussions, etc. that were material in the basis for the decision.

XI.  Disclosure

The CCO or designate will ensure that Form ADV Part 2A is updated as necessary to reflect: (i) all material changes to this policy; and (ii) regulatory requirements related to proxy voting disclosure.

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Attachment A
Proxy Voting, Corporate Action and Class Action Policy Guidelines
March 2013

The proxy voting decisions set forth below refer to proposals by company management except for the categories of “Shareholder Proposals” and “Social Issue Proposals.” The voting decisions in these latter two categories refer to proposals by outside shareholders.

Governance

Capital Structure

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Mergers and Restructuring

Board of Trustees

Anti-Takeover Provisions

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Compensation

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Shareholder Proposals

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Social Issue Proposals

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