HFRO - HFRO: Preferred Shares Look More Attractive Than The Commons For This CEF
2024-03-26 06:18:09 ET
Summary
- Highland Opportunities and Income Fund is a $1 billion closed-end fund with a real estate-focused portfolio.
- The main portfolio manager for the CEF, Mr. James Dondero, is also the founder of NexPoint, an alternative investments group.
- HFRO holds a significant portion of equity and debt from NexPoint companies.
- The majority of the HFRO portfolio is highly illiquid, being classified as 'Level 3' in the company's Annual Report.
- The preferred shares issued by HFRO are more attractive than the common shares due to their regulatory protection and high yield of roughly 7%.
Thesis
The Highland Opportunities and Income Fund ( HFRO ) is a $1 billion closed-end fund holding a real estate-focused portfolio that falls on the illiquid side. It is worth noting that the main portfolio manager for the CEF, Mr. James Dondero, is also the founder of NexPoint, an alternative investments group. There is a symbiotic relationship here, with HFRO holding a number of NexPoint funds and REITs in size....
HFRO: Preferred Shares Look More Attractive Than The Commons For This CEF