Converting a Private Fund into a Public Fund: Implications for Pricing and Liquidity

Bluerock Total Income+ Real Estate Fund (TI+) was established in 2012 as a closed-end fund operating as an Interval Fund, that is, a fund with no fixed end date that offers limited liquidity at fixed periodic intervals. In the case of Bluerock TI+, a series of negative events put this structure to the test. The fund, which was marketed mainly to qualified investors, grew to an impressive ~$4.2 billion in assets as of September 30, 2025. However, beginning in 2023, the fund posted negative returns for nine consecutive quarters, pointing to a steady erosion of its NAV. This negative performance (against the backdrop of challenging real estate market conditions) undermined investor confidence and led to a significant wave of redemption requests that the fund was not equipped to handle within its constraints.

The strategic move: listing on the stock exchange (NYSE):

The solution approved by the fund’s management and a majority of investors is to change the fund’s structure from a closed-end interval fund into a public fund traded on the stock exchange. In practice, the fund is set to list for continuous trading on the New York Stock Exchange (NYSE) on December 16, 2025, in a move that effectively converts existing holdings into publicly traded shares. As part of this, the fund will also be rebranded: its name will change to Bluerock Private Real Estate Fund and its new ticker will be BPRE. The move was approved by an overwhelming majority in a shareholder vote: 81% of more than 40,000 votes cast were in favor of the listing, despite the understanding that the transition could come at a price (literally).

What is this move actually trying to achieve?

First and foremost, full, ongoing liquidity for investors. Once BPRE shares begin trading daily on the exchange, any investor will be able to sell (or buy) shares on any trading day, regardless of quarterly redemption windows or administrative restrictions. In other words, investors’ money will no longer be “locked” in the fund: anyone will be able to exit a holding immediately by selling in the market. For many investors, especially those who had been waiting a long time in the redemption queue, this is a significant relief: “liquidity is better than being stuck in an investment structure that has to sell assets slowly to fund redemptions,” as it was vividly put. The price of this freedom is that responsibility for liquidity shifts from the fund itself (which had been forced to sell assets to meet redemptions) to the capital market: supply and demand among investors will determine the price.

That said, the decision was, as noted, adopted by an overwhelming majority because most investors preferred immediate liquidity over continued uncertainty and restrictions. The 81% who voted “for” were effectively saying: we are willing to absorb a certain loss of value (a discount) in exchange for the ability to convert the asset into cash at any time. For the fund itself, the move significantly eases liquidity management: after the listing, fund management will no longer need to proactively sell assets to meet redemptions, as sales will take place between investors in the open market. This should put an end to the spiral of forced asset sales. The fund’s managers will be able to focus on managing the portfolio optimally for the long term, without holding large liquidity reserves and without worrying about redemption queues. On the other hand, the fund now faces a new test: the test of the open market, where the price is set on a daily basis.

Summary:

The case of Bluerock Total Income+ Fund (now BPRE) serves as a vivid reminder of the cost and the benefit of liquidity in alternative investments. The move from a closed-end interval structure to a publicly traded structure solved investors’ immediate liquidity problem, but exposed them to market forces and to a potential discount to the value of the assets. The key will be the new balance between return and liquidity: will BPRE manage to continue generating current income while trading close to its net asset value? Will BPRE investors now demand a higher annual return (a premium) to compensate for volatility and concerns, compared with investors in the same fund when it was not traded?

The answers to these questions will become clearer as BPRE builds a track record in the public market. In the meantime, what is clear is that liquidity has become a central consideration for many qualified investors, and they are prepared to accept dramatic structural changes to achieve it, even at the cost of giving up part of their return.

Looking ahead, this kind of change in fund structure, from a non-traded fund to a traded fund, could be one of the possible solutions for funds that run into a similar problem in the future.

Disclaimer:

Nothing in this publication constitutes an offer to the public or an invitation to invest of any kind; it is a publication and presentation of general information only. The article and its content rely on information, publications and data received from third parties, which were assumed to be accurate without the company having examined or verified their accuracy. The information presented in this publication does not constitute investment advice/marketing or a substitute for investment advice/marketing tailored personally and specifically to each individual, taking into account their data, needs, financial position, circumstances and investment objectives.

Sources:

Kunimoto, L. (2025, December 11). Bluerock Total Income Plus -> Bluerock Private Real Estate Fund (NYSE: BPRE): When an interval fund goes public. Accredited Investor Insights (Substack).