Replies to post #233 on United Development Funding IV fka UDFI

[Enterprising Investor]

Past Performance Is Not Indicative Of Future Results

I just couldn't resist!

NexPoint Strategic Opportunities Fund started out as Highland Credit Strategies Fund - a multi-strategy investment approach to exploit relative value and arbitrage opportunities within the credit markets. Highland sought out directional, relative value, capital structure arbitrage and event-driven investment strategies across various credit markets where the manager holds significant investment experience in primarily the leveraged loan, high yield, structured products, and distressed markets.

The Trust will seek to create a portfolio of investments that will maintain low correlation to the broader equity and corporate bond markets, as well as to other alternative investment strategies.

Effective 3/19/18, the fund changed its name to NexPoint Strategic Opportunities Fund and altered its investment profile. The objective of providing both current income and capital appreciation remained the same and the fund continued to invest in the following categories of instruments: (i) secured and unsecured floating and fixed rate loans; (ii) bonds and other debt obligations; (iii) debt obligations of stressed, distressed and bankrupt issuers; (iv) structured products, including but not limited to, mortgage-backed and other asset-backed securities and collateralized debt obligations; and (v) equities; however, the it will no longer be required to invest at least 80% of its assets in categories (i)-(iv).

Hint: NHF is now free to put more money to work in distressed real estate.

Link to NHF board:
https://investorshub.advfn.com/NexPoint-Strategic-Opportunities-Fund-NHF-30304/

The fund previously already spun off NexPoint Residential Trust a couple years back. It pursues investments in class A and B multifamily real estate property, typically with a value-add component, where it can invest significant amounts of capital to provide “life style” amenities to “work force” housing.

Link to NXRT board:
https://investorshub.advfn.com/NexPoint-Residential-Trust-Inc-NXRT-29650/

I know what you’re thinking. I thought what you thought. Why would any fund sink $3 million in UDFI. If the price doubles, it will hardly move the needle when it comes to results. They like us must be expecting a future value much greater based on NAV.

Maybe they view the lawsuit as a potential bonus?

Highland and NexPoint know a little about lawsuits. The Texas Court of Appeals recently confirmed an aggregate $351 million award in favor of the Highland Floating Rate Opportunities Fund and NHF. Of this aggregate award, HFRO would receive a total of $289 million ($236.5 million in damages together with an additional $52.5 million in post-judgment interest) and NHF would receive a total of $62.3 million ($51 million in damages together with an additional $11.3 million in post-judgment interest).

You may want to recheck those annual results.

http://performance.morningstar.com/funds/cef/total-returns.action?t=NHF®ion=usa&culture=en_US

I wouldn't sell James Dondero and Mark Okada short.