N
euberger Berman Real Estate Securities Income Fund (NRO) has announced preliminary results of its transferable rights offering, which ran from January 23 to February 19. The over-subscribed offering allowed stockholders to purchase Common Stock by submitting three Rights at a subscription price of $3.25 per share, representing 90% of the Fund's net asset value per share at closing on the Expiration Date. The Offer is expected to result in the issuance of approximately 15,840,458 shares of Common Stock with anticipated gross proceeds of $51.5 million. The Fund will issue subscribed shares after completing the pro rata allocation of over-subscription shares and receiving stockholder payments, with any excess payments to be returned to investors.
The successful completion of NRO's rights offering represents a significant capital event for the fund, raising approximately $51.5 million through an oversubscribed issuance. The 90% NAV-based pricing mechanism at $3.25 per share effectively balanced the interests of existing shareholders while providing an attractive entry point for new investors. The strong demand suggests investors are seeking exposure to professional real estate portfolio management with income generation potential, especially as the real estate sector navigates through a period of adjustment to higher interest rates and evolving market dynamics.
The substantial capital raise will provide NRO with enhanced flexibility to capitalize on market opportunities, potentially including increased diversification across real estate subsectors, ability to take larger positions in high-conviction investments, enhanced bargaining power in structured deals, and additional buffer against market volatility. While the issuance will result in some dilution for non-participating shareholders, the oversubscription and pricing at 90% of NAV helps mitigate this impact. The pro-rata allocation process for over-subscription requests ensures equitable distribution of the new shares among interested investors.
The Fund's primary investment objective is high current income, with capital appreciation as a secondary objective. Under normal market conditions, the Fund invests at least 90% of its total assets in income-producing common equity securities, preferred securities, convertible securities and non-convertible debt securities issued by real estate companies, including real estate investment trusts. The Fund may invest up to 20% of its total assets in debt securities of any credit quality (including convertible and non-convertible debt securities) and up to 10% of its total assets in securities of non-U.S. issuers located in industrialized countries.
Neuberger Berman is an employee-owned, private, independent investment manager founded in 1939 with over 2,800 employees in 26 countries. The firm manages $508 billion of equities, fixed income, private equity, real estate and hedge fund portfolios for global institutions, advisors and individuals. Neuberger Berman's investment philosophy is founded on active management, fundamental research and engaged ownership.
