N-2/A 1 fp0030965_n2a.htm

1933 Act File No. 333-206988
1940 Act File No. 811-23098

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-2

[ ] REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

[ X ] PRE-EFFECTIVE AMENDMENT NO. 2

[ ] POST-EFFECTIVE AMENDMENT NO. __

[ ] REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

[ X ] AMENDMENT NO. 2

Bluerock Institutional Mortgage Income Fund

(fka Total Income + Mortgage Fund)

Principal Executive Offices

712 Fifth Avenue, 9th Floor

New York, NY 10019

1-844-819-8287

Agent for Service

The Corporation Trust Company

Corporation Trust Center

1209 Orange St.

Wilmington, DE 19801

Copies of information to:

JoAnn Strasser, Esq.

Thompson Hine LLP
41 South High Street, Suite 1700

Columbus, Ohio 43215
(614) 469-3200

Michael Konig, Esq.

Bluerock Real Estate, LLC

712 Fifth Avenue, 9th Floor

New York, NY 100191

(212) 843-1601

Approximate Date of Proposed Public Offering: As soon as practicable after the effective date of this Registration Statement.

If any securities being registered on this form will be offered on a delayed or continuous basis in reliance on Rule 415 under the Securities Act of 1933, other than securities offered in connection with a dividend reinvestment plan, check the following box.[ X ]

It is proposed that this filing will become effective when declared effective pursuant to Section 8(c).

CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933

Title of

Securities

Being

Registered

Amount

Being

Registered(1)

Proposed Maximum

Offering

Price Per

Unit

Proposed
Maximum

Aggregate Offering
Price(1)

Amount of

Registration

Fee(1)

Shares of Beneficial Interest

20,000,000

$25.00

$500,000,000

$58,100

(1)

A filing fee of $58,100 was previously paid to the Securities and Exchange Commission in connection with the registration of these shares.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

SUBJECT TO COMPLETION PRELIMINARY PROSPECTUS DATED [______ __], 2018

The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. The prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

PROSPECTUS

[____], 2018

Bluerock Institutional Mortgage Income Fund

Class A Shares ([___]) of Beneficial Interest

The Bluerock Institutional Mortgage Income Fund (the “Fund”) is a continuously offered, non-diversified, closed-end management investment company that is operated as an interval fund.

Investment Objective. The Fund’s primary investment objective is to generate attractive, long-term risk-adjusted returns, with an emphasis on current income with lower volatility and lower correlation to the broader markets.

Summary of Investment Strategy. The Fund pursues its investment objective by investing in institutional private debt investments consisting of secured first and second mortgage loans, secured mezzanine loans, secured construction or transitional loans, and preferred equity investments, and in public real estate-related debt instruments and securities. The Fund intends to invest in institutional debt secured by high quality, desirable properties sponsored by experienced, financially sound borrowers, and located primarily in major and select regional markets within the United States. The Fund will seek to build a diversified portfolio of real estate debt investments based on property type, geography, sponsorship, lifecycle and capital structure.

Because the Fund is newly organized, its shares have no pricing or performance history. For the reasons set forth below, an investment in the Fund’s shares is not suitable for investors who cannot tolerate risk of loss or who require liquidity, other than liquidity provided through the Fund’s repurchase policy:

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Pursuant to the U.S. Securities and Exchange Commission (“SEC”) rules and regulations, shares of the Fund will not be listed on any securities exchange or any secondary market, which makes them inherently illiquid.

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Shares of the Fund are not redeemable, but shall be subject to the repurchase offer provisions set forth below.

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Although the Fund will offer to repurchase at least 5% of each shareholder’s shares on a quarterly basis in accordance with the Fund’s repurchase policy, the Fund will not be required to repurchase shares at a shareholder’s option nor will shares be exchangeable for units, interests or shares of any other security.

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The Fund is not required to extend, and shareholders should not expect the Fund’s Board of Trustees (the “Board” or the “Trustees”) to authorize, repurchase offers in excess of 5% of outstanding shares per quarter.

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Regardless of how the Fund performs, an investor may not be able to sell or otherwise liquidate his or her shares whenever such investor would prefer and will be significantly limited in his or her ability to reduce his or her exposure on any market downturn.

Neither the SEC 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 concisely provides you the information that a prospective investor should know about the Fund before investing in the shares of the Fund that are being offered through this prospectus. You are advised to read this prospectus carefully and to retain it for future reference. Additional information about the Fund, including the Fund’s Statement of Additional Information (“SAI”), dated [ _________, 2018], has been filed with the SEC. Information regarding the Fund is available on the SEC’s website at http://www.sec.gov, including the SAI. 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. The table of contents of the SAI appears on page [39] of this prospectus. The SAI is incorporated by reference into this prospectus (legally made a part of this prospectus). The SAI, Fund annual and semi-annual reports and other information and shareholder inquiries regarding the Fund are available free of charge and may be requested by writing the Fund c/o DST Systems PO Box 218445 Kansas City, MO 64121-9445 (the “Transfer Agent”), by calling the Transfer Agent toll-free at 1-844-819-8287, or by visiting the Fund’s website at http://www.bluerockfunds.com.

The Advisor. The Fund’s investment advisor is Bluerock Credit Fund Advisor, LLC (the “Advisor”), an adviser registered under the Investment Advisers Act of 1940, as amended (the “Advisers Act”).

The Sub-Advisors. The Advisor has engaged RREEF America L.L.C. (“RREEF”) and Mercer Investment Management, Inc. (“Mercer”) (each a “Sub-Advisor” and collectively, the “Sub-Advisors”) both SEC registered investment advisers under the Advisers Act, to provide services for investment management of the Fund’s portfolio. RREEF was founded in 1975 and is one of the largest real estate investment managers serving institutional investors globally with more than 400 professionals and staff located in 27 locations around the world with over $57 billion in assets under management as of September 30, 2017. Mercer is a leading global institutional investment advisor serving sovereign wealth funds, pension plans, banks, family offices, insurance companies, endowments and foundations for more than 40 years and, together with its global investment management affiliates, has over $213 billion in assets under management as of September 30, 2017 and over $10.2 trillion in assets under advisement as of June 30, 2017.

Securities Offered. The Fund engages in a continuous offering of classes of shares of beneficial interest of the Fund, including Class A shares offered by this prospectus. The Fund has registered 20,000,000 shares, and is authorized as a Delaware statutory trust to issue an unlimited number of shares. The Fund is offering to sell, through its principal underwriter, ALPS Distributors, Inc. (the “Distributor”) on a continual basis under the terms of this prospectus, 20,000,000 shares of beneficial interest at net asset value (“NAV”) per share of the relevant share class, plus any applicable sales load. The initial NAV is $25.00 per Class A share. The Class A shares are subject to a maximum sales charge of 5.75%. The Fund also offers Class C, Class I, and Class L shares, each by a separate prospectus. The minimum initial investment by a shareholder for Class A shares is $2,500 for regular accounts and $1,000 for retirement plan accounts, and a minimum subsequent investment of at least $100 for regular accounts and $50 for retirement plan accounts.. The Distributor is not required to sell any specific number or dollar amount of the Fund’s shares, but will use best efforts to sell the shares. Monies received will be invested promptly and no arrangements have been made to place such monies in an escrow, trust or similar account. See “Plan of Distribution.”

The Fund’s shares have no history of public trading, nor is it intended that they will be listed on a public exchange at this time. No secondary market is expected to develop for the Fund’s shares, liquidity for the Fund’s shares will be provided only through quarterly repurchase offers for no less than 5% of the Fund’s shares and there is no guarantee that an investor will be able to sell all the shares that the investor desires to sell in the repurchase offer. Investing in the Fund’s shares involves substantial risks, including the risks set forth in the “Risk Factors” section of this prospectus.

TABLE OF CONTENTS

PROSPECTUS SUMMARY
SUMMARY OF FUND EXPENSES
FINANCIAL HIGHLIGHTS
USE OF PROCEEDS
THE FUND
INVESTMENT OBJECTIVE, POLICIES AND STRATEGIES
RISK FACTORS
MANAGEMENT OF THE FUND
DETERMINATION OF NET ASSET VALUE
CONFLICTS OF INTEREST
QUARTERLY REPURCHASE OF SHARES
DISTRIBUTION POLICY
DIVIDEND REINVESTMENT POLICY
U.S. FEDERAL INCOME TAX MATTERS
DESCRIPTION OF CAPITAL STRUCTURE AND SHARES
ANTI-TAKEOVER PROVISIONS IN DECLARATION OF TRUST
PLAN OF DISTRIBUTION
LEGAL MATTERS
REPORTS TO SHAREHOLDERS
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
ADDITIONAL INFORMATION
TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION
NOTICE OF PRIVACY POLICY & PRACTICES

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 SAI, particularly the information set forth below under the heading “Risk Factors.”

The Fund

Bluerock Institutional Mortgage Income Fund is a continuously offered, non-diversified, closed-end management investment company. See “The Fund.” The Fund is an interval fund that provides investor liquidity by offering to make quarterly repurchases of each class of shares at that class of shares’ net asset value, which will be calculated on a daily basis. See “Quarterly Repurchases of Shares” and “Determination of Net Asset Value.”

Investment Objective, Strategy and Policies

The Fund’s investment objective is to generate attractive, long-term risk-adjusted returns, with an emphasis on current income with lower volatility and lower correlation to the broader markets.

The Fund pursues its investment objective by investing primarily in a portfolio of institutional private and public real estate-related debt instruments and securities.

●

Private Real Estate Debt – The private real estate debt investments are expected to consist of secured first mortgage loans, secured second mortgage loans, secured mezzanine loans, secured construction or transitional loans, and preferred equity investments.

●

Public Real Estate Debt - The public real estate debt investments are expected to consist of mortgage backed securities (MBS), mortgage real estate investment trusts (Mortgage REITs), collateralized loan obligations (CLOs), and other commercial real estate (CRE) backed debt securities.

The Fund intends to originate or acquire investments generally secured by high quality, desirable properties sponsored by experienced, financially sound borrowers, and located primarily in major and select regional markets within the United States.

The Fund will seek to build a diversified portfolio of real estate debt investments based on property type, geography, sponsorship, lifecycle and capital structure. The Fund’s investments will focus on property types such as office, retail, industrial and multi-family, but may also include other property types located primarily within the United States generally in major and select regional markets.

The Fund may invest in real estate debt instruments and securities of any duration, maturity or structure, and the amount of the invested debt as a percentage of a particular property’s stabilized value (commonly known as the “loan to value ratio”) will generally range from 50% to 80%.

By investing in the Fund, the Advisor expects that the shareholders may realize the following potential benefits:

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Access to Attractive Risk-Adjusted Returns from Institutional Private Real Estate Debt Investments – The Fund enables investors to invest in institutional real estate private debt investments that may not otherwise be available to the typical retail investor due to the institutional focus of the Sub-Advisors. The Fund invests in institutional real estate private debt investments that offer attractive risk-return performance, with downside protection due to the value of the underlying real estate as collateral, and the availability of an equity cushion. In addition, many of the private real estate debt investments in which the Fund invests are typically intended for large, institutional investors due to the large minimum investment size, which would limit the ability of individual, non-institutional investors to participate in such investments.

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Access to Relationship-based Deal Flow and Directly Originated Debt – The Fund will have access to the Americas Real Estate Division of Deutsche Asset Management's substantial direct, long-standing relationships across the real estate industry including borrowers, brokers, financial institutions, lenders and other market participants, and the Americas Real Estate Division of Deutsche Asset Management to source transactions. This comprehensive access to sourcing may offer strategic benefits, including a more efficient deployment of capital and the potential to identify investment opportunities before they are broadly marketed, enabling the Fund to deliver attractive yields to investors.

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Access to RREEF’s Substantial Platform and Resources – The Fund will have access to the Americas Real Estate Division of Deutsche Asset Management’s established underwriting and structuring capabilities to execute its investment strategy, and to its substantial real estate platform, providing the Fund access to market data on a scale not available to many competitors. RREEF was founded in 1975 and is one of the largest real estate investment managers globally with more than 400 professionals and staff located in 27 locations around the world and over $57 billion in assets under management as of September 30, 2017.

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Access to Mercer’s Platform and Proprietary Intellectual Capital. The Fund will have access to Mercer’s proprietary intellectual capital, ongoing research, opinions and market data to assist the Advisor in setting strategy and portfolio planning to optimize risk-adjusted returns. Mercer is a leading global institutional investment advisor serving sovereign wealth funds, pension plans, banks, family offices, insurance companies, endowments and foundations for than 40 years, and, together with its global investment management affiliates, has over $213 billion in assets under management as of September 30, 2017 and over $10.2 trillion in assets under advisement as of June 30, 2017.

Under normal circumstances, the Fund invests at least 80% of its net assets (plus the amount of any borrowing for investment purposes) in both private and public real estate-related debt instruments and securities secured by real estate (“Mortgages”). The Fund may utilize leverage through borrowing for investment purposes or to satisfy repurchase requests. The Fund is deemed to concentrate its investments in the real estate industry because, under normal circumstances, it invests over 25% of its assets in real estate-related investments. The Fund’s 80% investment policy may be changed upon 60 days’ advance notice to shareholders. The Fund’s concentration policy is fundamental and may not be changed without shareholder approval. The Fund’s SAI contains a list of all of the fundamental and non-fundamental investment policies of the Fund, under the heading “Investment Objective, Strategies and Policies.”

Investment Advisor

Bluerock Credit Fund Advisor, LLC was formed on November 30, 2017 and is registered with the SEC as an investment adviser. The Advisor is a subsidiary of Bluerock Asset Management, LLC (“BAM”); BAM’s Managing Member is Bluerock Real Estate Holdings, LLC. Bluerock Real Estate Holdings, LLC and its affiliates (“Bluerock”) and principals manage over $4 billion in assets under management and have collectively sponsored or structured real estate transactions totaling approximately 35 million square feet and with approximately $10 billion in value.

Sub-Advisors

The Sub-Advisors are engaged by the Advisor and will be paid solely by the Advisor from its management fee.. Shareholders do not pay any Sub-Advisor directly.

The Advisor has engaged RREEF, an investment adviser registered with the SEC under the Advisers Act, as a Sub-Advisor to provide investment management of the Fund’s portfolio. RREEF serves investors and has over $57 billion in assets under management (as of September 30, 2017). RREEF, is a division of Deutsche Asset Management, one of the world’s leading investment management organizations, with over $800 billion in assets under management.

The Advisor has additionally engaged Mercer, also an SEC registered adviser, to provide sub-advisory services to the Fund. Mercer has been involved in a rigorous selection process leading to the selection of RREEF as a sub-advisor, and will assist the Advisor with research, strategy and portfolio planning for the Fund. Mercer, together with its global investment management affiliates, has over $213 billion in assets under management as of September 30, 2017 and over $10.2 trillion in assets under advisement (as of June 30, 2017).

Advisor Fees and Expenses

The Advisor is entitled to receive a monthly fee at the annual rate of 1.85% of the Fund’s daily net assets. The Advisor and the Fund have entered into an expense limitation and reimbursement agreement (the “Expense Limitation Agreement”) under which the Advisor has contractually agreed to waive its fees and to pay or absorb the ordinary operating expenses of the Fund (including offering and organizational expenses, but excluding taxes, interest, brokerage commissions, acquired fund fees and expenses and extraordinary expenses), to the extent that such expenses exceed 2.60% per annum of the Fund’s average daily net assets (the “Expense Limitation”) attributable to Class A shares. 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, subject to the limitations that: (1) the reimbursement for fees and expenses will be made only if payable not more than three years from the date which they were incurred; and (2) the reimbursement may not be made if it would cause the current, or then in effect Expense Limitation to be exceeded. The Expense Limitation Agreement will remain in effect at least until January 31, 2020, unless and until the Board of Trustees of the Fund (the “Board”) approves its modification or termination. After January 31, 2020, the Expense Limitation Agreement may be renewed at the Advisor’s and Board’s discretion. See “Management of the Fund.”

Administrator, Accounting Agent and Transfer Agent

ALPS Fund Services, Inc. (the “Administrator”) serves as the Fund’s administrator and accounting agent. DST Systems, Inc. (the “Transfer Agent”) serves as the transfer agent of the Fund. See “Management of the Fund.”

Distribution Fees

Class A shares are not subject to a Distribution Fee. See “Plan of Distribution.”

Closed-End Fund Structure

Closed-end funds differ from open-end mutual funds in that closed-end funds do not typically redeem their shares at the option of the shareholder. Closed-end fund shares typically trade in the secondary market via a stock exchange. However, unlike other closed-end funds, the Fund is an “interval” fund whose shares will not be listed on a stock exchange and therefore will not have a secondary market. Instead, the Fund will provide limited liquidity to shareholders by offering to repurchase a limited amount of the Fund’s shares (at least 5%) quarterly, which is discussed in more detail below. The Fund is subject to continuous asset in-flows, but not continuous out-flows.

Share Classes

The Fund offers four classes of shares: Class A, Class C, Class I, and Class L shares. An investment in any share class of the Fund represents an investment in the same assets of the Fund. However, the sales loads, purchase restrictions, and ongoing fees and expenses for each share class are different. The loads, fees and expenses for the Fund are set forth in “Summary of Fund Expenses.” If an investor has hired an intermediary and is eligible to invest in more than one class of shares, the intermediary may help determine which share class is appropriate for that investor. When selecting a share class, you should consider which share classes are available to you, how much you intend to invest, how long you expect to own shares, and the total costs and expenses associated with a particular share class. The Fund offers Class I, Class C, and Class L shares each by a separate prospectus.

Each investor’s financial considerations are different. You should speak with your financial advisor to help you decide which share class is best for you. Not all financial intermediaries offer all classes of shares. If your financial intermediary offers more than one class of shares, you should carefully consider which class of shares to purchase.

Repurchases of Shares

The Fund is an interval fund and, as such, has adopted a fundamental policy to make quarterly repurchase offers, at net asset value, of no less than 5% of the Fund’s shares outstanding. 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% 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.”

Investor Suitability

An investment in the Fund involves a considerable amount of risk. It is possible that you will lose some or all of your money invested. An investment in the Fund is suitable only for investors who can bear the risks associated with the limited liquidity of the shares and should be viewed as a long-term investment. 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. An investment in the Fund should not be viewed as a complete investment program.

Summary of Risks

Investing in the Fund involves risks, including the risk that you may receive little or no return on your investment, and that you may lose part or all of your investment. Before investing you should consider carefully the risks that you assume when you invest in the Fund’s shares. See “Risk Factors.”

Market Risk. An investment in the Fund’s shares is subject to investment risk, including the possible loss of the entire principal amount invested. The value of Fund investments, like other market investments, may move up or down, sometimes rapidly and unpredictably, which will subject shareholders to risk. The value of your shares in the Fund at any point in time may be worth less than the value of your original investment, even after taking into account any reinvestment of dividends and distributions.

Concentration Risk. Because the Fund will concentrate its investments in the real estate industry, the Fund will be subject to greater volatility risk than a fund that is not concentrated in a single industry. The Fund’s real estate-related investments may also be concentrated in regions or states, which exposes the Fund to region- or state-specific economic risks.

Real Estate Industry Risk. The Fund expects to invest substantially all of its assets in real estate-related debt instruments and securities, primarily in connection with real estate located within the United States. Therefore, the performance of its portfolio will be significantly impacted by the performance of the U.S. real estate market in general. Real estate market performance is affected by a wide variety of factors, including: (i) changes in general economic and market conditions; (ii) changes in the value of real estate properties; (iii) risks related to local economic conditions, overbuilding and increased competition; (iv) increases in operating expenses including property taxes; (v) changes in zoning laws; (vi) casualty and condemnation losses; (vii) regional variations in rental income, property values and demand trends on the part of tenants; (viii) the availability of financing, (ix) changes in interest rates and (x) changes in availability of leverage on loans for or secured by real estate. Changes in federal tax laws may have a significant impact on the U.S. real estate industry in general, particularly in the geographic markets targeted by Fund investments.

Management Risk. Investments decisions regarding the relative attractiveness, value and potential appreciation of and returns on a particular investment, or allocation decisions with respect to the Fund’s portfolio, may prove to be incorrect, may not produce the desired results and/or may result in losses to the Fund and its shareholders.

Non-Diversification Risk. As a non-diversified fund, the Fund may invest more than 5% of its total assets in the securities of one or more issuers. The Fund’s performance may be more sensitive to any single economic, business, political or regulatory occurrence than the value of shares of a diversified investment company.

Debt Securities and Interest Rate Risks. Because the Fund invests primarily in debt instruments and securities, the value of your investment in the Fund may fluctuate with changes in interest rates. Typically, a rise in market interest rates will cause a decline in the value of fixed rate or other debt instruments. For more than the past five years, market interest rates have been at historically low levels, both in the United States and globally. It is difficult if not impossible to forecast future interest rates, but given their recent, historically low levels, there is a heightened risk that they may increase, perhaps substantially and perhaps in the near future. If market interest rates increase, there is a significant risk that the value of the Fund’s investment in fixed rate real estate debt securities may fall, and that it may be more difficult for the Fund to raise capital. Related risks include credit risk (the debtor may default) and prepayment risk (the debtor may pay its obligation early, reducing the amount of interest payments).

Secured Debt Risk. Secured debt including Mortgages typically will be secured by pledges of collateral from the borrower in the form of tangible assets, including real estate. Secured debt holds the most senior position in the capital structure of a borrower. Secured debt in most circumstances is fully collateralized by assets of the borrower. Thus, it is repaid before unsecured debt. Substantial increases in interest rates may cause an increase in loan defaults as borrowers may lack resources to meet higher debt service requirements. Moreover, the security for the Fund’s secured debt investments may not be recognized for a variety of reasons, including the failure to make required filings by lenders, trustees or other responsible parties and, as a result, the Fund may not have priority over other creditors as anticipated.

Credit Risk; Junior Tranches. It is possible that the Fund’s borrowers or issuers may not make scheduled interest and/or principal payments on their loans and/or debt securities, which may result in losses or reduced cash flow to the Fund, either or both of which may cause the Net Asset Value (NAV) of, or the distributions by, the Fund to decrease. In addition, the credit quality of securities held by the Fund may fall if an issuer’s financial condition deteriorates. This also may negatively impact the value of and the Fund’s returns on its investment in such securities. Also, the Fund expects to allocate a portion of its assets to investments in junior tranches of debt, such as subordinated notes (sometimes generically referred to as “B Notes”) and mezzanine loans. Generally speaking, such junior level investments are riskier and therefore subject to a higher level of risk of non-payment or default, even if the more senior levels of debt related to such investment are performing according to their terms. Thus, the Fund’s investments in junior tranches of debt will be subject to amplified credit risks.

Prepayment Risk. Debt securities may be subject to prepayment risk because borrowers are typically able to repay their debt obligations prior to maturity principal. Consequently, a debt security’s maturity may be longer or shorter than anticipated. When interest rates fall, debt obligations tend to be refinanced or otherwise paid off more quickly than originally anticipated. If that occurs with respect to the Fund’s investments, the Fund may have to invest the prepaid proceeds in securities with lower yields. When interest rates rise, obligations will tend to be paid off by the obligor more slowly than anticipated, preventing the Fund from reinvesting at higher comparable or yields. For certain investments, lower-than-expected prepayment rates may expose investments in the junior tranches of MBS, CLOs or other CREs to credit risks for longer periods of time.

Direct Lending Risk. To the extent the Fund is the sole lender in privately offered debt, it may be solely responsible for the expense of servicing that debt, including, if necessary, taking legal actions to foreclose on any security instrument or securing the debt (e.g., the mortgage or, in the case of a mezzanine loan, the pledge). This may increase the risk and expense to the Fund compared to syndicated or publicly offered debt.

Direct Origination Risk. A portion of the Fund’s investments may be originated through co-investments. The results of the Fund’s operations depend on several factors, including the availability of opportunities for the origination or acquisition of target investments, the level and volatility of interest rates, the availability of adequate short and long-term financing, conditions in the financial markets and economic conditions.

Conflicts of Interest Related to Direct Origination. Under the Investment Company Act of 1940, as amended (the “1940 Act”), the Fund is not permitted to engage in related party transactions with its affiliates. As such, to address these risks, the Fund has implemented certain written policies and procedures to ensure the Fund will not enter into any agreement unless and until it is satisfied that doing so will not raise concerns under the 1940 Act, and address potential conflicts of interest

MBS Risk. When the Fund invests in mortgaged-backed securities (MBS), the Fund may be subject to a heightened level of structure/default risk. For example, if an underlying MBS borrower is unable to fully support all of its interest or principal payment obligations, the assets backing those securities may not be sufficient to support payments on all tranches of the MBS securities attributed to that borrower. Accordingly, investments by the Fund in junior tranches of MBS will be subject to a higher risk of default than investments in more senior tranches.

Mortgage REIT Risk. Mortgage real estate investment trusts (REITs) are exposed to risks specific to the real estate market, including, among others, credit risk, prepayment risk, interest rate risk and leverage risk. Additionally, the value of the Fund’s investments in REITs may change in response to changes in the real estate market such as declines in the value of real estate, lack of available capital or financing opportunities, and increases in property taxes or operating costs. Shareholders of the Fund will indirectly be subject to the fees and expenses of the individual REITs in which the Fund invests.

CLO Risk. Collateralized Loan Obligations (CLO) are securities backed by an underlying portfolio of debt obligations. CLOs issue classes or “tranches” that vary in risk and yield and may experience substantial losses due to actual defaults, decrease of market value due to collateral defaults and removal of subordinate tranches, market anticipation of defaults and investor aversion to CLO securities as a class. The risks of investing in CLOs depend largely on the tranche invested in and the type of the underlying debts and loans in the tranche of the CLO, in which the Fund invests. CLOs also carry risks including, but not limited to, interest rate risk and credit risk.

Defaulted Securities Risk. Loans in which the Fund invests, including mortgage loans in which the Fund invests through MBS or other structured debt, may fall into default. Defaulted loans/securities provide less liquidity to the Fund than performing loans and, for extended periods of time, may have a limited or no secondary market. Defaulted loans/securities may have low recovery values and borrowers or issuers in default of their debt obligations may seek bankruptcy protection, which may hinder or delay resolution of the Fund’s collection efforts.

Preferred Securities Risk. There are various risks associated with investing in preferred securities, including credit risk, interest rate risk, deferral and omission of distributions, subordination to bonds and other debt securities in an issuer’s capital structure, limited liquidity, limited voting rights and special redemption rights. Securities with longer maturities tend to be more sensitive to interest rate changes. Holders of preferred securities may not receive dividends, or the payment can be deferred for some period of time. In bankruptcy, holders of debt are generally paid before the holders of preferred securities.

Issuer/Borrower Risk. The Fund’s investments in debt securities issued by a specific issuer or invested in project-specific direct loans may perform differently than the performance of credit markets in general, and therefore may be more volatile. Issuer-specific risks may include: the risk of poor management performance, excessive financial leverage, and reduced demand for the issuer’s properties and/or services. A substantial portion of the Fund’s assets are expected to be invested in project-specific direct loans. Typically, direct loans are secured only by the underlying project and are not secured or collateralized by securities or principal repayment guaranties issued by the borrower’s parent company. Project-specific borrowers, as compared to corporate borrowers, may be more likely to suffer abrupt financial reversals due to (i) adverse changes in their project’s local market conditions (ii) inadequate capitalization and/or access to working capital financing or (iii) lack of access to refinancing or other credit lines. Additionally, in direct lending, borrowers experiencing financial difficulties could seek bankruptcy protection, which may limit or delay the Fund’s ability to obtain judgment or collect on defaulted loans. Compared to investments in debt securities issued by large capitalization companies, the Fund’s investments in project-specific loans are more likely to experience greater changes in market value, and greater potential for losses.

Correlation Risk. Pursuant to the Fund’s investment objective, the Fund seeks to produce returns with lower correlation to the broader financial markets. There is no guaranty that the Fund will succeed in achieving its investment objective or that the Fund will outperform the broader financial markets.

Liquidity Risk – Quarterly Repurchases. The Fund’s shares are not listed on any securities exchange and are not publicly traded. There currently is no secondary market for the Fund’s shares and the Advisor does not expect that a secondary market will develop. Limited liquidity is provided to shareholders only through the Fund’s quarterly repurchase offers, for no less than 5% of the Fund’s shares outstanding at net asset value. There is no guarantee that all shareholders seeking liquidity will be able to sell all of the shares that they desire to sell in a quarterly repurchase offer.

Leveraging Risk. The Fund is authorized to use leverage for investment purposes and to satisfy redemption requests. The use of leverage will cause the Fund to incur additional expenses and may significantly magnify the Fund’s losses in the event of adverse performance of the Fund’s underlying investments.

Repurchase Policy Risk. Quarterly repurchases by the Fund of its shares typically will be funded from available cash or sales of portfolio securities. However, payment for repurchased shares may require the Fund to liquidate portfolio holdings early or at inopportune times, potentially resulting in losses, and may increase the Fund’s portfolio turnover. The Advisor may 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 any such 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.

Repurchase 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.

Distribution Policy Risk. The Fund’s distribution policy is not designed to generate, and is not expected to result in, distributions to investors that equal a fixed percentage of the Fund’s current net asset value per share. Shareholders should not assume that the source of a distribution from the Fund is net profit. Shareholders should note that return of capital will reduce the tax basis of their shares and potentially increase the taxable gain, if any, upon disposition of their shares.

Minimal Capitalization Risk. The Fund is not obligated to raise any specific amount of capital prior to commencing operations. There is a risk that the amount of capital actually raised by the Fund through the offering of its shares may be insufficient to achieve profitability or allow the Fund to realize its investment objective. Therefore, an inability to raise substantial capital may significantly adversely affect the Fund’s financial condition, liquidity and results of operations, as well as its ability to comply with regulatory requirements. Further, if the Fund fails to achieve its estimated size and the Expense Limitation is not renewed, future expenses will be higher than expected.

No Operating History. The Fund is a closed-end investment company with no history of operations for potential investors to review. If the Fund commences operations under inopportune market or economic conditions, it may not be able to achieve its investment objective.

U.S. Federal Income Tax Matters

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 so qualify, it must meet an income and asset diversification test each year. If the Fund so qualifies and satisfies the applicable 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 they do not meet certain distribution requirements by the end of each calendar year. The Fund anticipates meeting these distribution requirements. See “U.S. Federal Income Tax Matters.”

Distribution Policy

The Fund’s distribution policy is to accrue dividends daily (Saturdays, Sundays and holidays included) and to distribute as of the last business day of each month. This distribution policy is subject to change. The level of monthly distributions (including any return of capital) is not fixed and all or a portion of a distribution may consist of a return of capital. Shareholders should not assume that the source of a distribution from the Fund is net profit.

Unless a shareholder elects otherwise, the shareholder’s distributions will be reinvested in additional shares of the same class 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). Distributions are made at the class level, so they may vary from class to class within the Fund. See “Dividend Reinvestment Policy.”

Custodian

UMB Bank, N.A (“Custodian”), with principal offices at 1010 Grand Boulevard, Kansas City, Missouri 64106, serves as the Fund’s custodian. See “Management of the Fund.”

SUMMARY OF FUND EXPENSES

Shareholder Transaction Expenses	Class A
Maximum Sales Load (as a percent of offering price)	5.75%
Early Withdrawal Charges (as a percent of original purchase price)	None⁴
Annual Expenses (as a percentage of average net assets attributable to shares)
Management Fees	[1.85]%
Other Expenses ¹	[ ]%
Shareholder Servicing Expenses	0.25%
Distribution Fee	0.00%
Remaining Other Expenses	[ ]%
Acquired Fund Fees and Expenses ^{1, 2}	[ ]%
Total Annual Expenses ¹	[ ]%
Fee Waiver and Reimbursement ^1,3	[ ]%
Total Annual Expenses (after fee waiver and reimbursement) ¹	[ ]%

Estimated for the current fiscal year.

Acquired Fund Fees and Expenses are the indirect costs of investing in other investment companies. These indirect costs may include performance fees paid to the acquired fund’s advisor or its affiliates. It does not include brokerage or transaction costs incurred by the acquired funds. The operating expenses in this fee table will not correlate to the expense ratio in the Fund’s financial highlights because the financial statements include only the direct operating expenses incurred by the Fund.

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 annual operating expenses of the Fund (including offering and organizational expenses, but excluding taxes, interest, brokerage commissions, acquired fund fees and expenses and extraordinary expenses) to the extent that they exceed 2.60% per annum of the Fund’s average daily net assets attributable to Class A shares. 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, subject to the limitations that: (1) the reimbursement for fees and expenses will be made only if payable not more than three years from the date in which they were incurred; and (2) the reimbursement may not be made if it would cause the expense limitation in effect at the time the expenses were waived or absorbed to be exceeded. The Expense Limitation Agreement will remain in effect at least until January 31, 2020, unless and until the Board approves its modification or termination. This agreement may be terminated only by the Fund’s Board of Trustees. See “Management of the Fund.”

Class A shareholders who tender for repurchase Class A shares that were purchased in amounts of $1,000,000 or more that have been held less than one year (365 days) from the purchase date will be subject to an early withdrawal charge of 1.00% of the original purchase price.

The above Summary of Fund Expenses table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. More information about management fees, fee waivers and other expenses is available in Management of the Fund starting on page [__] of this prospectus.

(the Example assumes the Fund’s Expense Limitation Agreement will remain in effect through January, 2020):

Share Class	1 Year	3 Years
Class A Shares

Shareholders who choose to participate in repurchase offers by the Fund will not incur a repurchase fee, unless the repurchase is less than 365 days after purchase. 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 the Administrator, currently $15. 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.

FINANCIAL HIGHLIGHTS

Because the Fund is newly formed and has no performance history as of the date of this Prospectus, a financial highlights table for the Fund has not been included in this Prospectus.

USE OF PROCEEDS

The net proceeds of the Fund’s continuous offering of shares, after payment of the sales load (if applicable) and other associated expenses, will be invested in accordance with the Fund’s investment objective and policies (as stated below) as soon as practicable after receipt. The Fund pays organizational costs and its offering expenses incurred with respect to its initial and continuous offering. Pending investment of the net proceeds in accordance with the Fund’s investment objective and policies, the Fund will invest in money market or short-term fixed-income mutual funds. Investors should expect, therefore, that before the Fund has fully invested the proceeds of the offering in accordance with its investment objective and policies, the Fund’s assets would earn interest income at a modest rate. While the Fund does not anticipate a delay in the investment of net proceeds from investors, the Fund will seek shareholder approval if the net proceeds are not invested within six months of the Fund’s initial offering in accordance with the rules under the 1940 Act.

THE FUND

The Fund is a continuously offered, non-diversified, closed-end management investment company that is operated as an interval fund. The Fund was organized as a Delaware statutory trust on September 11, 2015. The Fund’s principal office is located at 712 Fifth Avenue, 9th Floor, New York, NY 10019, and its telephone number is (212) 843-1601.

INVESTMENT OBJECTIVE, POLICIES AND STRATEGIES

Investment Objective and Policies

The Fund’s investment objective is to generate attractive, long-term risk-adjusted returns, with an emphasis on current income with lower volatility and lower correlation to the broader markets.

The Fund intends to invest in debt secured by high quality, desirable properties sponsored by experienced, financially sound borrowers, and located primarily in major and select regional markets within the United States. The Fund will seek to build a diversified portfolio of public and private real estate debt investments based on property type, geography, sponsorship, lifecycle and capital structure. The Fund pursues its investment objective by investing primarily in a portfolio of institutional private and public debt secured by real estate, as defined below:

●

Private Real Estate Debt Investments – The Fund’s private real estate debt investments are expected to consist of secured first mortgage loans, secured second mortgage loans, secured mezzanine loans, secured construction or transitional loans, and preferred equity investments.

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Public Real Estate Debt Investments – The Fund’s public real estate debt investments are expected to be primarily commercial and residential mortgage backed securities (MBS), mortgage real estate investment trusts (Mortgage REITs), collateralized loan obligations (CLOs), and other commercial real estate (CRE) backed debt securities.

The Advisor Expects that the Fund’s Shareholders may realize the following potential benefits:

●

Access to Attractive Risk-Adjusted Returns from Institutional Private Real Estate Debt Investments – The Fund enables investors to invest in institutional real estate private debt investments that may not otherwise be available to the typical retail investor due to the institutional focus of the Sub-Advisors. The Fund invests in institutional real estate private debt investments that offer attractive risk-return performance with downside protection due to the value of the underlying real estate as collateral, and the availability of a an equity cushion. In addition, many of the private real estate debt investments in which the Fund invests are typically intended for large, institutional investors due to the large minimum investment size, limiting the availability to individual, non-institutional investors.

●

Access to Relationship-based Deal Flow and Directly Originated Debt – The Fund will have access to the Americas Real Estate Division of Deutsche Asset Management’s substantial direct, long-standing relationships across the real estate industry including borrowers, brokers, financial institutions, lenders and other market participants, including the real estate equity transaction teams to source transactions. This comprehensive access to sourcing may offer strategic benefits including a more efficient deployment of capital and the identification of certain investment opportunities before they are presented to the broader market, enabling the Fund to deliver attractive yields to investors.

●

Access to RREEF’s Substantial Platform and Resources – The Fund will have access to the Americas Real Estate Division of Deutsche Asset Management’s established underwriting and structuring capabilities to execute its investment strategy, and to its substantial real estate platform which provides the Fund access to market data on a scale not available to many competitors. RREEF was founded in 1975 and is one of the largest real estate investment managers globally with more than 400 professionals and staff located in 27 locations around the world and over $57 billion in assets under management as of September 30, 2017.

●

Access to Mercer’s Platform and Proprietary Intellectual Capital. The Fund will have access to Mercer’s proprietary intellectual capital, ongoing research, opinions and market data to assist the Advisor in setting strategy and portfolio planning to optimize risk-adjusted returns. Mercer Investment Management is a leading global institutional investment advisor serving sovereign wealth funds, pension plans, banks, family offices, insurance companies, endowments and foundations for more than 40 years, and, together with its global investment management affiliates, has over $213 billion in assets under management as of September 30, 2017 and over $10.2 trillion in assets under advisement as of June 30, 2017.

Fund’s Target Investment Portfolio

The Advisor and RREEF intend to execute the Fund’s investment strategy primarily by investing in a diverse portfolio of institutional private and public real estate debt investments and securities. The Fund intends to invest in debt secured by high quality, desirable properties sponsored by experienced, financially sound borrowers, and located primarily in major and select regional markets within the United States. With respect to selecting investments, the Advisor and RREEF will consider various inputs regarding the potential borrower, including relevant experience, equity commitment, financial strength and business plan, among other factors, and will pursue a value-driven approach focused on real estate supply and demand fundamentals to underwriting and diligence.

The Fund will seek to build a diversified portfolio of public and private real estate-related debt investments based on property type, geography, sponsorship, lifecycle and capital structure. The Fund’s investments will focus on property types such as office, retail, industrial and multi-family, but may also include other property types located primarily within the United States generally in major and select regional markets. Average loan amounts are generally expected to be a minimum of $10 million, with durations generally of ten years, at interest rates that may be fixed or floating.

The Fund may invest in a variety of investments in pursuing its investment objective, including those listed below.

Private Real Estate Debt Investments:

●

First Mortgage Loans: The debt that is most senior in the capital stack and is secured by a first mortgage recorded against the project borrower’s underlying real estate interest. Investments in first mortgage loans (sometimes also referred to a “A Loans” or “A Notes”) are sometimes shared by multiple lenders, including on a pari passu or “horizontal” basis, or arranged by seniority on a “vertical” basis as through an A Note/B Note structure (see B Note below). First mortgage loans are senior in repayment priority to second mortgage loans B Notes, Mezzanine Loans, unsecured debt, preferred equity investments and common equity investments.

●

Second Mortgages or B-Notes: The debt that is next most senior in the capital stack is secured by second mortgages recorded against the project borrower’s underlying real estate interest. Investments in second mortgage loans are junior in priority to first mortgage loans. “B Notes” are investments in first or second mortgages that are structured in a manner to make the B Note portion junior in payment priority to a more senior (i.e., so-called “A Note”) tier of payment rights in the same mortgage. B Notes are evidenced by promissory notes that are separate from and subordinate to A Notes.

●

Mezzanine Loans: Mezzanine loans are senior to preferred equity investments and common equity investment, but subordinate to all mortgage loans. Mezzanine Loans are generally secured by a pledge of the ownership interests of the owner of the mezzanine borrower, rather than by a lien recorded against the borrower’s real estate.

●

Construction or Transitional Loans: Construction or Transitional Loans to borrowers whose the underlying real estate interest will serve as collateral as a property is undergoing a repositioning, development or value enhancement strategy. These loan investments carry additional risk, as repayment will depend on the borrower’s ability to successfully execute its particular repositioning, development or value enhancement strategy.

●

Preferred Equity Investments: Preferred Equity Investments are often considered the equivalent of debt investments because they often require regularly scheduled payments, carry payment priority over returns that may be made to the common equity owners of the underlying real estate project, and often carry enhanced control rights under the operating, partnership or other ownership agreement that establishes management control and the preferred equity investor’s priority and control rights. Preferred equity investments are junior in priority to mezzanine loans.

Public Real Estate Debt Investments:

●

Mortgage Backed Securities: Mortgage-backed securities (MBS) are a type of fixed income security that is secured by either (a) a mortgage on an individual property or (b) a pool of mortgages on numerous commercial and/or residential properties. Returns from MBS composed of non-performing loans are highly sensitive to loans becoming re-performing.

●

Agency Commercial Mortgage Backed Securities: Agency Commercial Mortgage Backed Securities are a specific sub-category of Commercial Mortgage-Backed Securities (CMBS) that is focused on the multi-family real estate sector. These securities are issued by the Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac).

●

Mortgage REITs: A Mortgage REIT is a real estate investment trust that invests in mortgages or mortgage backed securities (MBS), principally focused on investing in commercial and residential mortgages and mortgage backed securities. Mortgage REITs are typically listed on major stock exchanges, similar to other public stocks. Shares may also be purchased in a mutual fund or exchange-traded fund (ETF) format.

Commercial Real Estate – Collateralized Loan Obligation (CRE-CLO): Commercial Real Estate – Collateralized Loan Obligations (CRE-CLO), similar to mortgage backed securities are a type of fixed income security that is secured by a pool of mortgages on numerous commercial properties. Typically the underlying loans supporting a CRE-CLO floating rate are shorter duration in nature than other CMBS investments.

Exchange Traded Fund: An exchange-traded fund (ETF) is an investment fund traded on stock exchanges. An ETF holds assets such as stocks, commodities, or bonds. Most ETFs track an index, such as a stock index or bond index. ETFs are viewed as attractive as investments because of their liquidity, low costs, tax efficiency, and stock-like features.

Investment Process

The Fund is supported by the full breadth and depth of the RREEF team, along with the RREEF’s Investment Committee of 9 senior real estate investment professionals, and the Advisor’s Investment Committee of five senior real estate professionals, which provide review and approvals at each stage of the investment process below, along with the resources, research and opinions of Mercer, in its investment process.

Idea Generation. RREEF has a robust Research & Strategy team that consists of 19 professionals located in six offices around the globe, including the Americas, Europe and Asia. The Research & Strategy team generate a set of viewpoints for the purpose of focusing investment, management and divestment actions on the set of opportunities that is expected to provide the most attractive returns and to mitigate risk. These viewpoints are reviewed and approved by RREEF’s Investment Committee.

Portfolio Planning. The Advisor and RREEF teams, including Research & Strategy, the debt investments team, performance and risk management and the broader platform, integrate these viewpoints along with ongoing research, opinions and market data from Mercer, into a specific investment strategy and strategic plan to fulfill the Fund’s primary investment objective to generate attractive, long-term risk-adjusted returns, with an emphasis on current income with lower volatility and lower correlation to the broader markets. Several factors are considered in portfolio planning including, but not limited to, the Fund’s objectives and constraints, risk-return expectations, current Fund investment allocations and the overall market outlook, all of which are reviewed and approved by RREEF’s Investment Committee.

Allocations between private and public debt investments are overseen by RREEF and the Advisor’s Investment Committee and may vary over time in response to changes in market conditions, with a focus on managing volatility and maximizing risk-adjusted returns.

Portfolio Construction. The Fund’s Portfolio Managers work closely with other RREEF’s professionals to target the investment needs of the Fund in sourcing transactions and screening the investment pipeline in an effort to shape the desired target portfolio.

●

Transaction Sourcing and Origination. It is anticipated that the main sources of deal flow for the Fund will be direct, long-standing relationships across the real estate industry including borrowers, brokers, financial institutions, lenders and other market participants and the broader RREEF real estate platform, including its transactions teams. This approach to sourcing transactions will offer strategic benefits to the Fund including a potentially quicker deployment of capital and the potential identification of certain investment opportunities before they are presented more broadly to the market.

●

Transaction Screening. The transaction screening process generally starts with a pipeline of potential transactions that are reviewed by RREEF. All potential investment opportunities will be subject to preliminary analysis, which will include reviewing the property, sponsor, market, structure, terms and the risk and return characteristics to assess suitability for the Fund, including diversification, appropriate risk level, returns, property type, loan type and geographic location.

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Underwriting and Due Diligence. RREEF pursues a value-driven approach focused on real estate supply and demand fundamentals to underwriting and diligence. The Sub-Advisor will complete an underwriting for each proposed transaction during the process with a focus on stressed in-place cash flows, debt yields, debt service coverage ratios, loan-to-values, property quality and market and sub-market dynamics, and generally including, but not limited to, (a) performing property analysis and valuation; (b) developing key economic and legal deal terms and structuring; (c) identifying and addressing key issues and validate assumptions; (d) evaluating submarket, regional and property market trends as well as the general economic climate; (e) evaluating reputation, track record and objectives of deal sponsor; (f) analyzing competition and business plan objectives; (g) evaluating legal, tax, regulatory and accounting aspects of investment structure; (h) performing credit analysis; (i) reviewing and approving all third party reports, contracts, and all other due diligence materials; (j) conducting site visit; and (k) analyzing the portfolio impact of the potential investment.

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Transaction Approval and Execution. RREEF will prepare a memorandum detailing its analysis of the proposed investment and present the transaction to both the RREEF and the Advisor’s Investment Committees for approval. Each investment is reviewed and evaluated for its risk/return profile and impact on the portfolio’s geographic and sector diversification, credit characteristics and current and total return. If final approval of the investment is given by both Investment Committees, RREEF will be responsible to coordinate and complete all aspects of closing and funding within the scope of approval that was given.

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Asset Management and Realizations. After the closing and funding of an approved transaction, RREEF will actively manage it and the Fund’s other investments. RREEF’s senior personnel are highly experienced in loan and securities asset management. From the closing of a loan or investment through its final repayment, RREEF’s dedicated asset management team will be in regular contact with borrowers, servicers and/or local market experts, monitoring performance of the collateral, anticipating property and market issues, and enforcing rights and remedies when appropriate. The Advisor believes the Fund’s access to the RREEF’s real estate platform, and the detailed market information it provides, as well as to Mercer’s experience and expertise, will provide the Fund with an advantage in regard to the active management of the Fund’s loans and investments. Investment realization opportunities are continually monitored and evaluated to seek to maximize returns as well as to meet the Fund’s investment objective including appropriate risk management, subject to RREEF’s Investment Committee approval.

Risk and Performance Management. RREEF will have the lead role in regard to performing ongoing portfolio and asset level risk and performance management, including real time monitoring of the underlying collateral performance to assess potential risks, forecasting and measuring financial and operational results, performing collateral analyses and property market reviews and taking strategic actions when required to maximize returns or mitigate risks. Mercer will also provide ongoing risk factor and performance monitoring including views on the current and future economic environment, outlook for real estate in general and particular asset classes, evaluation of the U.S. real estate debt markets, its assessment of the risk-reward profile of potential investments, and availability of competitive debt offerings. In addition, Mercer as Sub-Advisor will provide ongoing oversight and due diligence of RREEF, including a thorough periodic analysis of the organization, debt team, process and analysis of performance including investment performance analysis and reporting, investment strategy and portfolio construction, and market competitiveness.

Additional Information Regarding Investment Strategy

The Fund may, from time to time, take defensive positions that are inconsistent with the Fund’s principal investment strategy in attempting to respond to adverse market, economic, political or other conditions. During such times, the Advisor or RREEF 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. In these and in other cases, the Fund may not achieve its investment objective. RREEF may invest the Fund’s cash balances in any investments it deems appropriate. The Advisor and RREEF expect 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. Many of the considerations entering into recommendations and decisions of the Advisor, RREEF and the Fund’s portfolio managers are subjective.

The frequency and amount of portfolio purchases and sales (known as the “portfolio turnover rate”) will vary from year to year. It is not anticipated that the Fund’s portfolio turnover rate would exceed 100% under normal market conditions. The Fund’s portfolio turnover rate will not be a limiting factor with regard to when RREEF deem portfolio changes appropriate. Although the Fund generally does not intend to trade for high-frequency short-term profits, securities may be sold without regard to the length of time held when, in the opinion of the Advisor or RREEF, 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 or placement agent commissions and may generate short-term capital gains taxable as ordinary income. See “Tax Status” in the Fund’s SAI.

There is no assurance 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.”

Investment Policies

The Fund is deemed to concentrate its investments in the real estate industry because, under normal circumstances, it invests over 25% of its assets in real estate-related investments. The Fund’s 80% investment policy may be changed upon 60 days’ advance notice to shareholders. The Fund’s concentration policy is fundamental and may not be changed without shareholder approval. The Fund’s SAI contains a list of all of the fundamental and non-fundamental investment policies of the Fund, under the heading “Investment Objective, Policies and Strategies.”

RISK FACTORS

An investment in the Fund’s shares is subject to risks. The value of the Fund’s investments will increase or decrease based on changes in the prices of the investments it holds. This will cause the value of the Fund’s shares to increase or decrease. You could lose money by investing in the Fund. By itself, the Fund does not constitute a balanced investment program. Before investing in the Fund you should consider carefully the following risks. There may be additional risks that the Fund does not currently foresee or consider material. You may wish to consult with your legal or tax advisors before deciding whether to invest in the Fund.

Market Risk. An investment in the Fund’s shares is subject to investment risk, including the possible loss of the entire principal amount invested. An investment in the Fund’s shares represents an indirect investment in the real estate-related debt securities and other assets held by the Fund. The value of these securities, like other market investments, may move up or down, sometimes rapidly and unpredictably, which will subject shareholders to risk.

Concentration Risk. The Fund intends to concentrate its investments in the real estate industry, and invest more than 25% of its assets in real estate-related debt investments. Therefore, the Fund will be subject to greater volatility risk than registered funds that are not concentrated in a single industry. In addition, the Fund’s investments may be concentrated in specific regions or states within the United States, which would expose the Fund to greater region- or state-specific risks than if the Fund were to invest throughout the country or internationally.

Real Estate Industry Risk. The Fund expects to invest substantially all of its assets in real estate related debt securities, primarily within the United States. Therefore, the performance of its portfolio will be significantly impacted by the performance of the real estate market in general and the Fund may experience more volatility and be exposed to greater risk than a more diversified portfolio. The Fund will be impacted by factors particular to the real estate industry including, among others: (i) changes in general economic and market conditions; (ii) changes in the value of real estate properties; (iii) risks related to local economic conditions, overbuilding and increased competition; (iv) increases in operating expenses including property taxes and; (v) changes in zoning laws; (vi) casualty and condemnation losses; (vii) variations in rental income, neighborhood values or the appeal of property to tenants; (viii) the availability of financing (ix) changes in interest rates and (x) changes in availability of leverage on loans for or secured by real estate. Changes in federal tax laws which are being debated or pending as of the date of this prospectus may have a significant impact on the U.S. real estate industry in general, particularly in the geographic markets targeted by Fund investments. The value of securities in the real estate industry may go through cycles of relative under-performance and over-performance in comparison to equity securities markets in general.

There are also special risks associated with particular real estate sectors including, but not limited to, those risks described below:

Multifamily Properties. The value and successful operation of a multifamily property is subject to risks based on a number of factors, such as the location of the property, the ability of the management team, the level of mortgage interest rates, the presence of competing properties, adverse economic conditions in the locale, oversupply and rent control laws or other laws affecting such properties.

Retail Properties. Retail properties are subject to risks that include changes to the overall health of the economy, and may be adversely affected by, among other things, the growth of alternative forms of retailing, bankruptcy, departure or cessation of operations of a tenant, a shift in consumer demand due to demographic changes, changes in spending patterns and lease terminations.

Office Properties. Office properties are subject to risks that include changes to the overall health of the economy, and other factors such as a downturn in the businesses operated by their tenants, obsolescence and non-competitiveness.

Industrial Properties. Industrial properties are subject to risks that include changes to the overall health of the economy, and other factors such as downturns in the manufacture, processing and shipping of goods.

Hospitality Properties. The risks of hotel, motel and similar hospitality properties include, among other things, the necessity of a high level of continuing capital expenditures, competition, increases in operating costs which may not be offset by increases in revenues, dependence on business and commercial travelers and tourism, increases in fuel costs and other expenses of travel, and adverse effects of general and local economic conditions. Hotel properties tend to be more sensitive to adverse economic conditions and competition than many other commercial properties.

Healthcare Properties. Healthcare properties and healthcare providers are subject to risks arising from a number of several significant factors, including federal, state and local laws governing licenses, certification, adequacy of care, pharmaceutical distribution, rates, equipment, personnel and other factors regarding operations, continued availability of revenue from government reimbursement programs and competition on a local and regional basis. The failure of any healthcare operator to comply with governmental laws and regulations may affect its ability to operate its facility or receive government reimbursements.

Shopping Centers. Shopping center properties are subject to risks that are principally based on their dependence on the successful operations and financial condition of their tenants, particularly certain of their major tenants, and could be adversely affected by bankruptcy of those tenants. In some cases a tenant may lease a significant portion of the space in one center, and its closure or bankruptcy could cause significant revenue loss, including the loss of revenue from smaller tenants in the same shopping center that may financially struggle due to lower foot traffic in the mall generally, due to loss of the large tenant. Shopping centers also face the need to enter into new leases or renew leases on favorable terms to generate rental revenues and operate profitably. Shopping centers are also subject to risks due to changes in the local markets where their properties are located, as well as by adverse changes in national economic and market conditions.

Self-Storage Properties. The value and successful operation of a self-storage property is subject to risk based on a number of factors, such as the ability of the management team, the location of the property, the presence of competing properties, changes in traffic patterns and effects of general and local economic conditions with respect to rental rates and occupancy levels.

Other factors may contribute to real estate industry risks and, therefore, to risks associated with investments by the Fund in real estate-related debt and debt securities:

Development Issues. Certain real estate borrowers may engage in the development or construction of real estate properties. These companies are exposed to a variety of risks inherent in real estate development and construction, such as the risk of cost overruns, inadequate capital to complete the project, and that there will be insufficient tenant demand at economically profitable rent levels.

Inadequate Insurance. Certain of real estate borrowers may fail to carry sufficient liability, fire, flood, earthquake extended coverage and rental loss insurance, or insurance in place may be subject to various policy specifications, limits and deductibles. Should any type of uninsured loss occur, the borrower could lose its investment in, and anticipated profits and cash flows from, a number of properties and, as a result, adversely affect the Fund’s investment performance.

Dependence on Tenants. The value and cash flow associated with rental real estate depends upon the ability of the borrower to generate enough rental income in excess of its debt service and other rental real estate expenses. Changes beyond the control of the borrower may occur with its tenants who may suffer economic setbacks which may in turn render them unable to make its lease payment. In that event the borrowers may suffer lower revenues and service its debt owed to the Fund.

Financial Leverage. The Fund’s borrowers may be highly leveraged and financial covenants may affect their ability to operate effectively and service its debt owed to the Fund.

Environmental Issues. In connection with the direct or indirect ownership, operation, management and development of real properties that may contain hazardous or toxic substances, a borrower of a Fund may be considered an owner, operator or responsible party for such properties and, therefore, may be potentially liable for removal or remediation costs, as well as certain other costs, including governmental fines and liabilities for injuries to persons and property. The existence of any such material environmental liability could have a material adverse effect on the results of operations and cash flow of any such borrower and, as a result, could affect the amounts available to the Fund to make distributions to its investors.

Lending Market Conditions. Instability in the United States, European and other credit markets, at times, can make it more difficult for borrowers to obtain financing or refinancing on attractive terms or at all. In particular, because of conditions in the credit markets, borrowers may be subject to increased interest expenses for borrowed money and tightening underwriting standards. There is also a risk that a general lack of liquidity or other events in the credit markets may adversely affect the ability of issuers in whose securities the Fund invests to finance real estate or refinance completed projects.

For example, historically adverse developments relating to sub-prime mortgages have adversely affected the willingness of some lenders to extend credit, in general, which may make it more difficult for homeowners or companies to obtain financing on attractive terms or at all so that they may commence or complete real estate projects, refinance completed projects or purchase real estate. These factors do adversely affect real estate values generally. These factors also may adversely affect the broader economy, which in turn may adversely affect the real estate markets. Accordingly these factors could, in turn, reduce the number of real estate investment opportunities and reduce the Fund’s investment returns.

Management Risk. The net asset value of the Fund changes daily based on the performance of its investments. The Fund’s investment strategy, allocations, and Advisor and Sub-Advisors’ judgments about the attractiveness, value and potential appreciation of particular real estate segment or specific holding may prove to be incorrect, may not produce the desired results and may result in losses to the Fund and its shareholders.

Non-Diversification Risk. As a non-diversified fund, the Fund may invest more than 5% of its total assets in the securities of one or more issuers. The Fund’s performance may be more sensitive to any single economic, business, political or regulatory occurrence than the value of shares of a diversified investment company.

Debt Securities and Interest Rate Risks. Because the Fund invests primarily in Mortgages and other debt instruments, the value of your investment in the Fund may fluctuate with changes in interest rates. Typically, a rise in interest rates causes a decline in the value of fixed rate or other debt instruments. Recently, interest rates have been historically low. Current conditions may result in a rise in interest rates. As a result, for the present, interest rate risk may be heightened. In general, the market price of debt securities with longer maturities will increase or decrease more in response to changes in interest rates than shorter-term securities. Other risk factors include credit risk (the debtor may default) and prepayment risk (e.g., the debtor may pay its obligation early, reducing the amount of interest payments). These risks could affect the value of a particular investment, possibly causing the Fund’s share price and total return to be reduced and fluctuate more than other types of investments.

Secured Debt Risk. Secured debt, including Mortgages, typically will be secured by pledges of collateral from the borrower in the form of tangible assets, including real estate. Secured debt hold the most senior position in the capital structure of a borrower. Secured debt in most circumstances is fully collateralized by assets of the borrower. Thus, it is repaid before unsecured debt. Substantial increases in interest rates may cause an increase in loan defaults as borrowers may lack resources to meet higher debt service requirements. The value of the Fund’s assets may also be affected by other uncertainties such as pending tax reform legislation, economic developments affecting the market for senior secured term loans or uncertainties affecting borrowers generally. Moreover, the security for the Fund’s secured debt investments may not be recognized for a variety of reasons, including the failure to make required filings by lenders, trustees or other responsible parties and, as a result, the Fund may not have priority over other creditors as anticipated.

Credit Risk; Junior Tranches. There is a risk that debt issuers will not make payments, resulting in losses to the Fund. In addition, the credit quality of securities may be lowered if an issuer or borrower’s financial condition changes. Lower credit quality may lead to greater volatility in the price of a security and in shares of the Fund. Lower credit quality also may affect liquidity and make it difficult to sell the security. It is possible that the Fund’s borrowers or issuers may not make scheduled interest and/or principal payments on their loans and/or debt securities, which may result in losses or reduced cash flow to the Fund, either or both of which may cause the NAV of, or the distributions by, the Fund to decrease. Default, or the market’s perception that an issuer is likely to default, could reduce the value and liquidity of securities, thereby reducing the value of your investment in Fund shares. In addition, default may cause the Fund to incur expenses in seeking recovery of principal or interest on its portfolio holdings. Support tranches of residential MBS are subject to amplified credit risks and the Fund.

Prepayment Risk. Securities may be subject to prepayment risk because borrowers are typically able to prepay principal. Consequently, a security’s maturity may be longer or shorter than anticipated. When interest rates fall, obligations will be paid off more quickly than originally anticipated and the Fund may have to invest the prepaid proceeds in securities with lower yields. The yield realized on a security purchased at a premium will be lower than expected if prepayment occurs sooner than expected, as is often the case when interest rates fall. When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, preventing the Fund from reinvesting at higher yields. The yield realized on a security purchased at a discount will be lower than expected if prepayment occurs later than expected, as is often the case when interest rates rise for investments in MBS, CLOs, or other CREs. Lower-than-expected prepayment rates will expose investments in junior tranches of residential MBS to credit risks for longer periods of time.

Direct Lending Risk. To the extent the Fund is the sole lender in privately offered debt, it may be solely responsible for the expense of servicing that debt, including, if necessary, taking legal actions to foreclose on any security instrument securing the debt (e.g., the mortgage or, in the case of a mezzanine loan, the pledge). This may increase the risk and expense to the Fund compared to syndicated or publicly offered debt.

Direct Origination Risk. A portion of the Fund’s investments may be originated through co-investments. The results of the Fund’s operations depend on several factors, including the availability of opportunities for the origination or acquisition of target investments, the level and volatility of interest rates, the availability of adequate short and long-term financing, conditions in the financial markets and economic conditions. Further, the Fund’s inability to raise capital and the risk of portfolio company defaults may materially and adversely affect the Fund’s investment originations, business, liquidity, financial condition, results of operations and its ability to make distributions to its shareholders. In addition, competition for originations of and investments in the Fund’s target investments may lead to the price of such assets increasing, which may further limit its ability to generate desired returns. Also, as a result of this competition, desirable investments in the Fund’s target investments may be limited in the future and the Fund may not be able to take advantage of attractive investment opportunities from time to time, as the Fund can provide no assurance that the Sub-Advisor will be able to identify and make investments that are consistent with its investment objective.

Conflicts of Interest Related to Direct Origination. In the ordinary course of business, the Fund may enter into transactions with portfolio companies that may be considered related party transactions. In order to ensure that the Fund does not engage in any prohibited transactions with an affiliate, the Fund has implemented certain written policies and procedures. The Board will review these procedures on a periodic basis and the Fund will not enter into any agreement unless and until it is satisfied that doing so will not raise concerns under the 1940 Act. Other potential conflicts of interest with respect to the Fund, its Advisor, Sub-Advisor and Portfolio Managers are discussed under “Conflicts of Interest” below.

Mortgage Backed Securities (MBS) Risk. When the Fund invests in MBS, the Fund is subject to default risk, prepayment risk and structure risk. If underlying borrowers default on interest or principal payments, the assets backing these securities may not be sufficient to support payments on the securities. Junior or Support tranches of MBS are structured such that they are subject to amplified default risks. Borrowers tend to prepay loans at faster rates when interest rates decline, resulting in lower reinvestment yields for the Fund. Borrowers tend to prepay loans at slower rates when interest rates rise, resulting in fewer opportunities to reinvestment at higher yields for the Fund. If interest rates fall, the underlying debt may be repaid ahead of schedule, reducing the value of the Fund’s investments. If interest rates rise, there may be fewer prepayments, which would cause the average portfolio maturity to rise, increasing the potential for the Fund to lose money. The value of MBS is significantly affected by changes in interest rates, the market’s perception of issuers, and the creditworthiness of the parties involved. The ability of the Fund to successfully utilize MBS in its investment strategy may depend on the ability of the RREFF to correctly forecast interest rates and other economic factors because these securities may have a structure that makes their reaction to interest rate changes difficult to predict, making their value highly volatile. Certain MBS may be secured by pools of mortgages on single-family and/or multi-family properties or other commercial properties. The credit risk on such securities is affected by homeowners or borrowers defaulting on their loans. The values of assets underlying MBS may decline and, therefore, may not be adequate to cover interest and principal payments to investors. MBS and other securities issued by participants in housing, as well as other real estate-related markets, have experienced extraordinary weakness and volatility in past years. Possible legislation in the area of residential mortgages and other loans that may collateralize the securities in which the Fund may invest could negatively impact the value of the Fund’s investments. To the extent the Fund focuses its investments in particular types of MBS, the Fund may be more susceptible to risk factors affecting such types of securities, including the following:

Redemption. The Fund may have loans that are in default and subject to foreclosure rights. After a foreclosure sale, the borrower and foreclosed junior lien holders may have a statutory period in which to redeem the property from the foreclosure sale by paying amounts due. This may limit the profits that may be available to a foreclosing lender by reselling the property.

Anti-Deficiency Legislation. The Fund may acquire interests in mortgage notes that limit the Fund’s recourse to foreclosure upon the security property, with no recourse against the borrower’s other assets. In some jurisdictions, the Fund can pursue a deficiency judgment against the note-issuing borrower or a guarantor if the value of the property securing the note is insufficient to pay back the debt owed to the Fund. In other jurisdictions, however, if the Fund desires to seek a judgment in court against the borrower for the deficiency balance, the Fund may be required to seek judicial foreclosure and/or have other security from the borrower.

“Due-on-Encumbrance” Clauses. The notes and deeds of trust held by the Fund, like those of many investors, contain “due-on-sale” clauses permitting the Fund to accelerate the maturity of a note if the note borrower sells, conveys or transfers all or any portion of the property, but may or may not contain “due-on-encumbrance” clauses which would permit the same action if the borrower further encumbers the property (i.e., executes further deeds of trust). The enforceability of these types of clauses has been the subject of several major court decisions and legislation in recent years, and may limit the Fund’s ability to accelerate the maturity of a note and proceed to foreclosure on the mortgaged property.

Prepayment Charges. Some notes acquired by the Fund may provide for certain prepayment charges to be imposed on the note borrower in the event of certain early payments on the note. The Advisor and/or Sub-Advisor reserves the right at its business judgment to waive collection of prepayment penalties.

Defaulted Securities Risk. Mortgages or loans in which the Fund invests directly or through MBS or other structured debt may default. Defaulted securities lack liquidity and may have no secondary market for extended periods. Defaulted securities may have low recovery values and defaulting borrowers may seek bankruptcy protection, which would delay resolution of the Fund’s claims. Defaulted securities will not make scheduled interest or principal payments, which will reduce the Fund’s returns and ability to make distributions. Defaulted securities may become worthless. Junior tranches of MBS, CDOs or other CREs are subject to amplified default risks.

Mortgage REIT Risk. Mortgage REITs are exposed to risks specific to the real estate market, including, among others, credit risk, prepayment risk, interest rate risk and leverage risk. Additionally, the value of the Fund’s investments in REITs may change in response to changes in the real estate market such as declines in the value of real estate, lack of available capital or financing opportunities, and increases in property taxes or operating costs. Shareholders of the Fund will indirectly be subject to the fees and expenses of the individual REITs in which the Fund invests.

Collateralized Loan Obligation (CLO) Risk. CLOs are securities backed by an underlying portfolio of debt obligations. CLOs issue classes or “tranches” that vary in risk and yield and may experience substantial losses due to actual defaults, decrease of market value due to collateral defaults and removal of subordinate tranches, market anticipation of defaults and investor aversion to CLO securities as a class. The risks of investing in CLOs depend largely on the tranche invested in and the type of the underlying debts and loans in the tranche of the CDO, in which the Fund invests. CLOs also carry risks including, but not limited to, interest rate risk and credit risk.

Preferred Securities Risk. There are various risks associated with investing in preferred securities, including credit risk, interest rate risk, deferral and omission of distributions, subordination to bonds and other debt securities in an issuer’s capital structure, limited liquidity, limited voting rights and special redemption rights. Securities with longer maturities tend to be more sensitive to interest rate changes. Holders of preferred securities may not receive dividends, or the payment can be deferred for some period of time. In bankruptcy, holders of debt are generally paid before the holders of preferred securities.

Issuer / Borrower Risk. The value of a specific security can be more volatile than the market as a whole and can perform differently from the value of the market as a whole. The value of an issuer’s securities that are held in the Fund’s portfolio may decline for a number of reasons which directly relate to the issuer, such as management performance, financial leverage and reduced demand for the respective properties and services. A project-specific loan can perform differently from the market as a whole for reasons related to the borrower, such as an individual’s or entity’s economic situation. Compared to investment companies that focus only on securities issued by large capitalization companies, the Fund’s NAV may be more volatile because it invests in notes of individuals or small entities. These issuers are more likely to suffer sudden financial reversals such as (i) job loss, (ii) depletion of financial reserves or (iii) loss of access to refinancing opportunities. In addition, the credit quality of securities may be lowered if a borrower’s financial condition deteriorates, which tends to increase the risk of default and decreases a note’s value. Further, compared to securities issued by large companies, notes issued by individuals or small entities are more likely to experience more significant changes in market values, be harder to sell and at prices that the adviser believes appropriate, and offer greater potential for losses. Additionally, borrowers may seek bankruptcy protection which would delay resolution of security holder claims and may eliminate or materially reduce liquidity. Compared to investments in debt securities issued by large capitalization companies, the Fund’s investments in project-specific loans are more likely to experience greater changes in market value, and greater potential for losses.

Correlation Risk. Pursuant to the Fund’s investment objective, the Fund seeks to produce attractive, long-term risk-adjusted returns with lower correlation to the broader financial markets, such as through investments in real estate-related securities. Although the prices of equity securities and fixed-income securities, as well as other asset classes, often rise and fall at different times so that a fall in the price of one may be offset by a rise in the price of the other, in down markets the prices of these securities and asset classes can also fall in tandem. There is no guaranty that the Fund will succeed in achieving its investment objective or that the Fund will outperform the broader financial markets.

Liquidity Risk – Quarterly Repurchases. The Fund is a closed-end investment company structured as an “interval fund” and is designed for long-term investors. Unlike many closed-end investment companies, the Fund’s shares are not listed on any securities exchange and are not publicly traded. There currently is no secondary market for the shares and the Advisor does not expect that a secondary market will develop. Limited liquidity is provided to shareholders only through the Fund’s quarterly repurchase offers for no less than 5% of the Fund’s shares outstanding at per-class net asset value. There is no guarantee that shareholders will be able to sell all of the shares they desire in a quarterly repurchase offer.

Liquidity Risk – Underlying Investments. The Fund’s investments, such as in private debt funds or whole loans, are subject to liquidity risk. This liquidity risk exists because particular investments of the Fund may be difficult to sell, possibly preventing the Fund from selling them at an advantageous time or price, or possibly requiring the Fund to dispose of other investments at unfavorable times or prices, in order to satisfy its 5% quarterly repurchase obligations. Funds with principal investment strategies that involve securities of companies with smaller market capitalizations, private investments derivatives or securities with substantial market and/or credit risk tend to have the greatest exposure to liquidity risk.

The use of leverage, such as borrowing money to purchase securities or otherwise invest the Fund’s assets, or borrowing money to satisfy Repurchase Offers will cause the Fund to incur additional expenses and may significantly magnify the Fund’s losses in the event of adverse performance of the Fund’s underlying investments.

Repurchase Policy Risk. Quarterly repurchases by the Fund of its shares typically will be funded from available cash or sales of portfolio securities. However, payment for repurchased shares may require the Fund to liquidate portfolio holdings earlier than the Advisor otherwise would liquidate such holdings, potentially resulting in losses, and may increase the Fund’s portfolio turnover. The Advisor may 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 any such 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 proceeds by selling investments, the Fund may hold a larger proportion of its net assets in less liquid securities. Also, the sale of securities to fund repurchases could reduce the market price of those securities, which in turn would reduce the Fund’s net asset value.

Distribution Policy Risk. The Fund’s distribution policy does not include a fixed annual rate of the Fund’s current net asset value per share. Distributions will be calculated daily and paid monthly. Shareholders receiving periodic payments from the Fund may be under the impression that they are receiving net profits. However, all or a portion of a distribution may consist of a return of capital. Return of capital is the portion of a distribution that is a return of your original investment dollars in the Fund. Shareholders should not assume that the source of a distribution from the Fund is net profit. Shareholders should note that return of capital will reduce the tax basis of their shares and potentially increase the taxable gain, if any, upon disposition of their shares.

Minimal Capitalization Risk. The Fund is not obligated to raise any specific amount of capital. There is a risk that the amount of capital actually raised by the Fund through the offering of its shares may be insufficient to achieve profitability or allow the Fund to realize its investment objective or implement its investment strategies. An inability to raise additional capital may adversely affect the Fund’s financial condition, liquidity and results of operations, as well as its compliance with regulatory requirements. If the Fund fails to achieve its estimated size and the Expense Limitation is not renewed, expenses will be higher than expected.

No Operating History. The Fund is a closed-end investment company with no history of operations. It is designed for long-term investors and not as a trading vehicle. During the Fund’s start-up period, the Fund may not achieve the desired portfolio composition. If the Fund commences operations under inopportune market or economic conditions, it may not be able to achieve its investment objective.

CYBERSECURITY

The computer systems, networks and devices used by the Fund and its service providers to carry out routine business operations employ a variety of protections designed to prevent damage or interruption from computer viruses, network failures, computer and telecommunication failures, infiltration by unauthorized persons and security breaches. Despite the various protections utilized by the Fund and its service providers, systems, networks, or devices potentially can be breached. The Fund and shareholders could be negatively impacted as a result of a cybersecurity breach.

Cybersecurity breaches can include unauthorized access to systems, networks, or devices; infection from computer viruses or other malicious software code; and attacks that shut down, disable, slow, or otherwise disrupt operations, business processes, or website access or functionality. Cybersecurity breaches may cause disruptions and impact the Fund’s business operations, potentially resulting in: financial losses; interference with the Fund’s ability to calculate NAV; impediments to trading; the inability of the Fund, the Advisor, the Sub-Advisors, and other service providers to transact business; violations of applicable privacy and other laws; regulatory fines, penalties, reputational damage, reimbursement or other compensation costs, or additional compliance costs; as well as the inadvertent release of confidential information.

Similar adverse consequences could result from cybersecurity breaches affecting issuers of securities in which the Fund invests; counterparties with which the Fund engages in transactions; governmental and other regulatory authorities; exchange and other financial market operators, banks, brokers, dealers, insurance companies, and other financial institutions (including financial intermediaries and service providers for the Fund’s shareholders); and other parties. In addition, substantial costs may be incurred by these entities in order to prevent any cybersecurity breaches in the future.

MANAGEMENT OF THE FUND

Trustees and Officers

The Board is responsible for the overall management of the Fund, including supervision of the duties performed by the Advisor. The Board is comprised of five trustees. The Trustees are responsible for the Fund’s overall management, including adopting the investment and other policies of the Fund, electing and replacing officers and selecting and supervising the Fund’s Investment Advisor and Sub-Advisors. The name and business address of the Trustees and officers of the Fund and their principal occupations and other affiliations during the past five years, as well as a description of committees of the Board, are set forth under “Management” in the SAI.

Investment Advisor

Bluerock Credit Fund Advisor, LLC, located at c/o Bluerock Real Estate Holdings, LLC, 712 Fifth Avenue, New York, NY 10019, serves as the Fund’s investment adviser. The Advisor is registered with the SEC as an investment adviser under the Advisers Act. The Advisor is a Delaware limited liability company formed on November 30, 2017, for the purpose of advising the Fund.

Under the general supervision of the Fund’s Board of Trustees, and pursuant to the terms of an investment management agreement (the “Management Agreement”), the Advisor will carry out the investment and reinvestment of the assets of the Fund, will furnish continuously an investment program with respect to the Fund or may delegate such responsibilities to one or more sub-advisors. In addition, the Advisor will supervise and provide oversight of the Fund’s service providers. The Advisor will furnish to the Fund office facilities, equipment and personnel for servicing the management of the Fund. 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 1.85% of the daily net assets of the Fund. The Advisor may employ research services and service providers, including mortgage service providers to assist in the Advisor’s market analysis and investment selection.

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 expenses, but excluding taxes, interest, brokerage commissions and extraordinary expenses, to the extent that they exceed 2.60% per annum of the Fund’s average daily net assets attributable to Class A shares. 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, subject to the limitations that: (1) the reimbursement will be made only for fees and expenses incurred not more than three years from the date in which they were incurred; and (2) the reimbursement may not be made if it would cause the current Expense Limitation or any expense limitation in effect at the time of reimbursement to be exceeded. The Expense Limitation Agreement will remain in effect, at least until January 31, 2020, unless and until the Board approves its modification or termination. This agreement may be terminated only by the Fund’s Board of Trustees on 60 days written notice to the Advisor. After January 31, 2020, the Expense Limitation Agreement may be renewed at the Advisor’s and Board’s discretion.

A discussion regarding the basis for the Board’s approval of each of the Fund’s Management Agreement and Sub-Advisory Agreements with RREEF and Mercer will be available in the Fund’s first annual or semi-annual report to shareholders.

Advisor’s Investment Committee

The Advisor has established an Investment Committee comprised of five persons (the “Committee”) responsible for: (1) setting overall investment policies and strategies for the Fund; (2) establishing allocation targets for the Fund’s investment portfolio as part of the portfolio planning process; (3) reviewing and having the opportunity to object to the Fund’s of private debt investments; and (4) generally overseeing the activities of the Fund’s Sub-Advisors.

The members of the Committee, and their professional background and experience are as follows:

R. Ramin Kamfar -- Mr. Kamfar has served as Chairman and a member of the Investment Committee of the Advisor since inception. Mr. Kamfar has served as the Chairman and CEO of Bluerock Real Estate, LLC (“BRRE”), a private equity real estate firm, since its founding in October 2002, as a Trustee of Total Income+ Real Estate Fund and as Chairman and CEO of its advisor, Bluerock Fund Advisor, LLC, since 2012 and as Chairman and CEO of Bluerock Residential Growth REIT, a NYSE publicly traded REIT since its founding in 2009. Mr. Kamfar started his career as an investment banker at Lehman Brothers Inc. in 1988, and has approximately 30 years of experience in various aspects of real estate, mergers and acquisitions, private equity investing, investment banking, and public and private financings. Mr. Kamfar received an M.B.A. degree with distinction in Finance in 1988 from The Wharton School of the University of Pennsylvania, located in Philadelphia, Pennsylvania, and a B.S. degree with distinction in Finance in 1985 from the University of Maryland located in College Park, Maryland.

James G. Babb, III -- Mr. Babb has served as a member of the Investment Committee of the Advisor since inception. Mr. Babb has served as Senior Managing Director and Chief Investment Officer of BRRE, since 2007, as a Trustee of the Total Income + Real Estate Fund and as the Chief Investment Officer of its advisor, Bluerock Fund Advisor, LLC, since 2012. Also, Mr. Babb has served as Chief Investment Officer of Bluerock Residential Growth REIT, a NYSE publicly traded REIT since its founding in 2009, and as a Director of Bluerock Residential Growth REIT from 2009 to 2014. Mr. Babb is a founding principal of Starwood Capital Group (“Starwood”), a leading institutional real estate investment manager, where he helped lead the residential and office acquisitions initiatives from 1992 to 2003. During Mr. Babb’s tenure, Starwood raised and invested funds on behalf of institutional investors through seven private real estate funds, and which in the aggregate ultimately invested approximately $8 billion in approximately 250 separate transactions. Mr. Babb also led Starwood’s efforts to expand its platform to invest in England and France. Mr. Babb received a B.A. degree in Economics in 1987 from the University of North Carolina at Chapel Hill, North Carolina.

Jordan B. Ruddy -- Mr. Ruddy has served as a member of the Investment Committee and as President of the Advisor since inception. Mr. Ruddy has served as President and Chief Operating Officer of BRRE since 2002, as a Co-Portfolio Manager of the Total Income+ Real Estate Fund and as President and a member of the Investment Committee of its advisor since 2013 and 2012, respectively. Also, Mr. Ruddy has served in several senior officer capacities of Bluerock Residential Growth REIT, a NYSE publicly traded REIT since its founding in 2009, and is currently its President. Mr. Ruddy brings approximately 30 years of institutional real estate investment experience, having worked with some of leading public and private firms in the industry. Prior to BRRE, Mr. Ruddy served as a real estate investment banker at Banc of America Securities LLC, Smith Barney Inc., and JP Morgan Chase (previously the Chase Manhattan Bank), and as Vice President of Amerimar Enterprises, a real estate company specializing in value-added investments nationwide. Mr. Ruddy received an M.B.A. degree in Finance and Real Estate in 1995 from The Wharton School of the University of Pennsylvania, and a B.S. degree with high honors in Economics in 1986 from the London School of Economics.

Adam Lotterman -- Mr. Lotterman has served as a member of the Advisor since its inception. In addition, Mr. Lotterman is a co-founder and Lead Economist of the advisor to Total Income+ Real Estate Fund, Bluerock Fund Advisor, LLC, and has served as a portfolio manager and been a key member of that fund’s investment decision-making team since its inception in 2012. Mr. Lotterman was an Adjunct Professor at Nova Southeastern University from 2010 to 2012, where he taught Real Estate Market Analysis in the Masters of Real Estate Development program. From 2011 to 2012, Mr. Lotterman was Vice President, New Business Development of Forman Capital, a private commercial real estate lender. Prior to that, Mr. Lotterman worked as Senior Valuation Analyst at Bayview Asset Management (former hedge fund affiliate of The Blackstone Group) from 2010 to 2011, where he led a team responsible for the valuation and acquisition of loan portfolios ranging in size from $100 million to $40 billion. From 2005 to 2010, Mr. Lotterman was the Senior Analyst for Goodkin Consulting (former real estate consulting arm of PricewaterhouseCoopers) for the majority of his tenure, where he developed extensive experience in real estate consulting, research and analysis on a national level. Mr. Lotterman received an M.S. in International Real Estate in 2006 from Florida International University, where he graduated first in class, and a B.S. Degree in microbiology with a minor in chemistry in 1997 from the University of Florida.

Ryan MacDonald -- Mr. MacDonald has served as a member of the Investment Committee of the Advisor since inception. Mr. MacDonald serves as Chief Acquisitions Officer for Bluerock Residential Growth REIT (NYSE: BRG) and of BRRE and certain of its affiliates. Since joining BRRE in 2008, Mr. MacDonald is responsible for sourcing, underwriting, structuring, financing and closing of all of BRRE’s real estate investments and dispositions. To date, Mr. MacDonald has transacted over 70 real estate investments with an aggregate value approaching $3 billion. Prior to joining BRRE, Mr. MacDonald was an Analyst for PNC Realty Investors (formerly Mercantile Real Estate Advisors), where he served as part of an investment team that made more than $1.2 billion in investments within all tranches of the capital structure, and also served in a corporate development role at Mercantile Bankshares, where he worked with executive management focusing on high level strategic initiatives for the $6 billion bank. Mr. MacDonald received a B.A. in Economics from the University of Maryland, College Park.

Investment Sub-Advisor - RREEF

The Advisor has engaged RREEF America L.L.C. (“RREEF”), an investment adviser registered with the SEC under the Advisers Act, as Sub-Advisor to provide investment management services to the Fund. RREEF was originally founded in 1975 and is one of the largest real estate investment managers globally with more than 400 professionals and staff located in 27 locations around the world and over $57 billion in assets under management as of September 30, 2017. RREEF, is a division of Deutsche Asset Management, one of the world’s leading investment management organizations, with over $800 billion in assets under management.

RREEF’s real estate team employs a disciplined investment approach and offers a diverse range of strategies and solutions across the risk/return and geographic spectrums, including core and non-core real estate, opportunistic investments in equity and debt, real estate securities, infrastructure securities and structured real estate debt. The real estate business aims to deliver competitive long-term risk adjusted returns, preservation of capital and diversification to its investors, which include governments, corporations, insurance companies, endowments, retirement plans and private clients worldwide.

Fundamental to RREEF’s real estate investment approach is the close collaboration between the firm’s dedicated real estate research, transaction, portfolio management and asset management teams in each region. Within these functions, RREEF has experts in product types and styles of investing, providing a diverse and deeply experienced bench of talent across the investment platform. Portfolio Managers, together with Global Client Group teams are responsible for bringing these talents together, providing clear connectivity and accountability throughout the investment process and in client service.

RREEF believes that the key attributes that differentiate it as a leading fiduciary manager of real estate investment programs include:

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Proven Long Term Results. For more than 40 years, RREEF has been a leader in real estate investing, producing public and private real estate performance that has provided consistent returns.

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Experience and Resources. RREEF offers one of the broadest and most experienced real estate decision-making teams in the industry, with long tenured senior professionals spanning key functional areas such as research, portfolio and asset management, transactions and business leadership. RREEF’s real estate organization of more than 400 staff worldwide demonstrates the depth of talent and support resources available to develop and execute client investment strategies.

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Hands on Asset Management. RREEF believes that a critical element in the success of any real estate investment program is having a robust asset management organization in place. At RREEF, hands on asset management means dedicating local people and relationships required to optimize the performance of underlying real estate assets.

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Research Driven Decisions. RREEF’s dedicated real estate research group serves as a unique economic and real estate market research source for the entire organization. Through its involvement with senior management and interaction with investment teams, the research function is well integrated into the firm’s investment process.

Portfolio Managers

Subject to RREEF’s Investment Committee’s oversight, Marc Feliciano, Joseph Rado and Patrick Kennelly are the Fund’s portfolio managers (“Portfolio Managers”) and oversee the Sub-Advisor’s day to day investment operations of the Fund. Each has served as a Portfolio Manager since the Fund’s inception.

Marc Feliciano, Managing Director, CIO & Head of Portfolio and Asset Management, Americas - Mr. Feliciano is the Chief Investment Officer (CIO) of Real Estate, Americas, and the Head of Portfolio and Asset Management for the Sub-Advisor’s Real Estate Americas business. He is also Head of the Americas Debt Investments Group. Mr. Feliciano is a member of the Americas Leadership Committee and Global Investment Committee. He serves as Chairman of the Americas Real Estate Investment Committee, which governs both equity and debt investments and portfolios, and serves on the Americas Real Estate Management Committee. As Americas CIO, he also works with the firm’s portfolio managers in developing specific portfolio strategy for each account or fund as part of the annual investment plan process. Prior to assuming this position, Mr. Feliciano served as Global Head of Risk and Performance Analysis, responsible for the development of allocation, risk and performance tools. In this role, he was a member of the Global CIO Group working closely with the Global and regional CIOs, and the research team to formulate the global and regional viewpoints and strategy, and to develop the resulting viewpoints for each region. He joined RREEF Real Estate in February 2005 with 12 years of experience spanning public and private real estate investment management, alternative investment management as well as workouts, restructurings and recapitalizations of public companies and properties in and out of bankruptcy. While with RREEF Real Estate, he has led debt restructurings across several accounts and funds in conjunction with the Americas portfolio management, asset management and capital markets teams. Mr. Feliciano previously worked in the private and public real estate sectors including Morgan Stanley, Heitman/PRA Securities Advisors and INVESCO Realty Advisors. He received undergraduate and graduate degrees in accounting with a concentration in finance from the University of Texas at Austin.

Joseph Rado, Director, Americas Debt Investments Group. Mr. Rado is responsible for managing all aspects of the debt investments process including credit, underwriting, due diligence, legal structuring and documentation, closing and asset management. Prior to joining Deutsche Asset Management in 2006, Mr. Rado was Senior Underwriter at CWCapital LLC, where he was responsible for the underwriting and closing of complex multiple-party capital stack mezzanine loans, B-Notes, junior participation and senior mortgage loans. From 1997 to 2002, Mr. Rado was Manager of Real Estate Investments at Nissho Iwai American Corporation, an international Fortune 500 company. At Nissho Iwai, he was responsible for the origination and structuring of U.S. real estate investments for the company’s U.S. high yield real estate portfolio. Prior to joining Nissho Iwai, Mr. Rado was Vice President, Portfolio Management and Underwriting in the Commercial Real Estate Group at Wells Fargo (formerly First Union National Bank). Mr. Rado has 30+ years of experience in commercial real estate finance. He received a B.A. in Urban Planning from Rutgers University.

Patrick Kennelly, Director, Americas Debt Investments Group. Prior to joining Deutsche Asset Management, Patrick was the Portfolio Manager for Real Estate Credit at EquiTrust Life Insurance Company where he was responsible for origination, asset management and operational oversight of a $1.6 billion real estate credit portfolio on behalf of the firm’s $18 billion General Account. Investment experience consists of senior debt (floating and fixed), subordinate debt, securities (CMBS, SASB’s), private placements and other structured products. Patrick was one of 4 original members of the CIO team after the company was spun out of prior ownership, Guggenheim Capital. Prior to EquiTrust, Patrick worked for U.S. Bank, N.A. and FBOP Corporation where he structured and underwrote debt investments for US and Canadian REITs, Insurance Companies, PE Funds and middle market real estate operating companies. Mr. Kennelly has over 11 years of experience investing in real estate debt. He received an undergraduate degree in finance from the Indiana University Kelley School of Business.

The SAI provides additional information about the Portfolio Manager’s compensation, other accounts managed and ownership of Fund shares.

Investment Sub-Advisor - Mercer

The Advisor has engaged Mercer Investment Management, Inc., an investment adviser registered with the SEC under the Advisers Act, to provide sub-advisory services to the Advisor and the Fund. Mercer has been involved in a rigorous selection process leading to the selection of RREEF as a sub-advisor, and will assist the Advisor with ongoing market and competitive research, strategy selection and portfolio planning, and monitoring and diligence for the Fund. For more than 40 years, Mercer and its affiliates have provided global leadership in investment consulting and multi-manager fiduciary management, and is a leading advisor to sovereign wealth funds, pension plans, banks, family offices, insurance companies, endowments and foundations. Mercer, together with its global investment management affiliates have over $213 billion in assets under management as of September 30, 2017, and over $10.2 trillion in assets under advisement as of June 30, 2017.

Mercer is an affiliate of Mercer, LLC, a human resource and financial consulting company. Mercer, LLC has over 21,000 employees based in more than 40 countries and serves over 28,000 clients worldwide, and is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC).

Administrator, Accounting Agent and Transfer Agent

ALPS Fund Services, Inc., located at 1290 Broadway, Suite 1100, Denver, CO 80203, serves as Administrator and Accounting Agent for the Fund. For the services rendered to the Fund by ALPS Fund Services, the Fund pays the ALPS the greater of an annual minimum fee or an asset based fee, which scales downward based upon net assets for fund administration and fund accounting. DST Systems, Inc. (“DST”), located at PO Box 219169, Kansas City, MO 64121, serves as the Fund’s Transfer Agent and for such services the Fund pays DST a separate fee.

Custodian

UMB Bank, N.A, with principal offices at 1010 Grand Boulevard, Kansas City, Missouri 64106, serves as custodian for the securities and cash of the Fund’s portfolio. Under a Custody Agreement, the Custodian holds the Fund’s assets in safekeeping and keeps all necessary records and documents relating to its duties.

Estimated Fund Expenses

The Advisor is obligated to pay expenses associated with providing the services stated in the Management Agreement, including compensation of and office space for its officers and employees connected with investment and economic research, trading and investment management and administration of the Fund. The Advisor is obligated to pay the fees of any Trustee of the Fund who is affiliated with it.

The Administrator is obligated to pay expenses associated with providing the services contemplated by a Fund Services Administration Agreement (administration and accounting), including compensation of and office space for its officers and employees and administration of the Fund.

The Fund pays all other expenses incurred in the operation of the Fund including, among other things, (i) expenses for legal and independent accountants’ services, (ii) costs of printing proxies, share certificates, if any, and reports to shareholders, (iii) charges of the custodian and Transfer Agent in connection with the Fund’s dividend reinvestment policy, (iv) fees and expenses of independent Trustees, (v) printing costs, (vi) membership fees in trade association, (vii) fidelity bond coverage for the Fund’s officers and Trustees, (viii) errors and omissions insurance for the Fund’s officers and Trustees, (ix) brokerage costs, (x) taxes, (xi) costs associated with the Fund’s quarterly repurchase offers, (xii) servicing fees (xiii) investment-related expenses, incurred in connection with identifying, sourcing, evaluating, valuing, researching, diligence, monitoring, acquiring, selling or restricting investments, whether or not completed, including fees and other compensation payable to third parties in connection therewith and travel expenses incurred by a sub-adviser or its affiliates incurred in connection with the Fund’s affairs, and (xiv) other extraordinary or non-recurring expenses and other expenses properly payable by the Fund. The expenses incident to the offering and issuance of shares to be issued by the Fund will be recorded as a reduction of capital of the Fund attributable to the shares.

The Fund’s Board has authorized the Advisor and RREEF 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 and Principal Shareholders

A principal shareholder is any person who owns (either of record or beneficially) 5% or more the outstanding shares of a class of a fund. 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, [_________] as the sole initial shareholder of the Fund owned 100% of the voting securities and is deemed to control the Fund. However, it is expected that once the Fund commences investment operations and its shares are sold to the public, that this control will be diluted until such time as the Fund is controlled by it unaffiliated shareholders.

DETERMINATION OF NET ASSET VALUE

The net asset value of shares of the Fund is determined daily, as of the close of regular trading on the NYSE (normally, 4:00 p.m., Eastern Time). Each Class A share will be offered at net asset value. During the continuous offering, the price of the shares will increase or decrease on a daily basis according to the net asset value of the shares. In computing net asset value, portfolio securities of the Fund are valued at their current market values determined on the basis of market quotations. If market quotations are not readily available, securities are valued at fair value as determined by the Board. The Board has delegated execution of certain aspects of these procedures to a fair value team or committee composed of one or more representatives from the Advisor and RREEF. The team may also enlist third party consultants such as an audit firm or financial officer of a security issuer on an as-needed basis to assist in determining a security-specific fair value. The Board reviews and ratifies the execution of this process and the resultant fair value prices at least quarterly to assure the process produces reliable results. Fair valuation involves subjective judgments, and it is possible that the fair value determined for a security may differ materially from the value that could be realized upon the sale of the security. There is no single standard for determining fair value of a security. Rather, in determining the fair value of a security for which there are no readily available market quotations, the Advisor may consider several factors, including fundamental analytical data relating to the investment in the security, the nature and duration of any restriction on the disposition of the security, the cost of the security at the date of purchase, the liquidity of the market for the security and the recommendation of the Fund’s Portfolio Manager. The Advisor and RREEF may also consider periodic financial statements (audited and unaudited) or other information provided by the issuer. The Advisor and RREEF will attempt to obtain current information to value all fair valued securities.

With respect to private real estate debt investments, the Advisor may as needed engage and rely upon an independent third-party valuation specialist to assist in valuing such securities in certain circumstances where a market price is not readily available. The factors that may be considered with respect to the valuation of private real estate debt investments include:

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Loan Terms and Covenants

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Loan Duration

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Contract (Coupon) Rate

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Rate Structure

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Loan-to-Value Ratio

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Debt Service Coverage Ratio

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Payment-in-kind information (if any)

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Interest Amortization or Accrual Schedule

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Prevailing interest rates

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Potential Impairment to Underlying Asset

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Other factors deemed applicable

All of these factors may be subject to adjustments based upon the particular circumstances of a security or the Fund’s actual investment position.

The Advisor, with the assistance of RREEF or other parties, will provide the Board with periodic reports, no less frequently than quarterly, that discuss the functioning of the valuation process, if applicable to that period, and that identify issues and valuations problems that have arisen, if any. To the extent deemed necessary by the Advisor, the fair value team or committee of the Board will review any securities valued by the Advisor in accordance with the Fund’s valuation policies.

Non-dollar-denominated securities, if any, are valued as of the close of 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 net asset value materially have 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 net asset value may change at times when it is not possible to purchase or sell shares of the Fund. The Fund may use a third party pricing service to assist it in determining the market value of securities in the Fund’s portfolio. The Fund’s net asset value per share is calculated, on a class-specific basis, 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.

For purposes of determining the net asset value of the Fund, readily marketable portfolio securities listed on the NYSE are valued, except as indicated below, at the last sale price reflected on the consolidated tape at the close of the NYSE on the business day as of which such value is being determined. If there has been no sale on such day, the securities are valued at the mean of the closing bid and asked prices on such day. If no bid or asked prices are quoted on such day or if market prices may be unreliable because of events occurring after the close of trading, then the security is valued by such method as the Board shall determine in good faith to reflect its fair market value. Readily marketable securities not listed on the NYSE but listed on other domestic or foreign securities exchanges are valued in a like manner. Portfolio securities traded on more than one securities exchange are valued at the last sale price on the business day as of which such value is being determined as reflected on the consolidated tape at the close of the exchange representing the principal market for such securities. Securities trading on the NASDAQ are valued at the NASDAQ official closing price.

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 the NASDAQ or, in the case of securities not reported by the 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.

CONFLICTS OF INTEREST

As a general matter, certain conflicts of interest may arise in connection with a portfolio manager’s management of a fund’s investments, on the one hand, and the investments of other accounts for which the portfolio manager is responsible, on the other. For example, it is possible that the various accounts managed could have different investment strategies that, at times, might conflict with one another to the possible detriment of the Fund. Alternatively, to the extent that the same investment opportunities might be desirable for more than one account, possible conflicts could arise in determining how to allocate them. Other potential conflicts might include conflicts created by specific portfolio manager compensation arrangements, and conflicts relating to selection of brokers or dealers to execute Fund portfolio trades and/or specific uses of commissions from Fund portfolio trades (for example, research, or “soft dollars”, if any). RREEF has adopted policies and procedures and has structured its Portfolio Manager’s compensation in a manner reasonably designed to safeguard the Fund from being negatively affected as a result of any such potential conflicts. Certain conflicts of interest may arise from the Sub-Advisor’s arrangements with affiliated investment advisers. The Fund’s ability to enter into transactions with affiliates of the Advisor and/or any Sub-Advisor are limited by the 1940 Act. The Fund and the Portfolio Managers may face conflicts in the allocation of investment opportunities among the Fund and the investment funds, accounts, and investment vehicles managed by affiliates of the Advisor and/or the Sub-Advisors.

Certain conflicts of interest may arise from a Sub-Advisor’s arrangements with affiliated investment advisers. The Fund’s ability to enter into transactions with affiliates of the Advisor and/or any Sub-Advisor are limited by the 1940 Act. The Fund is prohibited under the 1940 Act from participating in certain transactions with affiliates without the prior approval of the Fund’s independent Trustees and, in some cases, the SEC. Any person that owns, directly or indirectly, 5% or more of the Fund’s outstanding voting securities will be an affiliate for purposes of the 1940 Act and the Fund is generally prohibited from buying or selling any security from or to such affiliate without the prior approval of the Fund’s independent Trustees. The 1940 Act also prohibits certain “joint” transactions with certain of affiliates without prior approval of the Fund’s independent Trustees and, in some cases, of the SEC. The Fund is prohibited from buying or selling any security from or to any person who owns more than 25% of the Fund’s voting securities or certain of that person’s affiliates, or entering into prohibited joint transactions with such persons, absent the prior approval of the SEC.

QUARTERLY REPURCHASES OF SHARES

Once each quarter, the Fund will offer to repurchase, at per-class net asset value 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 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 per-class 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”).

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 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 for each share class 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% and no more than 25% of the total number of shares outstanding on the Repurchase Request Deadline.

If shareholders tender for repurchase more than the Repurchase Offer Amount for a given repurchase offer, 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.

Notice to Shareholders

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 (“Shareholder Notification”). The Shareholder Notification will contain information shareholders should consider in deciding whether to tender their shares for repurchase. The notice 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 notice also will set forth the NAV that has been computed no more than seven days before the date of notification, and how shareholders may ascertain the NAV after the notification date.

Repurchase Price

The repurchase price of the shares will be the NAV of the share class as of the close of regular trading on the NYSE on the Repurchase Pricing Date. The notice of the repurchase offer also 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. You may call 1-844-819-8287 to learn the NAV.

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. Notwithstanding the foregoing, the Fund may in its sole discretion and for administrative convenience 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.

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 Commission 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 notice 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 cash or 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, and/or that the Fund’s line of credit is available to satisfy the Repurchase Offer Amount. 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 paragraphs. 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 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 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 net asset value.

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 right to redeem Fund shares outside the regular quarterly repurchases, regardless of shareholder circumstances, and the Fund may not honor any such requests. 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

Monthly Distribution Policy

The Fund’s distribution policy is to make monthly distributions to shareholders. The level of monthly distributions (including any return of capital) is not fixed. Such distributions are accrued daily and paid monthly and this distribution policy is subject to change. Shareholders receiving periodic payments from the Fund may be under the impression that they are receiving net profits. However, all or a portion of a distribution may consist of a return of capital. Shareholders should not assume that the source of a distribution from the Fund is net profit. A return of capital is not taxable to a shareholder unless it exceeds a shareholder’s tax basis in the shares. Returns of capital reduce a shareholder’s tax cost (or “tax basis”). Once a shareholder’s tax basis is reduced to zero, any further return of capital would be taxable. Shareholders should note that return of capital will reduce the tax basis of their shares and potentially increase the taxable gain, if any, upon disposition of their shares. As required under the 1940 Act, the Fund will provide a notice to shareholders at the time of distribution when such distribution does not consist solely of net income. Additionally, each distribution payment will be accompanied by a written statement which discloses the source or sources of each distribution. The IRS requires you to report these amounts, excluding returns of capital, on your income tax return for the year declared. The Fund will provide disclosures, with each distribution, that estimate the percentages of the current and year-to-date distributions that represent (1) net investment income, (2) capital gains and (3) return of capital. At the end of the year, the Fund may be required under applicable law to re-characterize distributions made previously during that year among (1) ordinary income, (2) capital gains and (3) return of capital for tax purposes. An additional distribution may be made in December, and other additional distributions may be made with respect to a particular fiscal year in order to comply with applicable law. Distributions declared in December, if paid to shareholders by the end of January, are treated for federal income tax purposes as if received in December.

The dividend rate may be modified by the Board from time to time. If, for any monthly 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 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.

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

The dividend 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 Rule 19a-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 the 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.

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

DIVIDEND REINVESTMENT POLICY

The Fund will operate under a dividend reinvestment policy administered by ALPS Fund Services, Inc. Pursuant to the policy, the Fund’s income dividends or capital gains or other distributions (each, a “Distribution” and collectively, “Distributions”), net of any applicable U.S. withholding tax, are reinvested in the same class of shares of the Fund.

Shareholders automatically participate in the dividend reinvestment policy, unless and until an election is made to withdraw from the policy on behalf of such participating shareholder. Shareholders who do not wish to have Distributions automatically reinvested should so notify the Administrator in writing at Bluerock Institutional Mortgage Income Fund, c/o ALPS, Administrator and Accounting Agent, 1290 Broadway, Suite 1100, Denver CO 80203. Such written notice must be received by the Administrator 30 days prior to the record date of the Distribution or the shareholder will receive such Distribution in shares through the dividend reinvestment policy. Under the dividend reinvestment policy, the Fund’s Distributions to shareholders are reinvested in full and fractional shares as described below.

When the Fund declares a Distribution, the Administrator, on the shareholder’s behalf, will receive additional authorized shares from the Fund either newly issued or repurchased from shareholders by the Fund and held as treasury stock. The number of shares to be received when Distributions are reinvested will be determined by dividing the amount of the Distribution by the Fund’s net asset value per share.

The Administrator will maintain all shareholder accounts and furnish written confirmations of all transactions in the accounts, including information needed by shareholders for personal and tax records. The Administrator will hold shares in the account of the shareholders in non-certificated form in the name of the participant, and each shareholder’s proxy, if any, will include those shares purchased pursuant to the dividend reinvestment policy. Each participant, nevertheless, has the right to request certificates for whole and fractional shares owned. The Fund will issue certificates in its sole discretion. The Administrator will distribute all proxy solicitation materials, if any, to participating shareholders.

In the case of shareholders, such as banks, brokers or nominees, that hold shares for others who are beneficial owners participating under the dividend reinvestment policy, the Administrator will administer the dividend reinvestment policy on the basis of the number of shares certified from time to time by the record shareholder as representing the total amount of shares registered in the shareholder’s name and held for the account of beneficial owners participating under the dividend reinvestment policy.

Neither the Administrator nor the Fund shall have any responsibility or liability beyond the exercise of ordinary care for any action taken or omitted pursuant to the dividend reinvestment policy, nor shall they have any duties, responsibilities or liabilities except such as expressly set forth herein. Neither shall they be liable hereunder for any act done in good faith or for any good faith omissions to act, including, without limitation, failure to terminate a participant’s account prior to receipt of written notice of his or her death or with respect to prices at which shares are purchased or sold for the participants account and the terms on which such purchases and sales are made, subject to applicable provisions of the federal securities laws.

The automatic reinvestment of dividends will not relieve participants of any federal, state or local income tax that may be payable (or required to be withheld) on such dividends. See “U.S. Federal Income Tax Matters.”

The Fund reserves the right to amend or terminate the dividend reinvestment policy. There is no direct service charge to participants with regard to purchases under the dividend reinvestment policy; however, the Fund reserves the right to amend the dividend reinvestment policy to include a service charge payable by the participants.

All correspondence concerning the dividend reinvestment policy should be directed to the Administrator at Bluerock Institutional Mortgage Income Fund, c/o ALPS, Administrator and Accounting Agent, 1290 Broadway, Suite 1100, Denver CO 80203. Certain transactions can be performed by calling the toll free number 1-844-819-8287.

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 advisors 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 Internal Revenue Code of 1986, as amended, 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 SAI. 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 they do not meet certain distribution requirements by the end of each calendar year. The Fund anticipates meeting these distribution requirements. Shareholders will not be subject to the alternative minimum tax.

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.

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 September 11, 2015. The Trustees have authorized an unlimited number of shares. The Fund does not intend to hold annual meetings of its shareholders.

The Amended and Restated 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. The Fund offers four classes of shares: Class A, Class C, Class I, and Class L shares. The Fund offers Class C, Class I, and Class L shares each by a different prospectus. An investment in any share class of the Fund represents an investment in the same assets of the Fund. However, the minimum investment amounts, sales loads, and ongoing fees and expenses for each share class may be different. The fees and expenses for the Fund are set forth in “Summary of Fund Expenses”. Certain share class details are set forth in “Plan of Distribution”.

The following table shows the amounts of Fund Shares that have been authorized and are outstanding as of the date of this Prospectus:

(1)	(2)	(3)	(4)
Title of Class	Amount Authorized	Amount Held by Fund or for its Account	Amount Outstanding Excluding Amount Shown Under (3)
Shares of Beneficial Interest	Unlimited	None	[ ____]

Holders of shares will be entitled to the payment of dividends when, as and if declared by the Board. The Fund currently intends to accrue dividend distributions daily and make payment to its shareholders no less frequently than monthly. 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 same class 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, in certain limited circumstances, may 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 generally will not 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 Fund’s Transfer Agent 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.

Other Classes of Shares. The Fund offers Class I, Class C, and Class L shares each by a different prospectus. Class I, Class C, and Class L shares each have different investment minimums, and are subject to sales charges (Class A and Class L shares) and distribution and/or shareholder servicing fee (Class C and Class L shares).

ANTI-TAKEOVER PROVISIONS IN THE DECLARATION OF TRUST

The Amended and Restated 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 Trustees. 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

ALPS Distributors, Inc., located at 1290 Broadway, Suite 1100, Denver, CO 80203, 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 net asset value. The Distributor also may enter into selected dealer agreements with other broker dealers for the sale and distribution of the Fund’s shares, including with affiliates of the Advisor. In reliance on Rule 415, the Fund intends to offer to sell up to $[____] of its shares, on a continual basis, through the Distributor. No arrangement has been made to place funds received in an escrow, trust or similar account. The Distributor is not required to sell any specific number or dollar amount of the Fund’s shares, but will use its reasonable 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 marker in Fund shares. Class A shares are not currently subject to a Distribution Fee.

The Distributor has entered into a “wholesaling” agreement with Bluerock Capital Markets, LLC (“BCM”), a registered broker-dealer and an affiliate of the Advisor. Pursuant to the terms of the wholesaling agreement, BCM will seek to market and otherwise promote the Fund through various “wholesale” distribution channels, including regional and independent retail broker-dealers.

The Advisor or its affiliates, in the Advisor’s discretion and from their own resources, may pay additional compensation to brokers or dealers in connection with the sale and distribution of Fund shares (the “Additional Compensation”). In return for the 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 and 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, or determined in some other manner. 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 may pay a servicing fee to the selected securities dealers and other financial industry professionals for providing ongoing broker-dealer services in respect of shareholders. 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 or the Advisor may reasonably request.

The Fund and the Advisor have agreed to indemnify the Distributor against certain liabilities, including liabilities under the Securities Act of 1933, 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 gross 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 the Advisor and its affiliates in the ordinary course of business.

Prior to the initial public offering of shares, the Advisor 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 DST Systems, Inc., the Fund’s Transfer Agent. 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 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.

By Mail

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

Bluerock Institutional Mortgage Income Fund
c/o DST Systems, Inc.

PO Box 219169

Kansas City, MO 64121

All checks must be in US 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 neither accept third party checks, Treasury checks, credit card checks, traveler’s checks or starter checks for the purchase of shares, nor post-dated checks, post-dated on-line bill pay checks, or any conditional purchase order or payment.

The Transfer Agent will charge a $25 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.

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 1-844-819-8287 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: DST Systems, Inc.
Account #: (number provided by calling toll-free number above)
Further Credit:
Bluerock Institutional Mortgage Income Fund
(shareholder registration)
(shareholder account number)

By Wire — Subsequent Investments

Before sending a wire, investors must contact DST Systems, Inc. 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 $10,000 on specified days of each month into your established Fund account. Please contact the Fund at 1-844-819-8287 for more information about the Fund’s Automatic Investment Plan.

By Telephone

Investors may purchase additional shares of the Fund by calling 1-844-819-8287. 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 Transfer Agent 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 the Transfer Agent at 1-844-819-8287 for additional assistance when completing an application.

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

Share Class Considerations

When selecting a share class, you should consider the following:

●

which share classes are available to you;

●

the amount you intend to invest;

●

how long you expect to own the shares; and

●

total costs and expenses associated with a particular share class.

Class A Shares

Class A shares are sold at the prevailing net asset value per Class A share plus the applicable sales load (which may be reduced as described below); however, the following are additional features that should be taken into account when purchasing Class A shares:

●

a minimum initial investment of $2,500 for regular accounts and $1,000 for retirement plan accounts, and a minimum subsequent investment of at least $100 for regular accounts and $50 for retirement plan accounts;

●

a monthly shareholder servicing fee at an annual rate of up to 0.25% of the average daily net assets of the Fund attributable to Class A shares; and

●

Investors in Class A shares may pay a sales load based on the amount of their investmentup to 5.75%, as set forth in the table below. A reallowance will be made by the Distributor from the sales load paid by each investor. There are no sales loads on reinvested distributions. The Fund reserves the right to waive sales loads. The following sales loads apply to your purchases of Class A shares of the Fund:

Amount Invested	Total Sales Load as a % of Offering Price	Total Sales Load as a % of Amount Invested	Broker Commission / Total Dealer Reallowance
Under $100,000	5.75%	6.10%	5.00%
$100,000 to $249,000	4.75%	4.99%	4.00%
$250,000 to $499,999	3.75%	3.90%	3.00%
$500,000 to $999,999	2.50%	2.56%	2.00%
$1,000,000 and above	0.00%	0.00%	0.00%*

Selling brokers, or other financial intermediaries that have entered into distribution agreements with the Distributor may receive a commission of up to 1.00% of the purchase price of Class A shares.

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

●

reinvesting dividends or distributions;

●

participating in an investment advisory or agency commission program under which you pay a fee to an investment advisor or other firm for portfolio management or brokerage services;

●

exchanging an investment in Class A (or equivalent type) shares of another fund for an investment in the Fund;

●

a current or former director or Trustee of the Fund;

●

an employee (including the employee’s spouse, domestic partner, children, grandchildren, parents, grandparents, siblings, and any dependent of the employee, as defined in section 152 of the Internal Revenue Code) of the Advisor or its affiliates or of a broker-dealer authorized to sell shares of the Fund; or

●

purchasing shares through the Advisor; or

●

purchasing shares through a financial services firm (such as a broker-dealer, investment advisor or financial institution) that has a special arrangement with the Fund.

In addition, concurrent purchases of Class A shares 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 Class A 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 Class A shares of the Fund as part of your current investment as well as reinvested dividends. To qualify for this option, you must be either:

●

an individual;

●

an individual and spouse purchasing shares for your own account or trust or custodial accounts for your minor children; or

●

a fiduciary purchasing for any one trust, estate or fiduciary account, including employee benefit plans created under Sections 401, 403 or 457 of the Internal Revenue Code, including related plans of the same employer.

For example, the following illustrates the operation of the Right of accumulation:

If a shareholder owned Class A shares of the Fund through an investment of $100,000 (including sales charge), and wished to purchase additional Class A shares of the Fund with a purchase price of $50,000 (including sales charge). The sales charge applicable on the $50,000 purchase would be at the 4.75% rate, rather than the 5.50% rate that would otherwise apply to a $50,000 purchase. The discount will be applied to the current purchase (i.e., the $50,000 purchase), not to any previous transaction.

You may add the current value of all of your existing investments in the Fund and other funds advised by the Advisor or its affiliates (collectively, “Bluerock Family Funds”) to determine the front-end sales charge to be applied to your current Class A purchase. Only balances currently held entirely at the Bluerock Family Funds or, if held in an account through a financial services firm, at the same firm through whom you are making your current purchase, will be eligible to be added to your current purchase for purposes of determining your Class A sales charge. You may include the value of Bluerock Family Funds’ investments held by the members of your immediately family, including the value of Bluerock Family Funds’ investments held by you or them in individual retirement plans, such as individual retirement accounts, or IRAs, provided such balances are also currently held entirely at the Bluerock Family Funds or, if held in an account through a financial services firm, at the same financial services firm through whom you are making your current purchase. The value of shares eligible for a cumulative quantity discount equals the cumulative cost of the shares purchased (not including reinvested dividends) or the current account market value; whichever is greater. The current market value of the shares is determined by multiplying the number of shares by the previous day’s NAV. If you believe there are cumulative quantity discount eligible shares that can be combined with your current purchase to achieve a sales charge breakpoint, you must, at the time of your purchase (including at the time of any future purchase) specifically identify those shares to your current purchase broker-dealer.

If you plan to rely on this right of accumulation, you must notify the Fund’s 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 Class A 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 Class A 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 Class A 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.

Shareholder Service Expenses

The Fund has adopted a “Shareholder Services Plan” with respect to its Class A shares under which the Fund may compensate financial industry organizations for providing ongoing administration of client accounts 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 or the Advisor may reasonably request. Under the Shareholder Services Plan, the Fund, with respect to its Class A shares, may incur expenses on an annual basis equal up to 0.25% of its average net assets attributable to Class A shares. Because these fees are paid from the Fund’s assets on an ongoing basis they will increase your costs over time and may cost you more than paying other types of sales charges..

Distribution Plan

Class A shares are not subject to a Distribution Fee.

LEGAL MATTERS

Certain legal matters in connection with the shares will be passed upon for the Fund by Thompson Hine, LLP 41 South High Street, Suite 1700, Columbus, Ohio 43215-6101.

REPORTS TO SHAREHOLDERS

The Fund sends 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. A shareholder must call 1-844-819-8287 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

RSM US LLP is the independent registered public accounting firm for the Fund and audits the Fund’s financial statements. RSM US LLP is located at 555 Seventeenth Street, Suite 1000, Denver, CO 80202.

ADDITIONAL INFORMATION

The Prospectus and the SAI do not contain all of the information set forth in the Registration Statement that the Fund has filed with the SEC (file No. 333-206988). The complete Registration Statement may be obtained from the SEC at www.sec.gov. See the cover page of this prospectus for information about how to obtain a paper copy of the Registration Statement or SAI without charge.

TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION

General Information and History
Investment Objective and Policies
Repurchases and Transfers of Shares
Management of the Fund
Codes of Ethics
Proxy Voting Policies and Procedures
Control Persons and Principal Holders
Investment Advisory and Other Services
Portfolio Manager
Allocation of Brokerage
Tax Status
Other Information
Independent Registered Public Accounting Firm
Financial Statements

NOTICE OF PRIVACY POLICY & PRACTICES

Rev. February 2018

PRIVACY NOTICE


FACTS	WHAT DOES THE BLUEROCK INSTITUTIONAL MORTGAGE INCOME FUND DO WITH YOUR PERSONAL INFORMATION?

Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.

What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include:
	■	Social Security number	■	Purchase History
	■	Assets	■	Account Balances
	■	Retirement Assets	■	Account Transactions
	■	Transaction History	■	Wire Transfer Instructions
	■	Checking Account Information
	When you are no longer our customer, we may continue to share your personal information as described in this notice.

How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons the Bluerock Institutional Mortgage Income Fund chooses to share; and whether you can limit this sharing.


Reasons we can share your personal information	Does Bluerock Institutional Mortgage Income Fund share?	Can you limit this sharing?
For our everyday business purposes – such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes – to offer our products and services to you	No	We don't share
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes – information about your transactions and experiences	No	We don't share
For our affiliates' everyday business purposes – information about your creditworthiness	No	We don't share
For nonaffiliates to market to you	No	We don't share


Questions?	Call 1-844-819-8287

Who we are

Who is providing this notice?		Bluerock Institutional Mortgage Income Fund

What we do

How does Bluerock Institutional Mortgage Income Fund protect my personal information?

To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings.

Our service providers are held accountable for adhering to strict policies and procedures to prevent any misuse of your nonpublic personal information.

How does Bluerock Institutional Mortgage Income Fund collect my personal information?			We collect your personal information, for example, when you ■ Open an account ■ Provide account information ■ Give us your contact information ■ Make deposits or withdrawals from your account ■ Make a wire transfer ■ Tell us where to send the money ■ Tells us who receives the money ■ Show your government-issued ID ■ Show your driver's license We also collect your personal information from other companies.
Why can't I limit all sharing?			Federal law gives you the right to limit only ■ Sharing for affiliates' everyday business purposes – information about your creditworthiness ■ Affiliates from using your information to market to you ■ Sharing for nonaffiliates to market to you State laws and individual companies may give you additional rights to limit sharing.
Definitions
Affiliates			Companies related by common ownership or control. They can be financial and nonfinancial companies. ■ Bluerock Institutional Mortgage Income Fund does not share with our affiliates.
Nonaffiliates			Companies not related by common ownership or control. They can be financial and nonfinancial companies ■ Bluerock Institutional Mortgage Income Fund does not share with nonaffiliates so they can market to you.
Joint marketing			A formal agreement between nonaffiliated financial companies that together market financial products or services to you. ■ Bluerock Institutional Mortgage Income Fund doesn’t jointly market.

BLUEROCK INSTITUTIONAL MORTGAGE INCOME FUND

Class A Shares ([___]) of Beneficial Interest

PROSPECTUS

[______], 2018

Investment Advisor

Bluerock Credit Fund Advisor, LLC

Sub-Advisors

RREEF America L.L.C.

Mercer Investment Management, Inc.

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.

SUBJECT TO COMPLETION PRELIMINARY PROSPECTUS DATED [______ __], 2018

PROSPECTUS

[____], 2018

Bluerock Institutional Mortgage Income Fund

Class C Shares ([___]) of Beneficial Interest

The Bluerock Institutional Mortgage Income Fund (the "Fund") is a continuously offered, non-diversified, closed-end management investment company that is operated as an interval fund.

●

Shares of the Fund are not redeemable, but shall be subject to the repurchase offer provisions set forth below.

●

Although the Fund will offer to repurchase at least 5% of each shareholder’s shares on a quarterly basis in accordance with the Fund's repurchase policy, the Fund will not be required to repurchase shares at a shareholder's option nor will shares be exchangeable for units, interests or shares of any other security.

●

The Fund is not required to extend, and shareholders should not expect the Fund’s Board of Trustees (the "Board" or the "Trustees") to authorize, repurchase offers in excess of 5% of outstanding shares per quarter.

●

This prospectus concisely provides you the information that a prospective investor should know about the Fund before investing in the shares of the Fund that are being offered through this prospectus. You are advised to read this prospectus carefully and to retain it for future reference. Additional information about the Fund, including the Fund’s Statement of Additional Information (“SAI”), dated [ _________, 2018], has been filed with the SEC. Information regarding the Fund is available on the SEC’s website at http://www.sec.gov, including the SAI. 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. The table of contents of the SAI appears on page [39] of this prospectus. The SAI is incorporated by reference into this prospectus (legally made a part of this prospectus). The SAI, Fund annual and semi-annual reports and other information and shareholder inquiries regarding the Fund are available free of charge and may be requested by writing the Fund at c/o DST Systems PO Box 218445 Kansas City, MO 64121-9445 (the “Transfer Agent”), by calling the Transfer Agent toll-free at 1-844-819-8287, or by visiting the Fund’s website at http://www.bluerockfunds.com.

The Sub-Advisors. The Advisor has engaged RREEF America L.L.C. ("RREEF") and Mercer Investment Management, Inc. (“Mercer”) (each a "Sub-Advisor" and collectively the “Sub-Advisors”), both SEC registered investment advisers under the Advisers Act, to provide services for investment management of the Fund’s portfolio. RREEF was founded in 1975 and is one of the largest real estate investment managers serving institutional investors globally with more than 400 professionals and staff located in 27 locations around the world with over $57 billion in assets under management as of September 30, 2017. Mercer is a leading global institutional investment advisor serving sovereign wealth funds, pension plans, banks, family offices, insurance companies, endowments and foundations for more than 40 years and, together with its global investment management affiliates, has over $213 billion in assets under management as of September 30, 2017 and over $10.2 trillion in assets under advisement as of June 30, 2017.

Securities Offered. The Fund engages in a continuous offering of classes of shares of beneficial interest of the Fund, including Class C shares offered by this prospectus. The Fund has registered 20,000,000 shares, and is authorized as a Delaware statutory trust to issue an unlimited number of shares. The Fund is offering to sell, through its principal underwriter, ALPS Distributors, Inc. (the "Distributor") on a continual basis under the terms of this prospectus, 20,000,000 shares of beneficial interest at net asset value (“NAV”) per share of the relevant share class, plus any applicable sales load. The initial NAV is $25.00 per Class C share. The Class C shares are not subject to sales charges. The Fund also offers Class A, Class I and Class L shares, each by a separate prospectus. The minimum initial investment by a shareholder for Class C shares is $2,500 for regular accounts and $1,000 for retirement plan accounts and a minimum subsequent investment of at least $100 for regular accounts and $50 for retirement plan accounts The Distributor is not required to sell any specific number or dollar amount of the Fund's shares, but will use best efforts to sell the shares. Monies received will be invested promptly and no arrangements have been made to place such monies in an escrow, trust or similar account. See "Plan of Distribution."

TABLE OF CONTENTS

PROSPECTUS SUMMARY
SUMMARY OF FUND EXPENSES
FINANCIAL HIGHLIGHTS
USE OF PROCEEDS
THE FUND
INVESTMENT OBJECTIVE, POLICIES AND STRATEGIES
RISK FACTORS
MANAGEMENT OF THE FUND
DETERMINATION OF NET ASSET VALUE
CONFLICTS OF INTEREST
QUARTERLY REPURCHASE OF SHARES
DISTRIBUTION POLICY
DIVIDEND REINVESTMENT POLICY
U.S. FEDERAL INCOME TAX MATTERS
DESCRIPTION OF CAPITAL STRUCTURE AND SHARES
ANTI-TAKEOVER PROVISIONS IN DECLARATION OF TRUST
PLAN OF DISTRIBUTION
LEGAL MATTERS
REPORTS TO SHAREHOLDERS
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
ADDITIONAL INFORMATION
TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION
NOTICE OF PRIVACY POLICY & PRACTICES

PROSPECTUS SUMMARY

The Fund

Bluerock Institutional Mortgage Income Fund is a continuously offered, non-diversified, closed-end management investment company. See "The Fund." The Fund is an interval fund that provides investor liquidity by offering to make quarterly repurchases of each class of shares at that class of shares’ net asset value, which will be calculated on a daily basis. See "Quarterly Repurchases of Shares" and “Determination of Net Asset Value.”

Investment Objective, Strategy and Policies

The Fund’s investment objective is to generate attractive, long-term risk-adjusted returns, with an emphasis on current income with lower volatility and lower correlation to the broader markets.

The Fund pursues its investment objective by investing primarily in a portfolio of institutional private and public real estate-related debt instruments and securities.

●

The Fund may invest in real estate debt instruments and securities of any duration, maturity or structure, and the amount of the invested debt as a percentage of a particular property's stabilized value (commonly known as the “loan to value ratio”) will generally range from 50% to 80%.

By investing in the Fund, the Advisor expects that the shareholders may realize the following potential benefits:

●

Access to Attractive Risk-Adjusted Returns from Institutional Private Real Estate Debt Investments – The Fund enables investors to invest in institutional real estate private debt investments that may not otherwise be available to the typical retail investor due to the institutional focus of the Sub-Advisors. The Fund invests in institutional real estate private debt investments that offer attractive risk-return performance, with downside protection due to the value of the underlying real estate as collateral, and the availability of a an equity cushion. In addition, many of the private real estate debt investments in which the Fund invests are typically intended for large, institutional investors due to the large minimum investment size, which would limit the ability of individual, non-institutional investors to participate in such investments.

●

Access to Relationship-based Deal Flow and Directly Originated Debt – The Fund will have access to the Americas Real Estate Division of Deutsche Asset Management's substantial direct, long-standing relationships across the real estate industry including borrowers, brokers, financial institutions, lenders and other market participants, and the Americas Real Estate Division of Deutsche Asset Management to source transactions. This comprehensive access to sourcing may offer strategic benefits, including a more efficient deployment of capital and the potential to identify investment opportunities before they are broadly marketed, enabling the Fund to deliver attractive yields to investors.

●

Access to RREEF's Substantial Platform and Resources – The Fund will have access to the Americas Real Estate Division of Deutsche Asset Management's established underwriting and structuring capabilities to execute its investment strategy, and to its substantial real estate platform, providing the Fund access to market data on a scale not available to many competitors. RREEF was founded in 1975 and is one of the largest real estate investment managers globally with more than 400 professionals and staff located in 27 locations around the world and over $57 billion in assets under management as of September 30, 2017.

●

Investment Advisor

Sub-Advisors

The Sub-Advisors are engaged by the Advisor and will be paid solely by the Advisor from its management fee. Shareholders do not pay any Sub-Advisor directly.

Advisor Fees and Expenses

The Advisor is entitled to receive a monthly fee at the annual rate of 1.85% of the Fund's daily net assets. The Advisor and the Fund have entered into an expense limitation and reimbursement agreement (the "Expense Limitation Agreement") under which the Advisor has contractually agreed to waive its fees and to pay or absorb the ordinary operating expenses of the Fund (including offering and organizational expenses, but excluding taxes, interest, brokerage commissions, acquired fund fees and expenses and extraordinary expenses), to the extent that such expenses exceed 3.35% per annum of the Fund's average daily net assets (the "Expense Limitation") attributable to Class C shares. 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, subject to the limitations that: (1) the reimbursement for fees and expenses will be made only if payable not more than three years from the date which they were incurred; and (2) the reimbursement may not be made if it would cause the current, or then in effect Expense Limitation to be exceeded. The Expense Limitation Agreement will remain in effect at least until January 31, 2020, unless and until the approves its modification or termination. After January 31, 2020, the Expense Limitation Agreement may be renewed at the Advisor’s and Board's discretion. See "Management of the Fund."

Administrator, Accounting Agent and Transfer Agent

ALPS Fund Services, Inc. (the “Administrator”) serves as the Fund’s administrator and accounting agent. DST Systems, Inc. (the "Transfer Agent") serves as the transfer agent of the Fund. See "Management of the Fund."

Distribution Fees

Class C shares are subject to a monthly Distribution Fee which will accrue at an annual rate equal to 0.75% of the average daily net assets of the Fund. See “Plan of Distribution.”

Closed-End Fund Structure

Closed-end funds differ from open-end mutual funds in that closed-end funds do not typically redeem their shares at the option of the shareholder. Closed-end fund shares typically trade in the secondary market via a stock exchange. However, unlike other closed-end funds, the Fund is an “interval” fund whose shares will not be listed on a stock exchange and therefore will not have a secondary market. Instead, the Fund will provide limited liquidity to shareholders by offering to repurchase a limited amount of the Fund's shares (at least 5%) quarterly, which is discussed in more detail below. The Fund is subject to continuous asset in-flows, but not continuous out-flows.

Share Classes

The Fund offers four classes of shares: Class A, Class C, Class I, and Class L shares. An investment in any share class of the Fund represents an investment in the same assets of the Fund. However, the sales loads, purchase restrictions, and ongoing fees and expenses for each share class are different. The loads, fees and expenses for the Fund are set forth in “Summary of Fund Expenses.” If an investor has hired an intermediary and is eligible to invest in more than one class of shares, the intermediary may help determine which share class is appropriate for that investor. When selecting a share class, you should consider which share classes are available to you, how much you intend to invest, how long you expect to own shares, and the total costs and expenses associated with a particular share class. The Fund offers Class A, Class I, and Class L shares each by a separate prospectus.

Repurchases of Shares

The Fund is an interval fund and, as such, has adopted a fundamental policy to make quarterly repurchase offers, at net asset value, of no less than 5% of the Fund’s shares outstanding. 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% 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."

Investor Suitability

Summary of Risks

Market Risk. An investment in the Fund's shares is subject to investment risk, including the possible loss of the entire principal amount invested. The value of Fund investments, like other market investments, may move up or down, sometimes rapidly and unpredictably, which will subject shareholders to risk. The value of your shares in the Fund at any point in time may be worth less than the value of your original investment, even after taking into account any reinvestment of dividends and distributions.

Concentration Risk. Because the Fund will concentrate its investments in the real estate industry, the Fund will be subject to greater volatility risk than a fund that is not concentrated in a single industry. The Fund's real estate-related investments may also be concentrated in regions or states, which exposes the Fund to region- or state-specific economic risks.

Credit Risk; Junior Tranches. It is possible that the Fund’s borrowers or issuers may not make scheduled interest and/or principal payments on their loans and/or debt securities, which may result in losses or reduced cash flow to the Fund, either or both of which may cause the Net Asset Value (NAV) of, or the distributions by, the Fund to decrease. In addition, the credit quality of securities held by the Fund may fall if an issuer's financial condition deteriorates. This also may negatively impact the value of and the Fund’s returns on its investment in such securities. Also, the Fund expects to allocate a portion of its assets to investments in junior tranches of debt, such as subordinated notes (sometimes generically referred to as “B Notes”) and mezzanine loans. Generally speaking, such junior level investments are riskier and therefore subject to a higher level of risk of non-payment or default, even if the more senior levels of debt related to such investment are performing according to their terms. Thus, the Fund’s investments in junior tranches of debt will be subject to amplified credit risks.

Prepayment Risk. Debt securities may be subject to prepayment risk because borrowers are typically able to repay their debt obligations prior to maturity principal. Consequently, a debt security's maturity may be longer or shorter than anticipated. When interest rates fall, debt obligations tend to be refinanced or otherwise paid off more quickly than originally anticipated. If that occurs with respect to the Fund’s investments, the Fund may have to invest the prepaid proceeds in securities with lower yields. When interest rates rise, obligations will tend to be paid off by the obligor more slowly than anticipated, preventing the Fund from reinvesting at higher comparable or yields. For certain investments, lower-than-expected prepayment rates may expose investments in the junior tranches of MBS, CLOs or other CREs to credit risks for longer periods of time.

CLO Risk. Collateralized Debt Obligations (CLO) are securities backed by an underlying portfolio of debt obligations. CLOs issue classes or “tranches” that vary in risk and yield and may experience substantial losses due to actual defaults, decrease of market value due to collateral defaults and removal of subordinate tranches, market anticipation of defaults and investor aversion to CLO securities as a class. The risks of investing in CLOs depend largely on the tranche invested in and the type of the underlying debts and loans in the tranche of the CLO, in which the Fund invests. CLOs also carry risks including, but not limited to, interest rate risk and credit risk.

Liquidity Risk – Quarterly Repurchases. The Fund’s shares are not listed on any securities exchange and are not publicly traded. There currently is no secondary market for the Fund's shares and the Advisor does not expect that a secondary market will develop. Limited liquidity is provided to shareholders only through the Fund's quarterly repurchase offers, for no less than 5% of the Fund's shares outstanding at net asset value. There is no guarantee that all shareholders seeking liquidity will be able to sell all of the shares that they desire to sell in a quarterly repurchase offer.

Leveraging Risk. The Fund is authorized to use leverage for investment purposes and to satisfy redemption requests. The use of leverage will cause the Fund to incur additional expenses and may significantly magnify the Fund's losses in the event of adverse performance of the Fund’s underlying investments.

U.S. Federal Income Tax Matters

Distribution Policy

Unless a shareholder elects otherwise, the shareholder's distributions will be reinvested in additional shares of the same class 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). Distributions are made at the class level, so they may vary from class to class within the Fund. See "Dividend Reinvestment Policy."

Custodian

UMB Bank, N.A ("Custodian"), with principal offices at 1010 Grand Boulevard, Kansas City, Missouri 64106, serves as the Fund's custodian. See "Management of the Fund."

SUMMARY OF FUND EXPENSES

Shareholder Transaction Expenses	Class C
Maximum Sales Load (as a percent of offering price)	None
Early Withdrawal Charges on Shares Repurchased Less Than 365 Days After Purchase (as a percent of original purchase price)	None
Annual Expenses (as a percentage of average net assets attributable to shares)
Management Fees	[1.85]%
Other Expenses ¹	[ ]%
Shareholder Servicing Expenses	0.25%
Distribution Fee	0.75%
Remaining Other Expenses	[ ]%
Acquired Fund Fees and Expenses ^{1, 2}	[ ]%
Total Annual Expenses ¹	[ ]%
Fee Waiver and Reimbursement ^1,3	[ ]%
Total Annual Expenses (after fee waiver and reimbursement) ¹	[ ]%

Estimated for the current fiscal year.

Acquired Fund Fees and Expenses are the indirect costs of investing in other investment companies. These indirect costs may include performance fees paid to the acquired fund’s advisor or its affiliates. It does not include brokerage or transaction costs incurred by the acquired funds. The operating expenses in this fee table will not correlate to the expense ratio in the Fund's financial highlights because the financial statements include only the direct operating expenses incurred by the Fund.

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 annual operating expenses of the Fund (including offering and organizational expenses, but excluding taxes, interest, brokerage commissions, acquired fund fees and expenses and extraordinary expenses) to the extent that they exceed 3.35% per annum of the Fund's average daily net assets attributable to Class C shares. 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, subject to the limitations that: (1) the reimbursement for fees and expenses will be made only if payable not more than three years from the date in which they were incurred; and (2) the reimbursement may not be made if it would cause the expense limitation in effect at the time the expenses were waived or absorbed to be exceeded. The Expense Limitation Agreement will remain in effect at least until January 31, 2020, unless and until the Board approves its modification or termination. This agreement may be terminated only by the Fund's Board of Trustees. See "Management of the Fund."

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(the Example assumes the Fund's Expense Limitation Agreement will remain in effect through January, 2020):

Share Class	1 Year	3 Years
Class C Shares

FINANCIAL HIGHLIGHTS

Because the Fund is newly formed and has no performance history as of the date of this Prospectus, a financial highlights table for the Fund has not been included in this Prospectus.

USE OF PROCEEDS

The net proceeds of the Fund’s continuous offering of shares, after payment of the sales load (if applicable) and other associated expenses, will be invested in accordance with the Fund's investment objective and policies (as stated below) as soon as practicable after receipt. The Fund pays organizational costs and its offering expenses incurred with respect to its initial and continuous offering. Pending investment of the net proceeds in accordance with the Fund's investment objective and policies, the Fund will invest in money market or short-term fixed-income mutual funds. Investors should expect, therefore, that before the Fund has fully invested the proceeds of the offering in accordance with its investment objective and policies, the Fund's assets would earn interest income at a modest rate. While the Fund does not anticipate a delay in the investment of net proceeds from investors, the Fund will seek shareholder approval if the net proceeds are not invested within six months of the Fund’s initial offering in accordance with the rules under the 1940 Act.

THE FUND

The Fund is a continuously offered, non-diversified, closed-end management investment company that is operated as an interval fund. The Fund was organized as a Delaware statutory trust on September 11, 2015. The Fund's principal office is located at 712 Fifth Avenue, 9th Floor, New York, NY 10019, and its telephone number is (212) 843-1601.

INVESTMENT OBJECTIVE, POLICIES AND STRATEGIES

Investment Objective and Policies

The Fund's investment objective is to generate attractive, long-term risk-adjusted returns, with an emphasis on current income with lower volatility and lower correlation to the broader markets.

●

Private Real Estate Debt Investments – The Fund's private real estate debt investments are expected to consist of secured first mortgage loans, secured second mortgage loans, secured mezzanine loans, secured construction or transitional loans, and preferred equity investments.

●

The Fund may invest in real estate debt instruments and securities of any duration, maturity or structure, and the amount of the invested debt as a percentage of a particular property's stabilized value (commonly known as the “loan to value ratio”) will generally range from 50% to 80%.

The Advisor Expects that the Fund’s Shareholders may realize the following potential benefits:

●

Access to Attractive Risk-Adjusted Returns from Institutional Private Real Estate Debt Investments – The Fund enables investors to invest in institutional real estate private debt investments that may not otherwise be available to the typical retail investor due to the institutional focus of the Sub-Advisors. The Fund invests in institutional real estate private debt investments that offer attractive risk-return performance with downside protection due to the value of the underlying real estate as collateral, and the availability of an equity cushion. In addition, many of the private real estate debt investments in which the Fund invests are typically intended for large, institutional investors due to the large minimum investment size, limiting the availability to individual, non-institutional investors.

●

Access to Relationship-based Deal Flow and Directly Originated Debt – The Fund will have access to the Americas Real Estate Division of Deutsche Asset Management's substantial direct, long-standing relationships across the real estate industry including borrowers, brokers, financial institutions, lenders and other market participants, including the real estate equity transaction teams to source transactions. This comprehensive access to sourcing may offer strategic benefits including a more efficient deployment of capital and the identification of certain investment opportunities before they are presented to the broader market, enabling the Fund to deliver attractive yields to investors.

●

Access to RREEF's Substantial Platform and Resources – The Fund will have access to the Americas Real Estate Division of Deutsche Asset Management's established underwriting and structuring capabilities to execute its investment strategy, and to its substantial real estate platform which provides the Fund access to market data on a scale not available to many competitors. RREEF was founded in 1975 and is one of the largest real estate investment managers globally with more than 400 professionals and staff located in 27 locations around the world and over $57 billion in assets under management as of September 30, 2017.

●

Access to Mercer’s Platform and Proprietary Intellectual Capital. The Fund will have access to Mercer’s proprietary intellectual capital, ongoing research, opinions and market data to assist the Advisor in setting strategy and portfolio planning to optimize risk-adjusted returns. Mercer Investment Management is a leading global institutional investment advisor serving sovereign wealth funds, pension plans, banks, family offices, insurance companies, endowments and foundations for more than 40 years, and, together with its global investment management affiliates, has over $213 billion in assets under management as of September 30, 2017 and over $10.2 trillion in assets under advisement as of June 30, 2017.

Fund's Target Investment Portfolio

The Advisor and RREEF intend to execute the Fund's investment strategy primarily by investing in a diverse portfolio of institutional private and public real estate debt investments and securities. The Fund intends to invest in debt secured by high quality, desirable properties sponsored by experienced, financially sound borrowers, and located primarily in major and select regional markets within the United States. With respect to selecting investments, the Advisor and RREEF will consider various inputs regarding the potential borrower, including relevant experience, equity commitment, financial strength and business plan, among other factors, and will pursue a value-driven approach focused on real estate supply and demand fundamentals to underwriting and diligence.

The Fund may invest in a variety of investments in pursuing its investment objective, including those listed below.

Private Real Estate Debt Investments:

●

Construction or Transitional Loans: Construction or Transitional Loans to borrowers whose underlying real estate interest will serve as collateral as a property is undergoing a repositioning, development or value enhancement strategy. These loan investments carry additional risk, as repayment will depend on the borrower’s ability to successfully execute its particular repositioning, development or value enhancement strategy.

●

Public Real Estate Debt Investments:

●

Commercial Real Estate – Collateralized Loan Obligation (CRE-CLO): Commercial Real Estate – Collateralized Loan Obligations (CRE-CLO), similar to mortgage backed securities are a type of fixed income security that is secured by a pool of mortgages on numerous commercial [and or residential] properties. Typically the underlying loans supporting a CRE-CLO floating rate are shorter duration in nature than other CMBS investments.

Investment Process

Portfolio Planning. The Advisor and RREEF teams, including Research & Strategy, the debt investments team, performance and risk management and the broader platform, integrate these viewpoints along with ongoing research, opinions and market data from Mercer, into a specific investment strategy and strategic plan to fulfill the Fund's primary investment objective to generate attractive, long-term risk-adjusted returns, with an emphasis on current income with lower volatility and lower correlation to the broader markets. Several factors are considered in portfolio planning including, but not limited to, the Fund’s objectives and constraints, risk-return expectations, current Fund investment allocations and the overall market outlook, all of which are reviewed and approved by RREEF’s Investment Committee.

Portfolio Construction. The Fund's Portfolio Managers work closely with other RREEF’s professionals to target the investment needs of the Fund in sourcing transactions and screening the investment pipeline in an effort to shape the desired target portfolio.

●

Transaction Approval and Execution. Deutsche/RREEF will prepare a memorandum detailing its analysis of the proposed investment and present the transaction to both the RREEF and the Advisor’s Investment Committees for approval. Each investment is reviewed and evaluated for its risk/return profile and impact on the portfolio's geographic and sector diversification, credit characteristics and current and total return. If final approval of the investment is given by both Investment Committees, Deutsche/RREEF will be responsible to coordinate and complete all aspects of closing and funding within the scope of approval that was given.

●

Asset Management and Realizations. After the closing and funding of an approved transaction, RREEF will actively manage it and the Fund's other investments. RREEF’s senior personnel are highly experienced in loan and securities asset management. From the closing of a loan or investment through its final repayment, RREEF’s dedicated asset management team will be in regular contact with borrowers, servicers and/or local market experts, monitoring performance of the collateral, anticipating property and market issues, and enforcing rights and remedies when appropriate. The Advisor believes the Fund’s access to the RREEF’s real estate platform, and the detailed market information it provides, as well as to Mercer’s experience and expertise, will provide the Fund with an advantage in regard to the active management of the Fund’s loans and investments. Investment realization opportunities are continually monitored and evaluated to seek to maximize returns as well as to meet the Fund's investment objective including appropriate risk management, subject to RREEF’s Investment Committee approval.

Additional Information Regarding Investment Strategy

The Fund may, from time to time, take defensive positions that are inconsistent with the Fund's principal investment strategy in attempting to respond to adverse market, economic, political or other conditions. During such times, the Advisor or RREEF 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. In these and in other cases, the Fund may not achieve its investment objective. RREEF may invest the Fund's cash balances in any investments it deems appropriate. The Advisor and RREEF expect 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. Many of the considerations entering into recommendations and decisions of the Advisor, RREEF and the Fund's portfolio managers are subjective.

The frequency and amount of portfolio purchases and sales (known as the "portfolio turnover rate") will vary from year to year. It is not anticipated that the Fund's portfolio turnover rate would exceed 100% under normal market conditions. The Fund’s portfolio turnover rate will not be a limiting factor with regard to when RREEF deem portfolio changes appropriate. Although the Fund generally does not intend to trade for high-frequency short-term profits, securities may be sold without regard to the length of time held when, in the opinion of the Advisor or RREEF, 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 or placement agent commissions and may generate short-term capital gains taxable as ordinary income. See "Tax Status" in the Fund's SAI.

There is no assurance 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."

Investment Policies

RISK FACTORS

An investment in the Fund's shares is subject to risks. The value of the Fund's investments will increase or decrease based on changes in the prices of the investments it holds. This will cause the value of the Fund's shares to increase or decrease. You could lose money by investing in the Fund. By itself, the Fund does not constitute a balanced investment program. Before investing in the Fund you should consider carefully the following risks. There may be additional risks that the Fund does not currently foresee or consider material. You may wish to consult with your legal or tax advisors before deciding whether to invest in the Fund.

Market Risk. An investment in the Fund's shares is subject to investment risk, including the possible loss of the entire principal amount invested. An investment in the Fund's shares represents an indirect investment in the real estate-related debt securities and other assets held by the Fund. The value of these securities, like other market investments, may move up or down, sometimes rapidly and unpredictably, which will subject shareholders to risk.

Concentration Risk. The Fund intends to concentrate its investments in the real estate industry, and invest more than 25% of its assets in real estate-related debt investments. Therefore, the Fund will be subject to greater volatility risk than registered funds that are not concentrated in a single industry. In addition, the Fund's investments may be concentrated in specific regions or states within the United States, which would expose the Fund to greater region- or state-specific risks than if the Fund were to invest throughout the country or internationally.

There are also special risks associated with particular real estate sectors including, but not limited to, those risks described below:

Other factors may contribute to real estate industry risks and, therefore, to risks associated with investments by the Fund in real estate-related debt and debt securities:

Financial Leverage. The Fund’s borrowers may be highly leveraged and financial covenants may affect their ability to operate effectively and service its debt owed to the Fund.

Debt Securities and Interest Rate Risks. Because the Fund invests primarily in Mortgages and other debt instruments, the value of your investment in the Fund may fluctuate with changes in interest rates. Typically, a rise in interest rates causes a decline in the value of fixed rate or other debt instruments. Recently, interest rates have been historically low. Current conditions may result in a rise in interest rates. As a result, for the present, interest rate risk may be heightened. In general, the market price of debt securities with longer maturities will increase or decrease more in response to changes in interest rates than shorter-term securities. Other risk factors include credit risk (the debtor may default) and prepayment risk (e.g., the debtor may pay its obligation early, reducing the amount of interest payments). These risks could affect the value of a particular investment, possibly causing the Fund's share price and total return to be reduced and fluctuate more than other types of investments.

Credit Risk; Junior Tranches. There is a risk that debt issuers will not make payments, resulting in losses to the Fund. In addition, the credit quality of securities may be lowered if an issuer or borrower’s financial condition changes. Lower credit quality may lead to greater volatility in the price of a security and in shares of the Fund. Lower credit quality also may affect liquidity and make it difficult to sell the security. It is possible that the Fund’s borrowers or issuers may not make scheduled interest and/or principal payments on their loans and/or debt securities, which may result in losses or reduced cash flow to the Fund, either or both of which may cause the NAV of, or the distributions by, the Fund to decrease. Default, or the market's perception that an issuer is likely to default, could reduce the value and liquidity of securities, thereby reducing the value of your investment in Fund shares. In addition, default may cause the Fund to incur expenses in seeking recovery of principal or interest on its portfolio holdings. Support tranches of residential MBS are subject to amplified credit risks and the Fund.

Prepayment Risk. Securities may be subject to prepayment risk because borrowers are typically able to prepay principal. Consequently, a security's maturity may be longer or shorter than anticipated. When interest rates fall, obligations will be paid off more quickly than originally anticipated and the Fund may have to invest the prepaid proceeds in securities with lower yields. The yield realized on a security purchased at a premium will be lower than expected if prepayment occurs sooner than expected, as is often the case when interest rates fall. When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, preventing the Fund from reinvesting at higher yields. The yield realized on a security purchased at a discount will be lower than expected if prepayment occurs later than expected, as is often the case when interest rates rise for investments in MBS, CLOs, or other CREs. Lower-than-expected prepayment rates will expose investments in junior tranches of residential MBS to credit risks for longer periods of time.

Anti-Deficiency Legislation. The Fund may acquire interests in mortgage notes that limit the Fund's recourse to foreclosure upon the security property, with no recourse against the borrower's other assets. In some jurisdictions, the Fund can pursue a deficiency judgment against the note-issuing borrower or a guarantor if the value of the property securing the note is insufficient to pay back the debt owed to the Fund. In other jurisdictions, however, if the Fund desires to seek a judgment in court against the borrower for the deficiency balance, the Fund may be required to seek judicial foreclosure and/or have other security from the borrower.

"Due-on-Encumbrance" Clauses. The notes and deeds of trust held by the Fund, like those of many investors, contain "due-on-sale" clauses permitting the Fund to accelerate the maturity of a note if the note borrower sells, conveys or transfers all or any portion of the property, but may or may not contain "due-on-encumbrance" clauses which would permit the same action if the borrower further encumbers the property (i.e., executes further deeds of trust). The enforceability of these types of clauses has been the subject of several major court decisions and legislation in recent years, and may limit the Fund’s ability to accelerate the maturity of a note and proceed to foreclosure on the mortgaged property.

Defaulted Securities Risk. Mortgages or loans in which the Fund invests directly or through MBS or other structured debt may default. Defaulted securities lack liquidity and may have no secondary market for extended periods. Defaulted securities may have low recovery values and defaulting borrowers may seek bankruptcy protection, which would delay resolution of the Fund's claims. Defaulted securities will not make scheduled interest or principal payments, which will reduce the Fund's returns and ability to make distributions. Defaulted securities may become worthless. Junior tranches of MBS, CDOs or other CREs are subject to amplified default risks.

Collateralized Loan Obligation (CLO) Risk. CLOs are securities backed by an underlying portfolio of debt obligations. CLOs issue classes or “tranches” that vary in risk and yield and may experience substantial losses due to actual defaults, decrease of market value due to collateral defaults and removal of subordinate tranches, market anticipation of defaults and investor aversion to CLO securities as a class. The risks of investing in CLOs depend largely on the tranche invested in and the type of the underlying debts and loans in the tranche of the CLO, in which the Fund invests. CLOs also carry risks including, but not limited to, interest rate risk and credit risk.

Issuer / Borrower Risk. The value of a specific security can be more volatile than the market as a whole and can perform differently from the value of the market as a whole. The value of an issuer's securities that are held in the Fund's portfolio may decline for a number of reasons which directly relate to the issuer, such as management performance, financial leverage and reduced demand for the respective properties and services. A project-specific loan can perform differently from the market as a whole for reasons related to the borrower, such as an individual's or entity's economic situation. Compared to investment companies that focus only on securities issued by large capitalization companies, the Fund's NAV may be more volatile because it invests in notes of individuals or small entities. These issuers are more likely to suffer sudden financial reversals such as (i) job loss, (ii) depletion of financial reserves or (iii) loss of access to refinancing opportunities. In addition, the credit quality of securities may be lowered if a borrower's financial condition deteriorates, which tends to increase the risk of default and decreases a note's value. Further, compared to securities issued by large companies, notes issued by individuals or small entities are more likely to experience more significant changes in market values, be harder to sell and at prices that the adviser believes appropriate, and offer greater potential for losses. Additionally, borrowers may seek bankruptcy protection which would delay resolution of security holder claims and may eliminate or materially reduce liquidity. Compared to investments in debt securities issued by large capitalization companies, the Fund’s investments in project-specific loans are more likely to experience greater changes in market value, and greater potential for losses.

Liquidity Risk – Quarterly Repurchases. The Fund is a closed-end investment company structured as an "interval fund" and is designed for long-term investors. Unlike many closed-end investment companies, the Fund's shares are not listed on any securities exchange and are not publicly traded. There currently is no secondary market for the shares and the Advisor does not expect that a secondary market will develop. Limited liquidity is provided to shareholders only through the Fund's quarterly repurchase offers for no less than 5% of the Fund's shares outstanding at per-class net asset value. There is no guarantee that shareholders will be able to sell all of the shares they desire in a quarterly repurchase offer.

Liquidity Risk – Underlying Investments. The Fund's investments, such as in private debt funds or whole loans, are subject to liquidity risk. This liquidity risk exists because particular investments of the Fund may be difficult to sell, possibly preventing the Fund from selling them at an advantageous time or price, or possibly requiring the Fund to dispose of other investments at unfavorable times or prices, in order to satisfy its 5% quarterly repurchase obligations. Funds with principal investment strategies that involve securities of companies with smaller market capitalizations, private investments derivatives or securities with substantial market and/or credit risk tend to have the greatest exposure to liquidity risk.

Leveraging Risk. The use of leverage, such as borrowing money to purchase securities or otherwise invest the Fund’s assets, or borrowing money to satisfy Repurchase Offers will cause the Fund to incur additional expenses and may significantly magnify the Fund's losses in the event of adverse performance of the Fund’s underlying investments.

Repurchase Policy Risk. Quarterly repurchases by the Fund of its shares typically will be funded from available cash or sales of portfolio securities. However, payment for repurchased shares may require the Fund to liquidate portfolio holdings earlier than the Advisor otherwise would liquidate such holdings, potentially resulting in losses, and may increase the Fund's portfolio turnover. The Advisor may 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 any such 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 proceeds by selling investments, the Fund may hold a larger proportion of its net assets in less liquid securities. Also, the sale of securities to fund repurchases could reduce the market price of those securities, which in turn would reduce the Fund's net asset value.

Repurchase 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.

No Operating History. The Fund is a closed-end investment company with no history of operations. It is designed for long-term investors and not as a trading vehicle. During the Fund's start-up period, the Fund may not achieve the desired portfolio composition. If the Fund commences operations under inopportune market or economic conditions, it may not be able to achieve its investment objective.

CYBERSECURITY

Cybersecurity breaches can include unauthorized access to systems, networks, or devices; infection from computer viruses or other malicious software code; and attacks that shut down, disable, slow, or otherwise disrupt operations, business processes, or website access or functionality. Cybersecurity breaches may cause disruptions and impact the Fund's business operations, potentially resulting in: financial losses; interference with the Fund's ability to calculate NAV; impediments to trading; the inability of the Fund, the Advisor, the Sub-Advisors, and other service providers to transact business; violations of applicable privacy and other laws; regulatory fines, penalties, reputational damage, reimbursement or other compensation costs, or additional compliance costs; as well as the inadvertent release of confidential information.

Similar adverse consequences could result from cybersecurity breaches affecting issuers of securities in which the Fund invests; counterparties with which the Fund engages in transactions; governmental and other regulatory authorities; exchange and other financial market operators, banks, brokers, dealers, insurance companies, and other financial institutions (including financial intermediaries and service providers for the Fund's shareholders); and other parties. In addition, substantial costs may be incurred by these entities in order to prevent any cybersecurity breaches in the future.

MANAGEMENT OF THE FUND

Trustees and Officers

The Board is responsible for the overall management of the Fund, including supervision of the duties performed by the Advisor. The Board is comprised of five trustees. The Trustees are responsible for the Fund's overall management, including adopting the investment and other policies of the Fund, electing and replacing officers and selecting and supervising the Fund's Investment Advisor and Sub-Advisors. The name and business address of the Trustees and officers of the Fund and their principal occupations and other affiliations during the past five years, as well as a description of committees of the Board, are set forth under "Management" in the SAI.

Investment Advisor

Bluerock Credit Fund Advisor, LLC, located at c/o Bluerock Real Estate Holdings, LLC, 712 Fifth Avenue, New York, NY 10019, serves as the Fund's investment adviser. The Advisor is registered with the SEC as an investment adviser under the Advisers Act. The Advisor is a Delaware limited liability company formed on November 30, 2017, for the purpose of advising the Fund.

Under the general supervision of the Fund's Board of Trustees, and pursuant to the terms of an investment management agreement (the “Management Agreement”), the Advisor will carry out the investment and reinvestment of the assets of the Fund, will furnish continuously an investment program with respect to the Fund or may delegate such responsibilities to one or more sub-advisors. In addition, the Advisor will supervise and provide oversight of the Fund's service providers. The Advisor will furnish to the Fund office facilities, equipment and personnel for servicing the management of the Fund. 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 1.85% of the daily net assets of the Fund. The Advisor may employ research services and service providers, including mortgage service providers to assist in the Advisor’s market analysis and investment selection.

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 expenses, but excluding taxes, interest, brokerage commissions and extraordinary expenses, to the extent that they exceed 3.35% per annum of the Fund's average daily net assets attributable to Class C shares. 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, subject to the limitations that: (1) the reimbursement will be made only for fees and expenses incurred not more than three years from the date in which they were incurred; and (2) the reimbursement may not be made if it would cause the current Expense Limitation or any expense limitation in effect at the time of reimbursement to be exceeded. The Expense Limitation Agreement will remain in effect, at least until January 31, 2020, unless and until the Board approves its modification or termination. This agreement may be terminated only by the Fund's Board of Trustees on 60 days written notice to the Advisor. After January 31, 2020, the Expense Limitation Agreement may be renewed at the Advisor’s and Board's discretion.

A discussion regarding the basis for the Board's approval of each of the Fund's Management Agreement and Sub-Advisory Agreements with RREEF and Mercer will be available in the Fund's first annual or semi-annual report to shareholders.

Advisor's Investment Committee

The Advisor has established an Investment Committee comprised of five persons (the "Committee") responsible for: (1) setting overall investment policies and strategies for the Fund; (2) establishing allocation targets for the Fund’s investment portfolio as part of the portfolio planning process; (3) reviewing and having the opportunity to object to the Fund's purchase of private debt investments; and (4) generally overseeing the activities of the Fund’s Sub-Advisors.

The members of the Committee, and their professional background and experience are as follows:

Investment Sub-Advisor - RREEF

The Advisor has engaged RREEF America L.L.C. ("RREEF"), an investment adviser registered with the SEC under the Advisers Act, as Sub-Advisor to provide investment management services to the Fund. RREEF was originally founded in 1975 and is one of the largest real estate investment managers globally with more than 400 professionals and staff located in 27 locations around the world and over $57 billion in assets under management as of September 30, 2017. RREEF, is a division of Deutsche Asset Management, one of the world’s leading investment management organizations, with over $800 billion in assets under management.

RREEF's real estate team employs a disciplined investment approach and offers a diverse range of strategies and solutions across the risk/return and geographic spectrums, including core and non-core real estate, opportunistic investments in equity and debt, real estate securities, infrastructure securities and structured real estate debt. The real estate business aims to deliver competitive long-term risk adjusted returns, preservation of capital and diversification to its investors, which include governments, corporations, insurance companies, endowments, retirement plans and private clients worldwide.

Fundamental to RREEF's real estate investment approach is the close collaboration between the firm's dedicated real estate research, transaction, portfolio management and asset management teams in each region. Within these functions, RREEF has experts in product types and styles of investing, providing a diverse and deeply experienced bench of talent across the investment platform. Portfolio Managers, together with Global Client Group teams are responsible for bringing these talents together, providing clear connectivity and accountability throughout the investment process and in client service.

RREEF believes that the key attributes that differentiate it as a leading fiduciary manager of real estate investment programs include:

●	Proven Long Term Results. For more than 40 years, RREEF has been a leader in real estate investing, producing public and private real estate performance that has provided consistent returns.

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Experience and Resources. RREEF offers one of the broadest and most experienced real estate decision-making teams in the industry, with long tenured senior professionals spanning key functional areas such as research, portfolio and asset management, transactions and business leadership. RREEF's real estate organization of more than 400 staff worldwide demonstrates the depth of talent and support resources available to develop and execute client investment strategies.

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Research Driven Decisions. RREEF's dedicated real estate research group serves as a unique economic and real estate market research source for the entire organization. Through its involvement with senior management and interaction with investment teams, the research function is well integrated into the firm's investment process.

Portfolio Managers

Subject to RREEF’s Investment Committee's oversight, Marc Feliciano, Joseph Rado and Patrick Kennelly are the Fund's portfolio managers ("Portfolio Managers") and oversee the Sub-Advisor’s day to day investment operations of the Fund. Each has served as a Portfolio Manager since the Fund’s inception.

Joseph Rado, Director, Americas Debt Investments Group. Mr. Rado is responsible for managing all aspects of the debt investments process including credit, underwriting, due diligence, legal structuring and documentation, closing and asset management. Prior to joining Deutsche Asset Management in 2006, Mr. Rado was Senior Underwriter at CWCapital LLC, where he was responsible for the underwriting and closing of complex multiple-party capital stack mezzanine loans, B-Notes, junior participation and senior mortgage loans. From 1997 to 2002, Mr. Rado was Manager of Real Estate Investments at Nissho Iwai American Corporation, an international Fortune 500 company. At Nissho Iwai, he was responsible for the origination and structuring of U.S. real estate investments for the company's U.S. high yield real estate portfolio. Prior to joining Nissho Iwai, Mr. Rado was Vice President, Portfolio Management and Underwriting in the Commercial Real Estate Group at Wells Fargo (formerly First Union National Bank). Mr. Rado has 30+ years of experience in commercial real estate finance. He received a B.A. in Urban Planning from Rutgers University.

Patrick Kennelly, Director, Americas Debt Investments Group. Prior to joining Deutsche Asset Management, Patrick was the Portfolio Manager for Real Estate Credit at EquiTrust Life Insurance Company where he was responsible for origination, asset management and operational oversight of a $1.6 billion real estate credit portfolio on behalf of the firm's $18 billion General Account. Investment experience consists of senior debt (floating and fixed), subordinate debt, securities (CMBS, SASB's), private placements and other structured products. Patrick was one of 4 original members of the CIO team after the company was spun out of prior ownership, Guggenheim Capital. Prior to EquiTrust, Patrick worked for U.S. Bank, N.A. and FBOP Corporation where he structured and underwrote debt investments for US and Canadian REITs, Insurance Companies, PE Funds and middle market real estate operating companies. Mr. Kennelly has over 11 years of experience investing in real estate debt. He received an undergraduate degree in finance from the Indiana University Kelley School of Business.

The SAI provides additional information about the Portfolio Manager’s compensation, other accounts managed and ownership of Fund shares.

Investment Sub-Advisor - Mercer

Administrator, Accounting Agent and Transfer Agent

Custodian

UMB Bank, N.A, with principal offices at 1010 Grand Boulevard, Kansas City, Missouri 64106, serves as custodian for the securities and cash of the Fund's portfolio. Under a Custody Agreement, the Custodian holds the Fund's assets in safekeeping and keeps all necessary records and documents relating to its duties.

Estimated Fund Expenses

The Fund pays all other expenses incurred in the operation of the Fund including, among other things, (i) expenses for legal and independent accountants' services, (ii) costs of printing proxies, share certificates, if any, and reports to shareholders, (iii) charges of the custodian and Transfer Agent in connection with the Fund's dividend reinvestment policy, (iv) fees and expenses of independent Trustees, (v) printing costs, (vi) membership fees in trade association, (vii) fidelity bond coverage for the Fund's officers and Trustees, (viii) errors and omissions insurance for the Fund's officers and Trustees, (ix) brokerage costs, (x) taxes, (xi) costs associated with the Fund's quarterly repurchase offers, (xii) servicing fees (xiii) investment-related expenses, incurred in connection with identifying, sourcing, evaluating, valuing, researching, diligence, monitoring, acquiring, selling or restricting investments, whether or not completed, including fees and other compensation payable to third parties in connection therewith and travel expenses incurred by a sub-adviser or its affiliates incurred in connection with the Fund’s affairs, and (xiv) other extraordinary or non-recurring expenses and other expenses properly payable by the Fund. The expenses incident to the offering and issuance of shares to be issued by the Fund will be recorded as a reduction of capital of the Fund attributable to the shares.

The Fund’s Board has authorized the Advisor and RREEF 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 and Principal Shareholders

DETERMINATION OF NET ASSET VALUE

The net asset value of shares of the Fund is determined daily, as of the close of regular trading on the NYSE (normally, 4:00 p.m., Eastern Time). Each Class C share will be offered at net asset value. During the continuous offering, the price of the shares will increase or decrease on a daily basis according to the net asset value of the shares. In computing net asset value, portfolio securities of the Fund are valued at their current market values determined on the basis of market quotations. If market quotations are not readily available, securities are valued at fair value as determined by the Board. The Board has delegated execution of certain aspects of these procedures to a fair value team or committee composed of one or more representatives from the Advisor and RREEF. The team may also enlist third party consultants such as an audit firm or financial officer of a security issuer on an as-needed basis to assist in determining a security-specific fair value. The Board reviews and ratifies the execution of this process and the resultant fair value prices at least quarterly to assure the process produces reliable results. Fair valuation involves subjective judgments, and it is possible that the fair value determined for a security may differ materially from the value that could be realized upon the sale of the security. There is no single standard for determining fair value of a security. Rather, in determining the fair value of a security for which there are no readily available market quotations, the Advisor may consider several factors, including fundamental analytical data relating to the investment in the security, the nature and duration of any restriction on the disposition of the security, the cost of the security at the date of purchase, the liquidity of the market for the security and the recommendation of the Fund's Portfolio Manager. The Advisor and RREEF may also consider periodic financial statements (audited and unaudited) or other information provided by the issuer. The Advisor and RREEF will attempt to obtain current information to value all fair valued securities.

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Loan Terms and Covenants

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Loan Duration

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Contract (Coupon) Rate

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Rate Structure

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Loan-to-Value Ratio

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Debt Service Coverage Ratio

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Payment-in-kind information (if any)

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Interest Amortization or Accrual Schedule

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Prevailing interest rates

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Potential Impairment to Underlying Asset

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Other factors deemed applicable

All of these factors may be subject to adjustments based upon the particular circumstances of a security or the Fund's actual investment position.

Non-dollar-denominated securities, if any, are valued as of the close of 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 net asset value materially have 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 net asset value may change at times when it is not possible to purchase or sell shares of the Fund. The Fund may use a third party pricing service to assist it in determining the market value of securities in the Fund's portfolio. The Fund's net asset value per share is calculated, on a class-specific basis, 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.

CONFLICTS OF INTEREST

As a general matter, certain conflicts of interest may arise in connection with a portfolio manager's management of a fund's investments, on the one hand, and the investments of other accounts for which the portfolio manager is responsible, on the other. For example, it is possible that the various accounts managed could have different investment strategies that, at times, might conflict with one another to the possible detriment of the Fund. Alternatively, to the extent that the same investment opportunities might be desirable for more than one account, possible conflicts could arise in determining how to allocate them. Other potential conflicts might include conflicts created by specific portfolio manager compensation arrangements, and conflicts relating to selection of brokers or dealers to execute Fund portfolio trades and/or specific uses of commissions from Fund portfolio trades (for example, research, or "soft dollars", if any). RREEF has adopted policies and procedures and has structured its Portfolio Manager’s compensation in a manner reasonably designed to safeguard the Fund from being negatively affected as a result of any such potential conflicts. Certain conflicts of interest may arise from the Sub-Advisor’s arrangements with affiliated investment advisers. The Fund’s ability to enter into transactions with affiliates of the Advisor and/or any Sub-Advisor are limited by the 1940 Act. The Fund and the Portfolio Managers may face conflicts in the allocation of investment opportunities among the Fund and the investment funds, accounts, and investment vehicles managed by affiliates of the Advisor and/or the Sub-Advisors.

Certain conflicts of interest may arise from a Sub-Advisor's arrangements with affiliated investment advisers. The Fund's ability to enter into transactions with affiliates of the Advisor and/or any Sub-Advisor are limited by the 1940 Act. The Fund is prohibited under the 1940 Act from participating in certain transactions with affiliates without the prior approval of the Fund's independent Trustees and, in some cases, the SEC. Any person that owns, directly or indirectly, 5% or more of the Fund's outstanding voting securities will be an affiliate for purposes of the 1940 Act and the Fund is generally prohibited from buying or selling any security from or to such affiliate without the prior approval of the Fund's independent Trustees. The 1940 Act also prohibits certain "joint" transactions with certain of affiliates without prior approval of the Fund's independent Trustees and, in some cases, of the SEC. The Fund is prohibited from buying or selling any security from or to any person who owns more than 25% of the Fund's voting securities or certain of that person's affiliates, or entering into prohibited joint transactions with such persons, absent the prior approval of the SEC.

QUARTERLY REPURCHASES OF SHARES

Once each quarter, the Fund will offer to repurchase, at per-class net asset value 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 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 per-class 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").

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 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 for each share class 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% and no more than 25% of the total number of shares outstanding on the Repurchase Request Deadline.

Notice to Shareholders

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 ("Shareholder Notification"). The Shareholder Notification will contain information shareholders should consider in deciding whether to tender their shares for repurchase. The notice 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 notice also will set forth the NAV that has been computed no more than seven days before the date of notification, and how shareholders may ascertain the NAV after the notification date.

Repurchase Price

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.

Suspension or Postponement of Repurchase Offer

Liquidity Requirements

The Fund must maintain liquid assets equal to the Repurchase Offer Amount from the time that the notice 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 cash or 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, and/or that the Fund’s line of credit is available to satisfy the Repurchase Offer Amount. 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 paragraphs. 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 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 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 net asset value.

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 right to redeem Fund shares outside the regular quarterly repurchases, regardless of shareholder circumstances, and the Fund may not honor any such requests. 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

Monthly Distribution Policy

The dividend rate may be modified by the Board from time to time. If, for any monthly 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 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.

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

The dividend 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 Rule 19a-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 the 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.

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

DIVIDEND REINVESTMENT POLICY

The Fund will operate under a dividend reinvestment policy administered by ALPS Fund Services, Inc. Pursuant to the policy, the Fund's income dividends or capital gains or other distributions (each, a "Distribution" and collectively, "Distributions"), net of any applicable U.S. withholding tax, are reinvested in the same class of shares of the Fund.

Shareholders automatically participate in the dividend reinvestment policy, unless and until an election is made to withdraw from the policy on behalf of such participating shareholder. Shareholders who do not wish to have Distributions automatically reinvested should so notify the Administrator in writing at Bluerock Institutional Mortgage Income Fund, c/o ALPS, Administrator and Accounting Agent, 1290 Broadway, Suite 1100, Denver CO 80203. Such written notice must be received by the Administrator 30 days prior to the record date of the Distribution or the shareholder will receive such Distribution in shares through the dividend reinvestment policy. Under the dividend reinvestment policy, the Fund's Distributions to shareholders are reinvested in full and fractional shares as described below.

When the Fund declares a Distribution, the Administrator, on the shareholder's behalf, will receive additional authorized shares from the Fund either newly issued or repurchased from shareholders by the Fund and held as treasury stock. The number of shares to be received when Distributions are reinvested will be determined by dividing the amount of the Distribution by the Fund's net asset value per share.

The Administrator will maintain all shareholder accounts and furnish written confirmations of all transactions in the accounts, including information needed by shareholders for personal and tax records. The Administrator will hold shares in the account of the shareholders in non-certificated form in the name of the participant, and each shareholder's proxy, if any, will include those shares purchased pursuant to the dividend reinvestment policy. Each participant, nevertheless, has the right to request certificates for whole and fractional shares owned. The Fund will issue certificates in its sole discretion. The Administrator will distribute all proxy solicitation materials, if any, to participating shareholders.

In the case of shareholders, such as banks, brokers or nominees, that hold shares for others who are beneficial owners participating under the dividend reinvestment policy, the Administrator will administer the dividend reinvestment policy on the basis of the number of shares certified from time to time by the record shareholder as representing the total amount of shares registered in the shareholder's name and held for the account of beneficial owners participating under the dividend reinvestment policy.

Neither the Administrator nor the Fund shall have any responsibility or liability beyond the exercise of ordinary care for any action taken or omitted pursuant to the dividend reinvestment policy, nor shall they have any duties, responsibilities or liabilities except such as expressly set forth herein. Neither shall they be liable hereunder for any act done in good faith or for any good faith omissions to act, including, without limitation, failure to terminate a participant's account prior to receipt of written notice of his or her death or with respect to prices at which shares are purchased or sold for the participants account and the terms on which such purchases and sales are made, subject to applicable provisions of the federal securities laws.

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 advisors 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 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.

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 Amended and Restated 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. The Fund offers four classes of shares: Class A, Class C, Class I, and Class L shares. Class A, Class I, and Class L shares each by a different prospectus. An investment in any share class of the Fund represents an investment in the same assets of the Fund. However, the minimum investment amounts, sales loads, and ongoing fees and expenses for each share class may be different. The fees and expenses for the Fund are set forth in “Summary of Fund Expenses”. Certain share class details are set forth in “Plan of Distribution”.

The following table shows the amounts of Fund Shares that have been authorized and are outstanding as of the date of this Prospectus:

(1)	(2)	(3)	(4)
Title of Class	Amount Authorized	Amount Held by Fund or for its Account	Amount Outstanding Excluding Amount Shown Under (3)
Shares of Beneficial Interest	Unlimited	None	[ ____]

Holders of shares will be entitled to the payment of dividends when, as and if declared by the Board. The Fund currently intends to accrue dividend distributions daily and make payment to its shareholders no less frequently than monthly. 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 same class 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, in certain limited circumstances, may 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 generally will not 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 Fund's Transfer Agent 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.

Other Classes of Shares. The Fund offers Class A, Class I, and Class L shares each by a different prospectus. Class A, Class I, and Class L shares each have different investment minimums, and are subject to sales charges (Class A and Class L shares) and distribution and/or shareholder servicing fee (Class L shares).

ANTI-TAKEOVER PROVISIONS IN THE DECLARATION OF TRUST

The Amended and Restated 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 Trustees. 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

ALPS Distributors, Inc., located at 1290 Broadway, Suite 1100, Denver, CO 80203, 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 net asset value. The Distributor also may enter into selected dealer agreements with other broker dealers for the sale and distribution of the Fund's shares, including with affiliates of the Advisor. In reliance on Rule 415, the Fund intends to offer to sell up to $[____] of its shares, on a continual basis, through the Distributor. No arrangement has been made to place funds received in an escrow, trust or similar account. The Distributor is not required to sell any specific number or dollar amount of the Fund's shares, but will use its reasonable 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 marker in Fund shares. Class C shares are subject to a Distribution Fee of 0.75%.

The Advisor or its affiliates, in the Advisor’s discretion and from their own resources, may pay additional compensation to brokers or dealers in connection with the sale and distribution of Fund shares (the "Additional Compensation"). In return for the 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 and 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, or determined in some other manner. 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 may pay a servicing fee to the selected securities dealers and other financial industry professionals for providing ongoing broker-dealer services in respect of shareholders. 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 or the Advisor may reasonably request.

Prior to the initial public offering of shares, the Advisor 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 DST Systems, Inc., the Fund’s Transfer Agent. 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 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.

By Mail

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

Bluerock Institutional Mortgage Income Fund
c/o DST Systems, Inc.

PO Box 219169

Kansas City, MO 64121

All checks must be in US 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 neither accept third party checks, Treasury checks, credit card checks, traveler's checks or starter checks for the purchase of shares, nor post-dated checks, post-dated on-line bill pay checks, or any conditional purchase order or payment.

The Transfer Agent will charge a $25 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.

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 1-844-819-8287 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:

By Wire — Subsequent Investments

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 $10,000 on specified days of each month into your established Fund account. Please contact the Fund at 1-844-819-8287 for more information about the Fund's Automatic Investment Plan.

By Telephone

In compliance with the USA Patriot Act of 2001, the Transfer Agent 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 the Transfer Agent at 1-844-819-8287 for additional assistance when completing an application.

Share Class Considerations

When selecting a share class, you should consider the following:

●

which share classes are available to you;

●

the amount you intend to invest;

●

how long you expect to own the shares; and

●

total costs and expenses associated with a particular share class.

Class C Shares

Class C shares are sold at the prevailing NAV per Class C share and are not subject to any upfront sales charge; however, the following are additional features that should be taken into account when purchasing Class C shares:

●

a monthly shareholder servicing fee at an annual rate of up to 0.25% of the average daily net assets of the Fund attributable to Class C shares;

●

a Distribution Fee which will accrue at an annual rate equal to 0.75% of the average daily net assets of the Fund attributable to Class C shares; and

●

an early withdrawal charge equal to 1.00% of the original purchase price of Class C shares repurchased by the Fund for repurchases of Class C shares held less than 365 days following such shareholder’s initial purchase.

Because the Class C shares of the Fund are sold at the prevailing NAV per Class C share without an upfront sales load, the entire amount of your purchase is invested immediately.

Shareholder Service Expenses

The Fund has adopted a "Shareholder Services Plan" with respect to its Class C shares under which the Fund may compensate financial industry organizations for providing ongoing administration of client accounts 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 or the Advisor may reasonably request. Under the Shareholder Services Plan, the Fund, with respect to its Class C shares, may incur expenses on an annual basis equal up to 0.25% of its average net assets attributable to Class C shares. Because these fees are paid from the Fund’s assets on an ongoing basis they will increase your costs over time and may cost you more than paying other types of sales charges..

Distribution Plan

The Fund, with respect to its Class C shares, is authorized under a “Distribution Plan” to pay to the Distributor a Distribution Fee for certain activities relating to the distribution of shares to investors and maintenance of shareholder accounts. These activities include marketing and other activities to support the distribution of the Class C shares. The Plan operates in a manner consistent with Rule 12b-1 under the 1940 Act, which regulates the manner in which an open-end investment company may directly or indirectly bear the expenses of distributing its shares. Although the Fund is not an open-end investment company, it has undertaken to comply with the terms of Rule 12b-1 as a condition of an exemptive order under the 1940 Act which permits it to have asset based distribution fees. Under the Distribution Plan, the Fund pays the Distributor a Distribution Fee at an annual rate of 0.75% of average daily net assets attributable to Class C shares.

LEGAL MATTERS

Certain legal matters in connection with the shares will be passed upon for the Fund by Thompson Hine, LLP 41 South High Street, Suite 1700, Columbus, Ohio 43215-6101.

REPORTS TO SHAREHOLDERS

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

Householding

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

RSM US LLP is the independent registered public accounting firm for the Fund and audits the Fund's financial statements. RSM US LLP is located at 555 Seventeenth Street, Suite 1000, Denver, CO 80202.

ADDITIONAL INFORMATION

TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION

General Information and History
Investment Objective and Policies
Repurchases and Transfers of Shares
Management of the Fund
Codes of Ethics
Proxy Voting Policies and Procedures
Control Persons and Principal Holders
Investment Advisory and Other Services
Portfolio Manager
Allocation of Brokerage
Tax Status
Other Information
Independent Registered Public Accounting Firm
Financial Statements

NOTICE OF PRIVACY POLICY & PRACTICES

Rev. February 2018

PRIVACY NOTICE


FACTS	WHAT DOES THE BLUEROCK INSTITUTIONAL MORTGAGE INCOME FUND DO WITH YOUR PERSONAL INFORMATION?

Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.

What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include:
	■	Social Security number	■	Purchase History
	■	Assets	■	Account Balances
	■	Retirement Assets	■	Account Transactions
	■	Transaction History	■	Wire Transfer Instructions
	■	Checking Account Information
	When you are no longer our customer, we may continue to share your personal information as described in this notice.

How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons the Bluerock Institutional Mortgage Income Fund chooses to share; and whether you can limit this sharing.


Reasons we can share your personal information	Does Bluerock Institutional Mortgage Income Fund share?	Can you limit this sharing?
For our everyday business purposes – such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes – to offer our products and services to you	No	We don't share
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes – information about your transactions and experiences	No	We don't share
For our affiliates' everyday business purposes – information about your creditworthiness	No	We don't share
For nonaffiliates to market to you	No	We don't share

Questions?

Call 1-844-819-8287

Who we are
Who is providing this notice?		Bluerock Institutional Mortgage Income Fund

What we do
How does Bluerock Institutional Mortgage Income Fund protect my personal information?			To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. Our service providers are held accountable for adhering to strict policies and procedures to prevent any misuse of your nonpublic personal information.
How does Bluerock Institutional Mortgage Income Fund collect my personal information?			We collect your personal information, for example, when you ■ Open an account ■ Provide account information ■ Give us your contact information ■ Make deposits or withdrawals from your account ■ Make a wire transfer ■ Tell us where to send the money ■ Tells us who receives the money ■ Show your government-issued ID ■ Show your driver's license We also collect your personal information from other companies.
Why can't I limit all sharing?			Federal law gives you the right to limit only ■ Sharing for affiliates' everyday business purposes – information about your creditworthiness ■ Affiliates from using your information to market to you ■ Sharing for nonaffiliates to market to you State laws and individual companies may give you additional rights to limit sharing.
Definitions
Affiliates			Companies related by common ownership or control. They can be financial and nonfinancial companies. ■ Bluerock Institutional Mortgage Income Fund does not share with our affiliates.
Nonaffiliates			Companies not related by common ownership or control. They can be financial and nonfinancial companies ■ Bluerock Institutional Mortgage Income Fund does not share with nonaffiliates so they can market to you.
Joint marketing			A formal agreement between nonaffiliated financial companies that together market financial products or services to you. ■ Bluerock Institutional Mortgage Income Fund doesn’t jointly market.

BLUEROCK INSTITUTIONAL MORTGAGE INCOME FUND

Class C Shares ([___]) of Beneficial Interest

PROSPECTUS

[______], 2018

Investment Advisor

Bluerock Credit Fund Advisor, LLC

Sub-Advisors

RREEF America L.L.C.

Mercer Investment Management, Inc.

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.

SUBJECT TO COMPLETION PRELIMINARY PROSPECTUS DATED [______ __], 2018

PROSPECTUS

[____], 2018

Bluerock Institutional Mortgage Income Fund

Class I Shares ([___]) of Beneficial Interest

The Bluerock Institutional Mortgage Income Fund (the "Fund") is a continuously offered, non-diversified, closed-end management investment company that is operated as an interval fund.

●

Shares of the Fund are not redeemable, but shall be subject to the repurchase offer provisions set forth below.

●

This prospectus concisely provides you the information that a prospective investor should know about the Fund before investing in the shares of the Fund that are being offered through this prospectus. You are advised to read this prospectus carefully and to retain it for future reference. Additional information about the Fund, including the Fund’s Statement of Additional Information (“SAI”), dated [ _________, 2018], has been filed with the SEC. Information regarding the Fund is available on the SEC’s website at http://www.sec.gov, including the SAI. 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. The table of contents of the SAI appears on page [39] of this prospectus. The SAI is incorporated by reference into this prospectus (legally made a part of this prospectus). The SAI, Fund annual and semi-annual reports and other information and shareholder inquiries regarding the Fund are available free of charge and may be requested by writing the Fund at c/o DST Systems, PO Box 218445 Kansas City, MO 64121-9445 (the “Transfer Agent”), by calling the Transfer Agent toll-free at 1-844-819-8287, or by visiting the Fund’s website at http://www.bluerockfunds.com.

The Sub-Advisors. The Advisor has engaged RREEF America L.L.C. ("RREEF") and Mercer Investment Management, Inc. (“Mercer”) (each a "Sub-Advisor" and collectively, the "Sub-Advisors") both SEC registered investment advisers under the Advisers Act, to provide services for investment management of the Fund’s portfolio. RREEF was founded in 1975 and is one of the largest real estate investment managers serving institutional investors globally with more than 400 professionals and staff located in 27 locations around the world with over $57 billion in assets under management as of September 30, 2017. Mercer is a leading global institutional investment advisor serving sovereign wealth funds, pension plans, banks, family offices, insurance companies, endowments and foundations for more than 40 years and, together with its global investment management affiliates, has over $213 billion in assets under management as of September 30, 2017 and over $10.2 trillion in assets under advisement as of June 30, 2017.

Securities Offered. The Fund engages in a continuous offering of classes of shares of beneficial interest of the Fund, including Class I shares offered by this prospectus. The Fund has registered 20,000,000 shares, and is authorized as a Delaware statutory trust to issue an unlimited number of shares. The Fund is offering to sell, through its principal underwriter, ALPS Distributors, Inc. (the "Distributor") on a continual basis under the terms of this prospectus, 20,000,000 shares of beneficial interest at net asset value (“NAV”) per share of the relevant share class, plus any applicable sales load. The initial NAV is $25.00 per Class I share. The Class I shares are not subject to sales charges. The Fund also offers Class A, Class C and Class L shares, each by a separate prospectus. The minimum initial investment by a shareholder for Class I shares is $1,000,000 and subsequent investments may be made in any amount. The Distributor is not required to sell any specific number or dollar amount of the Fund's shares, but will use best efforts to sell the shares. Monies received will be invested promptly and no arrangements have been made to place such monies in an escrow, trust or similar account. See "Plan of Distribution."

TABLE OF CONTENTS

PROSPECTUS SUMMARY
SUMMARY OF FUND EXPENSES
FINANCIAL HIGHLIGHTS
USE OF PROCEEDS
THE FUND
INVESTMENT OBJECTIVE, POLICIES AND STRATEGIES
RISK FACTORS
MANAGEMENT OF THE FUND
DETERMINATION OF NET ASSET VALUE
CONFLICTS OF INTEREST
QUARTERLY REPURCHASE OF SHARES
DISTRIBUTION POLICY
DIVIDEND REINVESTMENT POLICY
U.S. FEDERAL INCOME TAX MATTERS
DESCRIPTION OF CAPITAL STRUCTURE AND SHARES
ANTI-TAKEOVER PROVISIONS IN DECLARATION OF TRUST
PLAN OF DISTRIBUTION
LEGAL MATTERS
REPORTS TO SHAREHOLDERS
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
ADDITIONAL INFORMATION
TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION
NOTICE OF PRIVACY POLICY & PRACTICES

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 SAI particularly the information set forth below under the heading "Risk Factors."

The Fund

Investment Objective, Strategy and Policies

The Fund’s investment objective is to generate attractive, long-term risk-adjusted returns, with an emphasis on current income with lower volatility and lower correlation to the broader markets.

The Fund pursues its investment objective by investing primarily in a portfolio of institutional private and public real estate-related debt instruments and securities.

●

The Fund may invest in real estate debt instruments and securities of any duration, maturity or structure, and the amount of the invested debt as a percentage of a particular property's stabilized value (commonly known as the “loan to value ratio”) will generally range from 50% to 80%.

By investing in the Fund, the Advisor expects that the shareholders may realize the following potential benefits:

●

Investment Advisor

Sub-Advisors

The Sub-Advisors are engaged by the Advisor and will be paid solely by the Advisor from its management fee. Shareholders do not pay any Sub-Advisor directly.

Advisor Fees and Expenses

The Advisor is entitled to receive a monthly fee at the annual rate of 1.85% of the Fund's daily net assets. The Advisor and the Fund have entered into an expense limitation and reimbursement agreement (the "Expense Limitation Agreement") under which the Advisor has contractually agreed to waive its fees and to pay or absorb the ordinary operating expenses of the Fund (including offering and organizational expenses, but excluding taxes, interest, brokerage commissions, acquired fund fees and expenses and extraordinary expenses), to the extent that such expenses exceed 2.35% per annum of the Fund's average daily net assets (the "Expense Limitation") attributable to Class I shares. 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, subject to the limitations that: (1) the reimbursement for fees and expenses will be made only if payable not more than three years from the date which they were incurred; and (2) the reimbursement may not be made if it would cause the current, or then in effect Expense Limitation to be exceeded. The Expense Limitation Agreement will remain in effect at least until January 31, 2020, unless and until the Board approves its modification or termination. After January 31, 2020, the Expense Limitation Agreement may be renewed at the Advisor’s and Board's discretion. See "Management of the Fund."

Administrator, Accounting Agent and Transfer Agent

Distribution Fees

Class I shares are not subject to a Distribution Fee. See “Plan of Distribution.”

Closed-End Fund Structure

Closed-end funds differ from open-end mutual funds in that closed-end funds do not typically redeem their shares at the option of the shareholder. Closed-end fund shares typically trade in the secondary market via a stock exchange. However, unlike other closed-end funds, the Fund is an “interval” fund whose shares will not be listed on a stock exchange and therefore will not have a secondary market. Instead, the Fund will provide limited liquidity to shareholders by offering to repurchase a limited amount of the Fund's shares (at least 5%) quarterly, which is discussed in more detail below. The Fund is subject to continuous asset in-flows, but not continuous out-flows.

Share Classes

The Fund offers four classes of shares: Class A, Class C, Class I, and Class L shares. An investment in any share class of the Fund represents an investment in the same assets of the Fund. However, the sales loads, purchase restrictions, and ongoing fees and expenses for each share class are different. The loads, fees and expenses for the Fund are set forth in “Summary of Fund Expenses.” If an investor has hired an intermediary and is eligible to invest in more than one class of shares, the intermediary may help determine which share class is appropriate for that investor. When selecting a share class, you should consider which share classes are available to you, how much you intend to invest, how long you expect to own shares, and the total costs and expenses associated with a particular share class. The Fund offers Class A, Class C, and Class L shares each by a separate prospectus.

Repurchases of Shares

The Fund is an interval fund and, as such, has adopted a fundamental policy to make quarterly repurchase offers, at net asset value, of no less than 5% of the Fund’s shares outstanding. 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% 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."

Investor Suitability

Summary of Risks

Credit Risk; Junior Tranches. It is possible that the Fund’s borrowers or issuers may not make scheduled interest and/or principal payments on their loans and/or debt securities, which may result in losses or reduced cash flow to the Fund, either or both of which may cause the Net Asset Value (NAV) of, or the distributions by, the Fund to decrease. In addition, the credit quality of securities held by the Fund may fall if an issuer's financial condition deteriorates. This also may negatively impact the value of and the Fund’s returns on its investment in such securities. Also, the Fund expects to allocate a portion of its assets to investments in junior tranches of debt, such as subordinated notes (sometimes generically referred to as “B Notes”) and mezzanine loans. Generally speaking, such junior level investments are riskier and therefore subject to a higher level of risk of non-payment or default, even if the more senior levels of debt related to such investment are performing according to their terms. Thus, the Fund’s investments in junior tranches of debt will be subject to amplified credit risks.

Prepayment Risk. Debt securities may be subject to prepayment risk because borrowers are typically able to repay their debt obligations prior to maturity principal. Consequently, a debt security's maturity may be longer or shorter than anticipated. When interest rates fall, debt obligations tend to be refinanced or otherwise paid off more quickly than originally anticipated. If that occurs with respect to the Fund’s investments, the Fund may have to invest the prepaid proceeds in securities with lower yields. When interest rates rise, obligations will tend to be paid off by the obligor more slowly than anticipated, preventing the Fund from reinvesting at higher comparable or yields. For certain investments, lower-than-expected prepayment rates may expose investments in the junior tranches of MBS, CLOs or other CREs to credit risks for longer periods of time.

Conflicts of Interest Related to Direct Origination. Under the Investment Company Act of 1940, as amended (the "1940 Act"), the Fund is not permitted to engage in related party transactions with its affiliates. As such, to address these risks, the Fund has implemented certain written policies and procedures to ensure the Fund will not enter into any agreement unless and until it is satisfied that doing so will not raise concerns under the 1940 Act, and address potential conflicts of interest

Liquidity Risk – Quarterly Repurchases. The Fund’s shares are not listed on any securities exchange and are not publicly traded. There currently is no secondary market for the Fund's shares and the Advisor does not expect that a secondary market will develop. Limited liquidity is provided to shareholders only through the Fund's quarterly repurchase offers, for no less than 5% of the Fund's shares outstanding at net asset value. There is no guarantee that all shareholders seeking liquidity will be able to sell all of the shares that they desire to sell in a quarterly repurchase offer.

Leveraging Risk. The Fund is authorized to use leverage for investment purposes and to satisfy redemption requests. The use of leverage will cause the Fund to incur additional expenses and may significantly magnify the Fund's losses in the event of adverse performance of the Fund’s underlying investments.

U.S. Federal Income Tax Matters

Distribution Policy

Custodian

UMB Bank, N.A ("Custodian"), with principal offices at 1010 Grand Boulevard, Kansas City, Missouri 64106, serves as the Fund's custodian. See "Management of the Fund."

SUMMARY OF FUND EXPENSES

Shareholder Transaction Expenses	Class I
Maximum Sales Load (as a percent of offering price)	None
Early Withdrawal Charges on Shares Repurchased Less Than 365 Days After Purchase (as a percent of original purchase price)	None
Annual Expenses (as a percentage of average net assets attributable to shares)
Management Fees	[1.85]%
Other Expenses ¹	[ ]%
Shareholder Servicing Expenses	0.00%
Distribution Fee	0.00%
Remaining Other Expenses	[ ]%
Acquired Fund Fees and Expenses ^{1, 2}	[ ]%
Total Annual Expenses ¹	[ ]%
Fee Waiver and Reimbursement ^1,3	[ ]%
Total Annual Expenses (after fee waiver and reimbursement) ¹	[ ]%

Estimated for the current fiscal year.

Acquired Fund Fees and Expenses are the indirect costs of investing in other investment companies. These indirect costs may include performance fees paid to the acquired fund’s advisor or its affiliates. It does not include brokerage or transaction costs incurred by the acquired funds. The operating expenses in this fee table will not correlate to the expense ratio in the Fund's financial highlights because the financial statements include only the direct operating expenses incurred by the Fund.

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 annual operating expenses of the Fund (including offering and organizational expenses, but excluding taxes, interest, brokerage commissions, acquired fund fees and expenses and extraordinary expenses) to the extent that they exceed 2.35% per annum of the Fund's average daily net assets attributable to Class I shares. 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, subject to the limitations that: (1) the reimbursement for fees and expenses will be made only if payable not more than three years from the date in which they were incurred; and (2) the reimbursement may not be made if it would cause the expense limitation in effect at the time the expenses were waived or absorbed to be exceeded. The Expense Limitation Agreement will remain in effect at least until January 31, 2020, unless and until the Board approves its modification or termination. This agreement may be terminated only by the Fund's Board of Trustees. See "Management of the Fund."

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 (the Example assumes the Fund's Expense Limitation Agreement will remain in effect through January, 2020):

Share Class	1 Year	3 Years
Class I Shares

FINANCIAL HIGHLIGHTS

Because the Fund is newly formed and has no performance history as of the date of this Prospectus, a financial highlights table for the Fund has not been included in this Prospectus.

USE OF PROCEEDS

The net proceeds of the Fund’s continuous offering of shares, after payment of the sales load (if applicable) and other associated expenses, will be invested in accordance with the Fund's investment objective and policies (as stated below) as soon as practicable after receipt. The Fund pays organizational costs and its offering expenses incurred with respect to its initial and continuous offering. Pending investment of the net proceeds in accordance with the Fund's investment objective and policies, the Fund will invest in money market or short-term fixed-income mutual funds. Investors should expect, therefore, that before the Fund has fully invested the proceeds of the offering in accordance with its investment objective and policies, the Fund's assets would earn interest income at a modest rate. While the Fund does not anticipate a delay in the investment of net proceeds from investors, the Fund will seek shareholder approval if the net proceeds are not invested within six months of the Fund’s initial offering in accordance with the rules under the 1940 Act.

THE FUND

The Fund is a continuously offered, non-diversified, closed-end management investment company that is operated as an interval fund. The Fund was organized as a Delaware statutory trust on September 11, 2015. The Fund's principal office is located at 712 Fifth Avenue, 9th Floor, New York, NY 10019, and its telephone number is (212) 843-1601.

INVESTMENT OBJECTIVE, POLICIES AND STRATEGIES

Investment Objective and Policies

The Fund's investment objective is to generate attractive, long-term risk-adjusted returns, with an emphasis on current income with lower volatility and lower correlation to the broader markets.

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The Fund may invest in real estate debt instruments and securities of any duration, maturity or structure, and the amount of the invested debt as a percentage of a particular property's stabilized value (commonly known as the “loan to value ratio”) will generally range from 50% to 80%.

The Advisor Expects that the Fund’s Shareholders may realize the following potential benefits:

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Access to Attractive Risk-Adjusted Returns from Institutional Private Real Estate Debt Investments – The Fund enables investors to invest in institutional real estate private debt investments that may not otherwise be available to the typical retail investor due to the institutional focus of the Sub-Advisors. The Fund invests in institutional real estate private debt investments that offer attractive risk-return performance with downside protection due to the value of the underlying real estate as collateral, and the availability of an equity cushion. In addition, many of the private real estate debt investments in which the Fund invests are typically intended for large, institutional investors due to the large minimum investment size, limiting the availability to individual, non-institutional investors.

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Access to Relationship-based Deal Flow and Directly Originated Debt – The Fund will have access to the Americas Real Estate Division of Deutsche Asset Management's substantial direct, long-standing relationships across the real estate industry including borrowers, brokers, financial institutions, lenders and other market participants, including the real estate equity transaction teams to source transactions. This comprehensive access to sourcing may offer strategic benefits including a more efficient deployment of capital and the identification of certain investment opportunities before they are presented to the broader market, enabling the Fund to deliver attractive yields to investors.

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Access to RREEF's Substantial Platform and Resources – The Fund will have access to the Americas Real Estate Division of Deutsche Asset Management's established underwriting and structuring capabilities to execute its investment strategy, and to its substantial real estate platform which provides the Fund access to market data on a scale not available to many competitors. RREEF was founded in 1975 and is one of the largest real estate investment managers globally with more than 400 professionals and staff located in 27 locations around the world and over $57 billion in assets under management as of September 30, 2017.

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Access to Mercer’s Platform and Proprietary Intellectual Capital. The Fund will have access to Mercer’s proprietary intellectual capital, ongoing research, opinions and market data to assist the Advisor in setting strategy and portfolio planning to optimize risk-adjusted returns. Mercer Investment Management is a leading global institutional investment advisor serving sovereign wealth funds, pension plans, banks, family offices, insurance companies, endowments and foundations for more than 40 years, and, together with its global investment management affiliates, has over $213 billion in assets under management as of September 30, 2017 and over $10.2 trillion in assets under advisement as of June 30, 2017.

Fund's Target Investment Portfolio

The Fund may invest in a variety of investments in pursuing its investment objective, including those listed below.

Private Real Estate Debt Investments:

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Public Real Estate Debt Investments:

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Investment Process

Portfolio Planning. The Advisor and RREEF teams, including Research & Strategy, the debt investments team, performance and risk management and the broader platform, integrate these viewpoints along with ongoing research, opinions and market data from Mercer, into a specific investment strategy and strategic plan to fulfill the Fund's primary investment objective to generate attractive, long-term risk-adjusted returns, with an emphasis on current income with lower volatility and lower correlation to the broader markets. Several factors are considered in portfolio planning including, but not limited to, the Fund’s objectives and constraints, risk-return expectations, current Fund investment allocations and the overall market outlook, all of which are reviewed and approved by RREEF’s Investment Committee.

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Transaction Approval and Execution. RREEF will prepare a memorandum detailing its analysis of the proposed investment and present the transaction to both the RREEF and the Advisor’s Investment Committees for approval. Each investment is reviewed and evaluated for its risk/return profile and impact on the portfolio's geographic and sector diversification, credit characteristics and current and total return. If final approval of the investment is given by both Investment Committees, RREEF will be responsible to coordinate and complete all aspects of closing and funding within the scope of approval that was given.