SC 13D/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT

TO § 240.13d-1(a) AND AMENDMENTS THERETO FILED

PURSUANT TO § 240.13d-2(a)

(Amendment No. 4)

RAIT FINANCIAL TRUST

(Name of Issuer)

Common Shares of Beneficial Interest, $0.03 par value per share

(Title of Class of Securities)

749227609

(CUSIP Number)

Thomas Surgent, Chief Compliance Officer

Highland Capital Management, L.P.

300 Crescent Court, Suite 700

Dallas, TX 75201

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

February 8, 2017

(Date of Event Which Requires Filing of This Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box.  ☐

CUSIP NO. 749227609 13D Page 2 of 19 Pages

(1)	Names of reporting persons Highland Global Allocation Fund
(2)	Check the appropriate box if a member of a group (see instructions) (a)  ☐        (b)  ☐
(3)	SEC use only
(4)	Source of funds (see instructions) WC
(5)	Check if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e)
(6)	Citizenship or place of organization Massachusetts
Number of shares beneficially owned by each reporting person with:		(7)	Sole voting power 0
		(8)	Shared voting power 2,219,361
		(9)	Sole dispositive power 0
		(10)	Shared dispositive power 2,219,361
(11)	Aggregate amount beneficially owned by each reporting person 2,219,361
(12)	Check if the aggregate amount in Row (11) excludes certain shares (see instructions)
(13)	Percent of class represented by amount in Row (11) 2.4%
(14)	Type of reporting person (see instructions) IV, OO

CUSIP NO. 749227609 13D Page 3 of 19 Pages

(1)	Names of reporting persons Highland Small-Cap Equity Fund
(2)	Check the appropriate box if a member of a group (see instructions) (a)  ☐        (b)  ☐
(3)	SEC use only
(4)	Source of funds (see instructions) WC
(5)	Check if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e)
(6)	Citizenship or place of organization Massachusetts
Number of shares beneficially owned by each reporting person with:		(7)	Sole voting power 0
		(8)	Shared voting power 484,789
		(9)	Sole dispositive power 0
		(10)	Shared dispositive power 484,789
(11)	Aggregate amount beneficially owned by each reporting person     484,789
(12)	Check if the aggregate amount in Row (11) excludes certain shares (see instructions)
(13)	Percent of class represented by amount in Row (11) 0.5%
(14)	Type of reporting person (see instructions) IV, OO

CUSIP NO. 749227609 13D Page 4 of 19 Pages

(1)	Names of reporting persons Highland Capital Management Fund Advisors, L.P.
(2)	Check the appropriate box if a member of a group (see instructions) (a)  ☐        (b)  ☐
(3)	SEC use only
(4)	Source of funds (see instructions) AF, OO
(5)	Check if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e)
(6)	Citizenship or place of organization Delaware
Number of shares beneficially owned by each reporting person with:		(7)	Sole voting power 0
		(8)	Shared voting power 2,704,150
		(9)	Sole dispositive power 0
		(10)	Shared dispositive power 2,704,150
(11)	Aggregate amount beneficially owned by each reporting person 2,704,150
(12)	Check if the aggregate amount in Row (11) excludes certain shares (see instructions)
(13)	Percent of class represented by amount in Row (11) 2.9%
(14)	Type of reporting person (see instructions) IA, PN

CUSIP NO. 749227609 13D Page 5 of 19 Pages

(1)	Names of reporting persons Strand Advisors XVI, Inc.
(2)	Check the appropriate box if a member of a group (see instructions) (a)  ☐        (b)  ☐
(3)	SEC use only
(4)	Source of funds (see instructions) AF/OO
(5)	Check if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e)
(6)	Citizenship or place of organization Delaware
Number of shares beneficially owned by each reporting person with:		(7)	Sole voting power 0
		(8)	Shared voting power 2,704,150
		(9)	Sole dispositive power 0
		(10)	Shared dispositive power 2,704,150
(11)	Aggregate amount beneficially owned by each reporting person 2,704,150
(12)	Check if the aggregate amount in Row (11) excludes certain shares (see instructions)
(13)	Percent of class represented by amount in Row (11) 2.9%
(14)	Type of reporting person (see instructions) HC, OO

CUSIP NO. 749227609 13D Page 6 of 19 Pages

(1)	Names of reporting persons NexPoint Real Estate Strategies Fund
(2)	Check the appropriate box if a member of a group (see instructions) (a)  ☐        (b)  ☐
(3)	SEC use only
(4)	Source of funds (see instructions) WC
(5)	Check if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e)
(6)	Citizenship or place of organization Delaware
Number of shares beneficially owned by each reporting person with:		(7)	Sole voting power 0
		(8)	Shared voting power 98,040
		(9)	Sole dispositive power 0
		(10)	Shared dispositive power 98,040
(11)	Aggregate amount beneficially owned by each reporting person 98,040
(12)	Check if the aggregate amount in Row (11) excludes certain shares (see instructions)
(13)	Percent of class represented by amount in Row (11) 0.1%
(14)	Type of reporting person (see instructions) IV

CUSIP NO. 749227609 13D Page 7 of 19 Pages

(1)	Names of reporting persons NexPoint Advisors, L.P.
(2)	Check the appropriate box if a member of a group (see instructions) (a)  ☐        (b)  ☐
(3)	SEC use only
(4)	Source of funds (see instructions) AF/OO
(5)	Check if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e)
(6)	Citizenship or place of organization Delaware
Number of shares beneficially owned by each reporting person with:		(7)	Sole voting power 0
		(8)	Shared voting power 98,040
		(9)	Sole dispositive power 0
		(10)	Shared dispositive power 98,040
(11)	Aggregate amount beneficially owned by each reporting person 98,040
(12)	Check if the aggregate amount in Row (11) excludes certain shares (see instructions)
(13)	Percent of class represented by amount in Row (11) 0.1%
(14)	Type of reporting person (see instructions) IA, PN

CUSIP NO. 749227609 13D Page 8 of 19 Pages

(1)	Names of reporting persons NexPoint Advisors GP, LLC
(2)	Check the appropriate box if a member of a group (see instructions) (a)  ☐        (b)  ☐
(3)	SEC use only
(4)	Source of funds (see instructions) AF/OO
(5)	Check if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e)
(6)	Citizenship or place of organization Delaware
Number of shares beneficially owned by each reporting person with:		(7)	Sole voting power 0
		(8)	Shared voting power 98,040
		(9)	Sole dispositive power 0
		(10)	Shared dispositive power 98,040
(11)	Aggregate amount beneficially owned by each reporting person 98,040
(12)	Check if the aggregate amount in Row (11) excludes certain shares (see instructions)
(13)	Percent of class represented by amount in Row (11) 0.1%
(14)	Type of reporting person (see instructions) HC, OO

CUSIP NO. 749227609 13D Page 9 of 19 Pages

(1)	Names of reporting persons Highland Select Equity Master Fund, L.P.
(2)	Check the appropriate box if a member of a group (see instructions) (a)  ☐        (b)  ☐
(3)	SEC use only
(4)	Source of funds (see instructions) WC
(5)	Check if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e)
(6)	Citizenship or place of organization Bermuda
Number of shares beneficially owned by each reporting person with:		(7)	Sole voting power 0
		(8)	Shared voting power 2,677,087
		(9)	Sole dispositive power 0
		(10)	Shared dispositive power 2,677,087
(11)	Aggregate amount beneficially owned by each reporting person 2,677,087
(12)	Check if the aggregate amount in Row (11) excludes certain shares (see instructions)
(13)	Percent of class represented by amount in Row (11) 2.9%
(14)	Type of reporting person (see instructions) PN

CUSIP NO. 749227609 13D Page 10 of 19 Pages

(1)	Names of reporting persons Highland Select Equity Fund GP, L.P.
(2)	Check the appropriate box if a member of a group (see instructions) (a)  ☐        (b)  ☐
(3)	SEC use only
(4)	Source of funds (see instructions) AF/OO
(5)	Check if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e)
(6)	Citizenship or place of organization Delaware
Number of shares beneficially owned by each reporting person with:		(7)	Sole voting power 0
		(8)	Shared voting power 2,677,087
		(9)	Sole dispositive power 0
		(10)	Shared dispositive power 2,677,087
(11)	Aggregate amount beneficially owned by each reporting person 2,677,087
(12)	Check if the aggregate amount in Row (11) excludes certain shares (see instructions)
(13)	Percent of class represented by amount in Row (11) 2.9%
(14)	Type of reporting person (see instructions) PN

CUSIP NO. 749227609 13D Page 11 of 19 Pages

(1)	Names of reporting persons Highland Select Equity GP, LLC
(2)	Check the appropriate box if a member of a group (see instructions) (a)  ☐        (b)  ☐
(3)	SEC use only
(4)	Source of funds (see instructions) AF/OO
(5)	Check if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e)
(6)	Citizenship or place of organization Delaware
Number of shares beneficially owned by each reporting person with:		(7)	Sole voting power 0
		(8)	Shared voting power 2,677,087
		(9)	Sole dispositive power 0
		(10)	Shared dispositive power 2,677,087
(11)	Aggregate amount beneficially owned by each reporting person 2,677,087
(12)	Check if the aggregate amount in Row (11) excludes certain shares (see instructions)
(13)	Percent of class represented by amount in Row (11) 2.9%
(14)	Type of reporting person (see instructions) OO

CUSIP NO. 749227609 13D Page 12 of 19 Pages

(1)	Names of reporting persons Highland Capital Management, L.P.
(2)	Check the appropriate box if a member of a group (see instructions) (a)  ☐        (b)  ☐
(3)	SEC use only
(4)	Source of funds (see instructions) AF/OO
(5)	Check if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e)
(6)	Citizenship or place of organization Delaware
Number of shares beneficially owned by each reporting person with:		(7)	Sole voting power 0
		(8)	Shared voting power 2,677,087
		(9)	Sole dispositive power 0
		(10)	Shared dispositive power 2,677,087
(11)	Aggregate amount beneficially owned by each reporting person 2,677,087
(12)	Check if the aggregate amount in Row (11) excludes certain shares (see instructions)
(13)	Percent of class represented by amount in Row (11) 2.9%
(14)	Type of reporting person (see instructions) IA, PN

CUSIP NO. 749227609 13D Page 13 of 19 Pages

(1)	Names of reporting persons Strand Advisors, Inc.
(2)	Check the appropriate box if a member of a group (see instructions) (a)  ☐        (b)  ☐
(3)	SEC use only
(4)	Source of funds (see instructions) AF/OO
(5)	Check if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e)
(6)	Citizenship or place of organization Delaware
Number of shares beneficially owned by each reporting person with:		(7)	Sole voting power 0
		(8)	Shared voting power 2,677,087
		(9)	Sole dispositive power 0
		(10)	Shared dispositive power 2,677,087
(11)	Aggregate amount beneficially owned by each reporting person 2,677,087
(12)	Check if the aggregate amount in Row (11) excludes certain shares (see instructions)
(13)	Percent of class represented by amount in Row (11) 2.9%
(14)	Type of reporting person (see instructions) HC, CO

CUSIP NO. 749227609 13D Page 14 of 19 Pages

(1)	Names of reporting persons James D. Dondero
(2)	Check the appropriate box if a member of a group (see instructions) (a)  ☐        (b)  ☐
(3)	SEC use only
(4)	Source of funds (see instructions) AF/OO
(5)	Check if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e)
(6)	Citizenship or place of organization United States
Number of shares beneficially owned by each reporting person with:		(7)	Sole voting power 0
		(8)	Shared voting power 5,479,277
		(9)	Sole dispositive power 0
		(10)	Shared dispositive power 5,479,277
(11)	Aggregate amount beneficially owned by each reporting person 5,479,277
(12)	Check if the aggregate amount in Row (11) excludes certain shares (see instructions)
(13)	Percent of class represented by amount in Row (11) 5.9%
(14)	Type of reporting person (see instructions) HC, IN

CUSIP NO. 749227609 13D Page 15 of 19 Pages

SCHEDULE 13D

This Amendment No. 4 (this “Amendment”) is being filed on behalf of Highland Global Allocation Fund, a series of Highland Funds II, a Massachusetts business trust (the “Global Fund”), Highland Small-Cap Equity Fund, a series of Highland Funds II, a Massachusetts business trust (the “Small-Cap Fund”), Highland Capital Management Fund Advisors, L.P., a Delaware limited partnership (“Highland Fund Advisors”), Strand Advisors XVI, Inc., a Delaware corporation (“Strand XVI”), NexPoint Real Estate Strategies Fund, a Delaware statutory trust (“NRESF”), NexPoint Advisors, L.P., a Delaware limited partnership (“NexPoint Advisors”), NexPoint Advisors GP, LLC, a Delaware limited liability company (“NexPoint Advisors GP”), Highland Select Equity Master Fund, L.P., a Bermuda limited partnership (“Select Fund”), Highland Select Equity Fund GP, L.P., a Delaware limited partnership (“Select GP”), Highland Select Equity GP, LLC, a Delaware limited liability company (“Select LLC”), Highland Capital Management, L.P., a Delaware limited partnership (“Highland Capital”), Strand Advisors, Inc., a Delaware corporation (“Strand”) and James D. Dondero (collectively, the “Reporting Persons”), and amends the Schedule 13D filed on October 7, 2016, as subsequently amended on November 10, 2016, as subsequently amended on December 5, 2016, and as subsequently amended on December 22, 2016. This Amendment updates the purpose of the transaction and files a new exhibit. The Schedule 13D is supplementally amended as follows:

Item 4. Purpose of Transaction.

On February 8, 2017, NexPoint Real Estate Advisors, LP, an affiliate of Highland Capital, sent a slide deck presentation (the “Presentation”) to the board of trustees of the Issuer. The Presentation provides additional information on the plans or proposals disclosed in earlier amendments to the Schedule 13D, and also contained in letters delivered to Mr. Michael J. Malter, the Chairman of the board of trustees of the Issuer, and filed as exhibits to earlier amendment to the Schedule 13D.

The foregoing description of the Presentation is qualified in its entirety by reference to the full version of the Presentation attached hereto as Exhibit 99.1 and incorporated herein by reference.

Item 5. Interest in Securities of the Issuer.

(a) As of February 8, 2017, (i) the Global Fund may be deemed to beneficially own 2,219,361 Common Shares, which represents approximately 2.4% of the outstanding Common Shares; (ii) Small-Cap Fund may be deemed to beneficially own 484,789 Common Shares, which represents approximately 0.5% of the outstanding Common Shares; (iii) Highland Fund Advisors may be deemed to beneficially own 2,704,150 Common Shares, which represents approximately 2.9% of the outstanding Common Shares; (iv) Strand XVI may be deemed to beneficially own 2,704,150 Common Shares, which represents approximately 2.9% of the outstanding Common Shares; (v) NRESF may be deemed to beneficially own 98,040 Common Shares, which represents approximately 0.1% of the outstanding Common Shares; (vi) NexPoint Advisors may be deemed to beneficially own 98,040 Common Shares, which represents approximately 0.1% of the outstanding Common Shares; (vii) NexPoint Advisors GP may be deemed to beneficially own 98,040 Common Shares, which represents approximately 0.1% of the outstanding Common Shares; (viii) the Select Fund may be deemed to beneficially own 2,677,087 Common Shares, which represents approximately 2.9% of the outstanding Common Shares; (ix) Select GP may be deemed to beneficially own 2,677,087 Common Shares, which represents approximately 2.9% of the outstanding Common Shares; (x) Select LLC may be deemed to beneficially own 2,677,087 Common Shares, which represents approximately 2.9% of the outstanding Common Shares; (xi) Highland Capital may be deemed to beneficially own 2,677,087 Common Shares, which represents approximately 2.9% of the outstanding Common Shares; (xii) Strand may be deemed to beneficially own 2,677,087 Common Shares, which represents approximately 2.9% of the outstanding Common Shares; and (xiii) James D. Dondero may be deemed to beneficially own 5,479,277 Common Shares, which represents approximately 5.9% of the outstanding Common Shares.

CUSIP NO. 749227609 13D Page 16 of 19 Pages

(b)

Name of Reporting Person	Sole Voting Power	Shared Voting Power	Sole Dispositive Power	Shared Dispositive Power
Highland Global Allocation Fund	0	2,219,361	0	2,219,361
Highland Small-Cap Equity Fund	0	484,789	0	484,789
Highland Capital Management Fund Advisors, L.P.	0	2,704,150	0	2,704,150
Strand Advisors XVI, Inc.	0	2,704,150	0	2,704,150
NexPoint Real Estate Strategies Fund	0	98,040		98,040
NexPoint Advisors, L.P.	0	98,040	0	98,040
NexPoint Advisors GP, LLC	0	98,040	0	98,040
Highland Select Equity Master Fund, L.P.	0	2,677,087	0	2,677,087
Highland Select Equity Fund GP, L.P.	0	2,677,087	0	2,677,087
Highland Select Equity GP, LLC	0	2,677,087	0	2,677,087
Highland Capital Management, L.P.	0	2,677,087	0	2,677,087
Strand Advisors, Inc.	0	2,677,087	0	2,677,087
James D. Dondero	0	5,479,277	0	5,479,277

(c) Annex A attached hereto lists all transactions in the Common Shares during the past 60 days by the Reporting Persons. Except as otherwise noted, the transactions in the Common Shares were effected in the open market.

(d) No person other than the Reporting Persons is known to have the right to receive, or the power to direct the receipt of dividends from, or proceeds from the sale of, the Common Shares.

(e) Not applicable.

Item 7. Materials to be Filed as Exhibits.

99.1 Slide Deck Presentation, dated February 2017.

CUSIP NO. 749227609 13D Page 17 of 19 Pages

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

Dated: February 8, 2017

HIGHLAND FUNDS II, on behalf of its series Highland Global Allocation Fund
	By:	/s/ Brian Mitts
		Name: Brian Mitts
		Title: Authorized Signatory
HIGHLAND FUNDS II, on behalf of its series Highland Small-Cap Equity Fund
	By:	/s/ Brian Mitts
		Name: Brian Mitts
		Title: Authorized Signatory
HIGHLAND CAPITAL MANAGEMENT FUND ADVISORS, L.P.
By:	Strand Advisors XVI, Inc., its general partner
	By:	/s/ Brian Mitts
		Name: Brian Mitts
		Title: Authorized Signatory
STRAND ADVISORS XVI, INC.
	By:	/s/ Brian Mitts
		Name: Brian Mitts
		Title: Authorized Signatory
NEXPOINT REAL ESTATE STRATEGIES FUND
	By:	/s/ Brian Mitts
		Name: Brian Mitts
		Title: Authorized Signatory
NEXPOINT ADVISORS, L.P.
By:	NexPoint Advisors GP, LLC, its general partner
	By:	/s/ Brian Mitts
		Name: Brian Mitts
		Title: Authorized Signatory
NEXPOINT ADVISORS GP, LLC
	By:	/s/ Brian Mitts
		Name: Brian Mitts
		Title: Authorized Signatory

CUSIP NO. 749227609 13D Page 18 of 19 Pages

HIGHLAND SELECT EQUITY MASTER FUND, L.P.
By: Highland Select Equity Fund GP, L.P., its general partner
By: Highland Select Equity GP, LLC, its general partner
By: Highland Capital Management, L.P., its sole member
By: Strand Advisors, Inc., its general partner
	By:	/s/ Scott Ellington
		Name: Scott Ellington
		Title: Authorized Signatory
HIGHLAND SELECT EQUITY FUND GP, L.P.
By: Highland Select Equity GP, LLC, its general partner
By: Highland Capital Management, L.P., its sole member
By: Strand Advisors, Inc., its general partner
	By:	/s/ Scott Ellington
		Name: Scott Ellington
		Title: Authorized Signatory
HIGHLAND SELECT EQUITY GP, LLC
By: Highland Capital Management, L.P., its sole member
By: Strand Advisors, Inc., its general partner
	By:	/s/ Scott Ellington
		Name: Scott Ellington
		Title: Authorized Signatory
HIGHLAND CAPITAL MANAGEMENT, L.P.
By: Strand Advisors, Inc., its general partner
	By:	/s/ Scott Ellington
		Name: Scott Ellington
		Title: Authorized Signatory
STRAND ADVISORS, INC.
	By:	/s/ Scott Ellington
		Name: Scott Ellington
		Title: Authorized Signatory
/s/ James D. Dondero
James D. Dondero

CUSIP NO. 749227609 13D Page 19 of 19 Pages

EXHIBIT INDEX

Exhibit No.	Exhibit Description
99.1	Slide Deck Presentation, dated February 2017.

ANNEX A

TRANSACTIONS

The following table sets forth all transactions with respect to the Common Shares effected in the last sixty days by the Reporting Persons on behalf of the Reporting Persons in respect of the Shares, inclusive of any transactions effected through 4:00 p.m., New York City time, on February 8, 2017.

Date	Effected By	Nature of Transaction	Quantity	Price
01/31/2017	Highland Select Equity Master Fund, L.P.	Open Market Sale	98,370	$3.4847

EX-99.1

Exhibit 99.1

FEBRUARY 2017 UNLOCKING VALUE FOR RAIT SHAREHOLDERS NEXPOINT REAL ESTATE ADVISORS AN AFFILIATE OF HIGHLAND CAPITAL MANAGEMENT

INTRODUCTION: SHAREHOLDERS NEED A CHANGE IN STATUS QUO EXECUTIVE SUMMARY & AGENDA OBSERVATIONS ON RAIT’S RELATIVE PERFORMANCE Per the request of Mr. Malter, the Lead Director and Chairman • Substantial, long?term underperformance relative to peers of the Board, in his letter dated December 8, 2016 requesting • Complex business with no articulated long?term strategy additional information on NexPoint Real Estate Advisors, LP’s (“NexPoint”) proposal to externalize management of RAIT • Outsized G&A and compensation expense Financial Trust (“RAIT” or “RAS”) to NexPoint, we are pleased to presentthisoverviewtotheRAITBoard. • Lack of defined niche • High balance sheet leverage and escalating cost of capital • Discussion of recent events and key challenges facing RAIT • Limited confidence in dividend sustainability after 50% cut • Potential structure for a strategic transaction with NexPoint • Seemingly indiscriminant capital allocation • Discussion of potential benefits for RAIT shareholders • Lack of transparency from consolidated financial statements • Additional information on Highland, NexPointand NexBank HISTORICAL RAIT SHARE PRICE & DIVIDEND YIELD TOTAL RETURN VS PEERS $10.00 20.0% 150 Dividend Cut: Dividend Cut: $7.67 12/8/2015 12/8/2015 125 7.50 13.7% 15.0% 100 5.00 9.9% 75 10.0% 50 (38.2%) 2.50 $3.65 9.4% 25 0.00 5.0% 0 12/31/14 06/02/15 11/02/15 04/03/16 09/03/16 02/03/17 12/31/14 06/02/15 11/02/15 04/03/16 09/03/16 02/03/17 RAIT Share Price RAIT Dividend Yield RAIT Peer Set (1) SOURCE: RAIT FILINGS, FACTSET AND SNL FINANCIAL AS OF 2/3/2017 1 (1) COMMERCIAL MORTGAGE REIT PEERS INCLUDE ABR, ACRE, ARI, BXMT, CLNY, LADR, RSO and STWD AN AFFILIATE OF HIGHLAND CAPITAL MANAGEMENT

RAIT HISTORICAL TIMELINE RAIT HISTORICAL SHARE PRICE & RECENT EVENTS 37.2% negative total return since 12/31/2014 8/5/16: Volume RAIT Share 12/8/15: CAD of $0.12/share (000s) Price RAIT cuts quarterly dividend from represents a decline of 7/30/15: RAIT $0.18/share to $0.09/share $0.02/share from 1Q 16 $12 1/6/15: 11/10/16: 10,000 RAIT discloses SEC settlement announces 6/13/16: Initial Highland 11/3/16: Highland offering of 2/25/16: over improper exchange outreach letter CAD of public.ly 8MM shares CAD of $10 transactions from March 2009 to RAIT $0.12/share files letter 3Q15: $0.19/share to November 2012; represents no proposing 8,000 CAD of represents settlement includes change from strategic $0.20/share decline of divestment of Taberna 2Q 16 transaction represents $0.01/share $8 decline of 5/9/16: with RAIT $7.67 from 3Q 15 10/18/16: CAD of 6,000 $0.01/share $0.14/share Michael from 2Q 15 represents Malter $6 replaces 2Q 15: decline of CAD of $0.21/share represents Scott $0.05/share Schaeffer as 4,000 increase of $0.03/share from from 4Q 15 $4 1Q 15 11/4/15: Chairman Michael Malter $3.65 joins RAIT Board $2 9/27/16: 2,000 IRT internalization and appointment of Scott Davidson as CEO announced $0 0 12/31/14 3/17/15 6/2/15 8/17/15 11/2/15 1/17/16 4/3/16 6/18/16 9/3/16 11/18/16 2/3/17 SOURCE: RAIT FILINGS, FACTSET AND SNL FINANCIAL AS OF 2/3/2017 NOTE: 2Q 2015 and 3Q 2015 CAD/SHARE FIGURES TAKEN FROM 2Q 2016 and 3Q 2016 EARNINGS RELEASES, RESPECTIVELY; RAIT CHANGED ITS CAD CALCULATION  TO EXCLUDE THE IMPACT OF 2 REAL PROPERTY SALES BEGINNING IN 1Q 2016

RAIT GOVERNANCE SHOWS LITTLE DEFERENCE TO SHAREHOLDERS 1 AMENDED BYLAWS DISENFRANCHISE SHAREHOLDERS 2 LATE DISCLOSURE OF IRT MARGIN LOAN “On November 16, 2016, the Board of Trustees of RAIT Financial “We expect to receive approximately $77.1 million in proceeds for the Trust, a Maryland Real Estate Investment Trust, approved Stock Repurchase and expect to use up to $51.5 million to repay amendments to amend and restate the Trust’s bylaws, effective as of indebtednesscollateralizedbythesharesofIRTcommonstock…” November16,2016.” –RAIT Financial Trust Form 8?K filed with the Securities and – RAIT Financial Trust Form 8?K filed with the Securities and Exchange Commission and dated September 27, 2016 ExchangeCommission anddatedNovember16, 2016 First indication that RAIT’s interest in IRT had been held on Bylaws amended one week after NexPointproposed a strategic margin and was not previously disclosed in filings (which transaction with RAIT represented ~16.6% of the equity market cap at the time) 3 FAILURE TO MAXIMIZE VALUE OF IRT STAKE “….announcement of a transformative transaction to unlock INTERNALIZATION AND REPURCHASE OF IRT STOCK ($MM) shareholdervaluebymonetizingRAIT’sinterestinIndependenceRealty InternalizationFee Paid to RAIT $43.0 Advisors, LLC, the external advisor of Independence Realty Trust, Inc. (NYSE MKT:IRT), a transaction that is expected to result in RAIT Proceeds from Share Repurchase(@ $8.55 per IRT Share) 62.0 ultimately receiving $120 million in gross proceeds, before fees and Gross Proceeds to RAIT $105.0 expenses.” LESS:Repayment of Loan Collateralized by IRT Shares(1) (43.7) Net Proceeds to RAIT $61.3 –RAIT Financial Trust Press Release dated November 11, 2016 Net Proceeds fromShare Repurchase (@ $10.63 per share)(2) $76.4 Delta (i.e., ValueDestruction to RAIT Shareholders) $15.1 Company response did not address margin loan and continued to focus on gross, rather than net proceeds Potentially ~$15 million of incremental value could have been achieved for RAIT shareholders if not part of an IRT marketed stock offer that represented ~36% of IRT’s float SOURCE: RAIT FINANCIAL TRUST FORM S?11 FILED WITH THE SECURITIES AND EXCHANGED COMMISSION AND DATE JUNE 5, 1998 (1) REFLECTS DEBT RETIREMENT BASED ON Q3 EARNINGS CALL REPRESENTING A PORTION OF THE UP TO $51.5MM MARGIN LOAN DISCLOSED IN THE  FORM8?K DATED 9/27/2016 3 (2) REFLECTS IRT PRICE PER SHARE PRIOR TO ANNOUNCEMENT OF FOLLOW?ON OFFERING

NEXPOINT’S PLAN: EXTERNALIZATION & SIGNIFICANT INVESTMENT 1 Merge RAIT into newly formed vehicle (“NewCo”) that is 2 NexPointwill invest up to $30 million in RAIT at a 15% premium externally managed by NexPointReal Estate Advisors, LP(1) to RAIT’s 30?day VWAP • Initial two?year management agreement • Subject to receipt of an ownership waiver from 8.3% currently o Renewable for successive two?year periods after the initial term • In exchange for (i) proportionate ownership, (ii) board representation and (iii) right to serve as the external o Terminable with 60 days’ notice by majority of the board or manager shareholders • Annual asset management fee of 1.5% on common and preferred stockholders’ equity (excluding Series D) • Most large cap mREITpeers are externally managed and have been more successful than RAIT in generating value for o Payable monthly, expected to be ~$7.5 million annually shareholders • No incentive fees or termination fees • NexPointhas successfully created a shareholder friendly external management structure with NexPointResidential o Any incentive plans to be approved by NewCo’s Trust, Inc., which was the best performing REIT in the MSCI shareholders US REIT Index in 2016, generating 77.1% total returns • Total Annual G&A and compensation expense capped at 1% of gross assets o Cap is expected to be ~$25 million annually (vs. ~$39 million currently(2)) o Asset management fee included within expense cap (1) AS FURTHER DESCRIBED WITH BACKGROUND DETAIL ON PAGE 10. 4 (2) REFLECTS REVENUE, G&A AND COMPENSATION EXPENSE FOR THE 9 MONTHS ENDED 9/30/2016 ANNUALIZED AT A ~1.33X MULTIPLE

NEXPOINT’S PLAN: REDUCE G&A, SELL REO, DELEVER, REINVEST Following the proposed transaction, NexPointwill look to maximize shareholder value by: 1 Exit Property Management Business to Reduce Overhead Expense 2 Sell REO Assets and Focus on Deleveraging • Property management business not required to support NewCo’s • Optimize/sell REO property which has required the continuation of successful future as a mREIT the property management platform • Scale benefits to leveraging NexPoint’s and affiliates’ mortgage • Use proceeds to (i) pay down debt and/or (ii) redeem expensive banking relationships vis?à?vis internal originators and unnecessary preferred shares o RAIT’s internal originations of ~$28 million for the 9 months • Manage RAIT toward optimal capital structure while focusing on ended 9/30 compares to ~$17 million in compensation expense maintaining stable book value • Expense cap will ensure targeted G&A reductions are achieved o Centralize operations in Dallas and New York • Consider dividend increase to the extent CAD accretion is achieved 3 Begin Providing Financing Solutions to CRE Market Again 4 Utilize Infrastructure, Scale & Expertise of NexPointNetwork • Use proceeds from NexPoint investment and remaining capital • Streamline loan servicing, origination and CMBS businesses after asset sales (if any) to begin lending again through utilizing existing NexPoint resources o NexPointand its affiliates have a longstanding track record of • Leverage the affiliate network of NexPoint (Highland/NexBankSSB) investing in and lending to CRE owners and users with unlevered to access target assets annualized returns of 11.93%(1) • Utilize mortgage banking relationships with CBRE, JLL, HFF, etc. to • Expand niche products –DST structures, secondary recaps of funds “fill the gaps” where necessary /partnerships, high?volatility construction loans (HVCRE), etc. Estimated synergies of at least 50% over ~18?24?months would potentially increase pro forma CAD/share by >20% providing flexibility with respect to RAIT’s capital allocation strategy 5 (1) ANNUALIZED RETURN FOR NEXPOINT REAL ESTATE CAPITAL, LP, AN AFFILIATE OF NEXPOINT REAL ESTATE ADVISORS, AS OF 12/31/2016

RAIT/NEXPOINT: A VALUE ENHANCING PATH FORWARD Potential opportunity for earnings accretion of >20% (holding RAIT’s ILLUSTRATIVE RAIT PRO FORMA CAD PER SHARE 2016E CAD multiple constant) through reduced (i) G&A, (ii) improved ($ in MM, except per share figures) 9 Mos. Ended Annualized (2) capital structure and/or (iii) enhanced origination execution 9/30/2016 Annl’d per Share (3) Net Income (Loss) Available to Common Shares ($25.4) ($33.9) ($0.37) • G&A expense of ~18% of RAIT’s LTM revenue at high end of peers(1) CAD Adjustments, Net 59.5 79.3 0.87 Cash Available for Distribution $34.0 $45.4 $0.50 o Implied ~$20 million of savings from 50% G&A reduction Adjustments Under HCM Proposal Plus: RAIT G&A & Compensation Expense (4) $29.4 $39.2 $0.43 o Expense cap would limit total G&A to ~$25 million annually Less: Estimated HCM Pro Forma G&A Expense (14.7) (19.6) (0.21) Net Pro Forma G&A with Effect of 50% Synergies $14.7 $19.6 $0.21 • Limited observed value being ascribed to RAIT’s internal Less: Property Mgmt. Fees @ 20.0% Margin (1.8) (2.3) (0.03) management structure or the third party fee generation Less: Fees Paid to RAIT by IRT (5.5) (7.3) (0.08) Pro Forma CAD (incl. HCM Synergies) $41.5 $55.3 $0.61 • Most mREITsare externally managed evidencing acceptance by CAD Accretion 21.9% CAD Dividend institutional shareholders Implied Trading Metrics (5) Analysis Analysis • Proven management platform of scale in NexPointwith access to RAIT Annl’d CAD /Dividend per Share $0.50 $0.36 Implied RAIT CAD Multiple / Dividend Yield 7.3x 9.9% market leading network to drive origination Memo: Implied RAIT CAD Payout Ratio (5) 72% LTM G&A AS A % OF REVENUE VS. PEERS(1) ILLUSTRATIVE SHARE PRICE ANALYSIS(6) 36.5% Pro Forma CAD / CAD per Share 32.7% 31.6% Current Pro Forma $45.4 $50.3 $55.3 $60.3 18.6% 18.4% 18.1% 17.0% 17.0% 15.9% 0.50 0.55 0.61 0.66 9.1% Yield 9.9% $3.65 $4.05 $4.45 $4.85 9.0% 4.00 4.43 4.87 5.32 RAS Pro Forma Dividend 8.0% 4.50 4.99 5.48 5.98 SOURCE: RAIT FILINGS, FACTSET AND SNL FINANCIAL AS OF 2/3/2017 (1) COMMERCIAL MORTGAGE REIT PEERS INCLUDE ABR, ACRE, ARI, BXMT, CLNY, LADR, RSO and STWD (2) RAIT REFLECTS REVENUE, G&A AND COMPENSATION EXPENSE FOR THE 9 MONTHS ENDED 9/30/2016 ANNUALIZED AT A ~1.33X MULTIPLE (3) PER SHARE DATA IS BASED ON ~91.1MM SHARES OUTSTANDING AS OF 9/30/2016 (4) ESTIMATED SYNERGIES BASED ON OBSERVED 1H 2016 RAS G&A COMPENSATION EXPENSE OF $25.6 MILLION (~$51.3MM ON AN ANNUALIZED BASIS)THAT WOULD  IMPLY >30% CAD ACCRETION (5) IMPLIED TRADING METRICS BASED ON RAIT SHARE PRICE AS OF 2/3/2017 6 (6) ILLUST. SHARE PRICE ANALYSIS ASSUMES RAIT MAINTAINS CAD PAYOUT RATIO OF ~72% (EXCL. VALUE ASCRIBED TO THE IRT CONTRACT & PROPERTY  MANAGEMENT VALUE OF ~$43MM) AN AFFILIATE OF

NEXPOINT’S PROPOSAL IS HIGHLY COMPELLING VS. STATUS QUO NexPointProposal Status Quo Comments • External • Internal? External management consistent • No incentive or termination fees • New CEO has been part of executive with large cap public peers Management • Terminable by Board/shareholder team for the last six years ofoperating (Blackstone, Starwood, Apollo and Structure majority challenges and significant stock Ares) underperformance • Currently ~6% of common stock • ~1% held by Management & Trustees? Additional investment from one of Ownership • Proposal to increase interest significantly RAIT’s largest shareholdersfurther through up to $30 million investment increases alignment • Proposed expense cap at 1% gross assets • ~$39 million on an annualized basis, or? Meaningful savings to (i) enhance G&A & Comp. • Estimated ~$25 million cap includes ~18% ofrevenue(1) CAD and (ii) supportfuture Expense asset management fee • ~$17 million of compensation expense dividend increases • No incentive fees or termination fees with only ~$28 million of issued loans(1) • History of strongdisclosure and active • Limited communication on recent? Abilityto re?engage shareholder outreach at NXRT well received by disclosuresand corporate governance base with an attractive path Shareholder shareholders/analysts changes forward for RAIT Engagement • Achieving goals set by management • Analyst coverage at five with three • Analysts coverage increased to four over the “Hold” and two “Buy” ratings last 12?months (all with “Buy” ratings) • Exit property management business • No updatedinformation onoverhead or?Identified andexecutable business • Sell REO assets business plan since announced IRT strategy with meaningful • De?lever through business/asset sales internalization in August 2016 shareholder value creation • Very limited underwriting activity in opportunity • Investup to ~$30 million into RAIT to Business underwrite new business, as well as 2016 draws attention to G&A burden Plan other capital allocation alternatives • Continued focus on conduit lending • Implement expensecap activity • Leverage scale of NexPointand network created by Highland/NexBank/SSB 7 SOURCE: RAIT FILINGS, FACTSET AND SNL FINANCIAL AS OF 2/3/2017 (1) REFLECTS REVENUE, G&A AND COMPENSATION EXPENSE FOR THE 9 MONTHS ENDED 9/30/2016 ANNUALIZED AT A ~1.33X MULTIPLE AN AFFILIATE OF

WHO IS NEXPOINT REAL ESTATE ADVISORS?

AN AFFILIATE OF

INTRODUCTION TO HIGHLAND CAPITAL MANAGEMENT, L.P. HIGHLAND CAPITAL MANAGEMENT, L.P. Founded in 1993, Highland is an SEC?registered investment adviser Highland blends a top?down risk management framework with the which, together with our affiliates, has approximately $14.8 billion of foundation of robust bottoms up research across the portfolio. Our time?assets under management. We are one of the largest and most tested investment process is rooted in our ability to identify mispricing experienced global alternative credit managers. Our firm specializes in throughrobustfundamentalanalysis,proactivediligence,monitoringand credit strategies, such as credit hedge funds, long?only funds and very nimble trading capabilities. The Investments team is comprised of separate accounts, distressed and special situations private equity, real industryfocusedresearchprofessionalswithanaverageofapproximately estate, and collateralized loan obligations (CLOs). Highland also offers 11 years of investment experience. These professionals are responsible alternativeinvestments, including emergingmarkets, long/shortequities, for reviewing existing investments, evaluating opportunities across issuer and natural resources. Highland’s diversified client base includes public capital structures and monitoring trends within those industries. We pension plans, foundations, endowments, corporations, financial maintain investment thesis and sell?discipline, as well as strive for alpha institutions, fund of funds, governments, and high net?worth individuals. by avoidance. Finally, our active and focused portfolio management Our firm is headquartered in Dallas, Texas and maintains offices in New processdrive ourbolddecisionmakingand hasbeenakeydriverof York,SaoPaulo,Singapore,andSeoul. creatingalphainthestrategyovertime. Bonds CLO Debt 5% and Equity $14.8 BILLION 12% IN ASSETS UNDER MANAGEMENT1 MORE THAN 130 TOTAL AUM INVESTMENT, ACCOUNTING, COMPLIANCE, LEGAL 1 AND HUMAN RESOURCE PROFESSIONALS2 Equities $14.8 Billion 20% 63% DALLAS NEW YORK Loans SAO PAULO SINGAPORE SEOUL (1) AS OF 12/31/2016, INCLUSIVE OF HIGHLAND CAPITAL MANAGEMENT, L.P. AND AFFILIATES, BASED ON FEE CALCULATION AUM (2) SOME, BUT NOT ALL, OF THE PROFESSIONALS WILL PROVIDE SERVICES THROUGH A SHARED SERVICES AGREEMENT BETWEEN NEXPOINT REAL ESTATE ADVISORS,  L.P. AND HIGHLAND 9 CAPITAL MANAGEMENT, L.P. THE SHARED SERVICES CONTRACT WILL BE INCLUDED IN THE G&A CAP PROPOSED IN NEXPOINT’S PLAN TO RAIT’S BOARD  OF DIRECTORS AN AFFILIATE OF

INTRODUCTION TO NEXPOINT REAL ESTATE ADVISORS NEXPOINT REAL ESTATE ADVISORS AND AFFILIATES PREFERRED EQUITY/MEZZ NexPoint Real Estate Advisors, L.P. (“NexPoint”) is anaffiliate of Highland Capital Management and was created to manage Highland’s Real Estate $806M platform. The NexPoint Real Estate team has completed over 90 transactions with more than $2.3 billion(1) invested since 2014. Our investmentteamhasacombined70yearsofinvestmentexperiencewith some of the worlds most sophisticated institutions and investors in the following asset classes: real estate, private equity, alternatives, credit REAL ESTATE andequity. $2.3B(1) The Advisor and its affiliates currently manage a publicly traded REIT, NexPoint Residential Trust, Inc. (NYSE:NXRT), with approximately $1 EQUITY billion in multifamily real property located in the Southeast and SouthwestUnitedStates. $1.45B 10 (1) AS OF 12/31/2016, INCLUSIVE OF NEXPOINT REAL ESTATE ADVISORS, L.P. AND ITS AFFILIATES. DOLLAR AMOUNTS REPRESENT GROSS REAL PROPERTY VALUE AN AFFILIATE OF

WHO IS NEXBANK CAPITAL? AN AFFILIATE OF

INTRODUCTION TO NEXBANK CAPITAL, INC. NATIONAL RANKINGS NexBank Capital, Inc. (“NexBank”) is a financial services company with assets of $4.6 #1 in Core Deposits(2) billion and whose primary subsidiary is a commercial bank. NexBank provides commercial #3 in Net Loans and Leases(2) banking, mortgage banking, investment banking and corporate advisory services to clients #7 in Core Revenue(2) throughouttheU.S. NexBank primarily serves institutionalclientsandfinancialinstitutions and is also committed to serving the banking and financial needs of large corporations, middle?marketcompaniesandrealestateinvestors. #1 ROAA Subchapter S Bank with more than $1 Billion in Assets(3) KEYFACTS: #1 ROAE Subchapter S Bank with more than $1 Billion in Assets(3) • AffiliatedwithHighlandCapitalManagementthroughcommonownership • 4th largestbankinDallas,Texasand13thlargestbankinthestateofTexas(1) • Legallendinglimitof$87 millionwithsyndicationcapabilitiesforlargertransactions #2 Residential Real Estate Lender: “Top 25 Residential Real Estate Lenders • Mortgage banking volume exceeded $1.85 billion in 2013, $2.19 billion in 2014, and Ranked by Total Profitability”(4) $3.48 billionin2015 (ascomparedto$1.00B forRAITin2015) • $4.3billionof1?4familyresidentialloansservicedforothers(FNMA,FHLMC,GNMA) Superior bank quality rating with • AgencyServicesmanagesover$2billionincorporateloans a perfect score of 300(5) BUSINESS LINES COMMERCIAL BANKING MORTGAGE BANKING INSTITUTIONAL SERVICES NEXBANK’S CRE FOCUSED TEAM REALESTATE LENDING WAREHOUSE LINES FINANCIALINSTITUTIONS Credit 6 Credit Officers 1 Credit Analyst CORPORATELENDING WHOLESALE AND CORRESPONDENT CHANNELS PUBLICFUNDS 4 Underwriters SPECIALTYFINANCING JUMBO SOLUTIONS CORPORATE FINANCE Underwriting 6 Contract Underwriters 2 Client Advocates TREASURYMANAGEMENT MSRs CUSTOMIZEDDEPOSIT SERVICES Risk Management 1 Risk Officer PROPERTY MANAGEMENT 1 SVP Sales (1) SNL FINANCIAL, BASED ON TOTAL ASSETS AS OF 12/31/2016 FOR BANKS HEADQUARTERED AND OPERATING IN TEXAS (NEXBANKSSB) 2VPs (2) BANK DIRECTOR MAGAZINE, 2014 GROWTH LEADERS RANKING (NEXBANKCAPITAL, INC.) (3) ICBA INDEPENDENT BANKER MAGAZINE, 2016 THE BEST OF THE BEST (NEXBANKSSB) (4) BANK DIRECTOR MAGAZINE’S FOCUSED STRATEGY RANKING FROM 2ND QUARTER 2016 (NEXBANKCAPITAL, INC.) 12 (5) IDC FINANCIAL PUBLISHING, INC. FROM 3RD QUARTER 2016 (NEXBANKSSB) AN AFFILIATE OF

GROWTH & PERFORMANCE Asset & Deposit Growth(1) Portfolio Concentration(1) (2013?2016) (As of 12/31/2016) $5,000MM SF 1?4 $ 1,069.1 38% Loans $4,000MM Deposits Warehouse $ 151.9 5% Assets Whole/Corr. $ 187.2 7% $3,000MM SNCs $ 508.5 18% $2,000MM CRE $ 521.1 18% C&I $ 278.7 10% $1,000MM Other $ 108.6 4% $0MM Total Portfolio $ 2,825.1 100% NPAs /Assets(2) Net Income & ROAE(1) (2013?2016) (2013?2016) 36 % NPAs / Assets Net Income 2.0 % $90MM 34 % 40.0 % ROAE 1.5 % 30.0 % $60MM 23 % 1.0 % 20.0 % 13 % 0.18 $30MM 0.5 % 0.11 10.0 % 0.04 0.13 0.03 0.04 0.14 0.12 0.13 0.11 0.06 0.03 0.03 0.01 0.01 0.01 $26 $53 $83 0.0 % $12 $0MM 0.0 % 2013Y 2014Y 2015Y 2016Y (1) NEXBANKCAPITAL, INC. 13 (2) NEXBANKSSB AN AFFILIATE OF

CRE PORTFOLIO OVERVIEW CRE PORTFOLIO CONCENTRATION(1) NNN PORTFOLIO(1) Construction 4% WAVG Lease Term 17.0 years Current LTV: 65% Land1% 1?4 Family (Investor)6% Warehouse1% WAVG Loan Term 5.7 years < 60 > 70 15% 25% Other6% Rate 4.18% 60 to 70 Loan Type Fixed 60% Retail8% NNN/NN Leased44% Office12% NNN PORTFOLIO –STATE CONCENTRATION(1) Multi?Family 18% Top Ten States Booked State ($MM) TX 50.5 AZ 14.6 GA 12.8 PA 12.3 FL 10.0 KY 9.4 OK 8.5 TN 7.7 OR 6.4 NC 6.3 14 (1) NEXBANKSSB PORTFOLIO AS OF 12/31/2016 AN AFFILIATE OF

CONTACT INFORMATION NEXPOINT REAL ESTATE ADVISORS 300 Crescent Court, Suite 700 Dallas, TX 75201 Phone: 972.628.4100 Fax: 972.628.4147 15 AN AFFILIATE OF