SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
Under the Securities Exchange Act of 1934
NexPoint Real Estate Strategies Fund
(Name of Issuer)
Class Z Shares of Beneficial Interest
(Title of Class of Securities)
65342M309
(CUSIP NUMBER)
Jason Post, Chief Compliance Officer
NexPoint Advisors, L.P.
300 Crescent Court, Suite 700
Dallas, Texas 75201
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)
July 12, 2016
(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 which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g) check the following box ¨.
The information required in the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended (the “Act”), or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act.
Page 1 of 9
| CUSIP No. 65342M309 | 13D | Page 2 of 9 |
| 1 | NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Highland Capital Management, L.P. | |||||
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) ¨ (b) x | |||||
| 3 | SEC USE ONLY
| |||||
| 4 | SOURCE OF FUNDS*
WC | |||||
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 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
50,150.45 | ||||
| 8 | SHARED VOTING POWER
0 | |||||
| 9 | SOLE DISPOSITIVE POWER
50,150.45 | |||||
| 10 | SHARED DISPOSITIVE POWER
0 | |||||
| 11 |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
50,150.45 | |||||
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
¨ | |||||
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
19.6% | |||||
| 14 | TYPE OF REPORTING PERSON*
PN | |||||
| * | SEE INSTRUCTIONS BEFORE FILLING OUT |
| CUSIP No. 65342M309 | 13D | Page 3 of 9 |
| 1 | NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
James D. Dondero | |||||
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) ¨ (b) x | |||||
| 3 | SEC USE ONLY
| |||||
| 4 | SOURCE OF FUNDS*
AF | |||||
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 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
195,800.2 | |||||
| 9 | SOLE DISPOSITIVE POWER
0 | |||||
| 10 | SHARED DISPOSITIVE POWER
195,800.2 | |||||
| 11 |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
195,800.2 | |||||
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
¨ | |||||
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
76.4% | |||||
| 14 | TYPE OF REPORTING PERSON*
IN | |||||
| * | SEE INSTRUCTIONS BEFORE FILLING OUT |
| CUSIP No. 65342M309 | 13D | Page 4 of 9 |
| 1 | NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Nancy Marie Dondero | |||||
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) ¨ (b) x | |||||
| 3 | SEC USE ONLY
| |||||
| 4 | SOURCE OF FUNDS*
AF | |||||
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 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
140,562.25 | ||||
| 8 | SHARED VOTING POWER
0 | |||||
| 9 | SOLE DISPOSITIVE POWER
140,562.25 | |||||
| 10 | SHARED DISPOSITIVE POWER
0 | |||||
| 11 |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
140,562.25 | |||||
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
¨ | |||||
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
54.9% | |||||
| 14 | TYPE OF REPORTING PERSON*
IN | |||||
| * | SEE INSTRUCTIONS BEFORE FILLING OUT |
SCHEDULE 13D
This Schedule 13D (this “Schedule 13D”) is being filed on behalf of Highland Capital Management, L.P., a Delaware limited partnership (“Highland Capital”), James D. Dondero and Nancy Marie Dondero (collectively, the “Reporting Persons”) relating to the Class Z Shares of Beneficial Interests (the “Shares”), of NexPoint Real Estate Strategies Fund, a Delaware statutory trust (the “Issuer”), held by the Reporting Persons and certain related or other entities.
James D. Dondero is the President of Strand Advisors, Inc., a Delaware corporation (“Strand”), and controls NexPoint Advisors GP, LLC, a Delaware limited liability company (“NexPoint GP”). Strand is the general partner of Highland Capital. NexPoint GP is the general partner of NexPoint Advisors, L.P., a Delaware limited partnership and the investment advisor to the Issuer (“NexPoint”). Nancy Marie Dondero is the trustee of a trust (the “Trust”). This Schedule 13D relates to Shares of the Issuer held by (i) Highland Capital, (ii) NexPoint and (iii) the Trust.
| Item 1. | Security and Issuer |
Securities acquired: Class Z Shares of Beneficial Interest (the “Shares”).
| Issuer: | NexPoint Real Estate Strategies Fund |
300 Crescent Court
Suite 700
Dallas, Texas 75201
| Item 2. | Identity and Background |
(a) This Schedule 13D is filed by and on behalf of each of the following persons (collectively, the “Reporting Persons”): (i) Highland Capital Management, L.P., a Delaware limited partnership (“Highland Capital”), (ii) James D. Dondero and (iii) Nancy Marie Dondero.
Each of the Reporting Persons may be deemed to be a member of a group with respect to the Issuer or securities of the Issuer for the purposes of Section 13(d) or 13(g) of the Securities Exchange Act of 1934, as amended (the “Act”). Each of the Reporting Persons declares that neither the filing of this Schedule 13D nor anything herein shall be construed as evidence that such person is, for the purposes of Section 13(d) or 13(g) of the Act or any other purpose, (i) acting (or has agreed or is agreeing to act together with any other person) as a partnership, limited partnership, syndicate or other group for the purpose of acquiring, holding or disposing of securities of the Issuer or otherwise with respect to the Issuer or any securities of the Issuer or (ii) a member of any group with respect to the Issuer or any securities of the Issuer.
(b) The address of the principal business office of Highland Capital and Mr. Dondero is 300 Crescent Court, Suite 700, Dallas, Texas 75201. The address of the principal business office of Ms. Dondero is 1010 Crescent Beach Road, Vero Beach, Florida, 32963.
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(c) The principal business of Highland Capital, a registered investment adviser, is acting as investment adviser and/or manager to affiliates of Highland Capital. The principal business of Mr. Dondero is managing affiliates of Highland Capital. Mr. Dondero may be deemed to beneficially own Shares owned and/or held by and/or for the account of and/or for the benefit of Highland Capital and NexPoint. The principal business of Nancy Marie Dondero is serving as trustee of the Trust.
(d) During the last five years, none of the Reporting Persons, nor, to the knowledge of the Reporting Persons, any of the persons controlling the Reporting Persons has been convicted in a criminal proceeding in either case of the type specified in Items 2(d) or (e) of Schedule 13D.
(e) During the last five years, none of the Reporting Persons, nor, to the knowledge of the Reporting Persons, any of the persons controlling the Reporting Persons was a party to a civil proceeding in either case of the type specified in Items 2(d) or (e) of Schedule 13D.
(f) Mr. Dondero is a United States citizen. Highland Capital is a Delaware entity. Ms. Dondero is a United States citizen.
| Item 3. | Source and Amount of Funds |
As of August 16, 2016, the Reporting Persons had invested approximately $3,901,750.04 (inclusive of brokerage commissions) in the securities of the Issuer. The source of these funds was the working capital and/or affiliated funds of the Reporting Persons.
| Item 4. | Purpose of the Transaction |
James D. Dondero is the President of Strand and controls NexPoint GP. Strand is the general partner of Highland Capital. NexPoint GP is the general partner of NexPoint, the investment advisor to the Issuer. Nancy Marie Dondero is the trustee of the Trust. The Shares were purchased by the Reporting Persons in open market transactions for the benefit of (i) Highland Capital, (ii) NexPoint and (iii) the Trust.
The Reporting Persons purchased the Shares of the Issuer based on the belief that such securities, when purchased, represented an attractive investment opportunity. The Reporting Persons continuously assess the Issuer’s business, financial condition, results of operations and prospects, general economic conditions, other developments and additional investment opportunities. The Reporting Persons may purchase additional Shares on the open market. However, the timing and amount of such purchases will depend upon a variety of factors, including, without limitation, current and anticipated future trading prices, the financial condition, results of operations and prospects of the Issuer, alternative investment opportunities, general economic, financial market and industry conditions and other factors that the Reporting Persons may deem material to their investment decision. Notwithstanding the foregoing, the Reporting Persons may decide not to make additional purchases or may seek to sell Shares depending on general economic and/or market conditions.
The purpose of the acquisition of the Shares of the Issuer was for investment, and the acquisition of the Shares of the Issuer was made in the ordinary course of business and was not made for the purpose of acquiring control of the Issuer.
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Also, consistent with the investment purpose, the Reporting Persons may engage in communications with one or more shareholders of the Issuer, one or more officers of the Issuer and/or one or more members of the board of directors of the Issuer and/or one or more representatives or regulators of the Issuer regarding the Issuer, including, but not limited to, its operations. The Reporting Persons may discuss ideas that, if effected, may result in any of the following: the acquisition by persons of additional Shares of the Issuer, an extraordinary corporate transaction involving the Issuer and/or changes in the board of directors or management of the Issuer. The purchase of Shares has been previously reported by the Reporting Persons on Form 3s and Form 4s filed with the Securities and Exchange Commission.
Except to the extent the foregoing may be deemed a plan or proposal, the Reporting Persons have no plans or proposals which relate to, or could result in, any of the matters referred to in paragraphs (a) through (j), inclusive, of the instructions to Item 4 of the Schedule 13D. The Reporting Persons may, at any time and from time to time, review or reconsider their position and/or change their purpose and/or formulate plans or proposals with respect thereto.
| Item 5. | Interest in Securities of the Issuer |
(a) As of August 16, 2016, (i) Highland Capital may be deemed to beneficially own 50,150.45 Shares, which represents approximately 19.6% of the outstanding Shares; (ii) James D. Dondero may be deemed to beneficially own 195,800.2 Shares, which represents approximately 74.6% of the outstanding Shares; and (iii) Nancy Marie Dondero, in her capacity of trustee of the Trust, may be deemed to beneficially own 140,562.25 Shares, which represents approximately 54.9% of the outstanding Shares. James D. Dondero has the right to acquire beneficial ownership of the 140,562.25 Shares owned by the Trust.
(b)
| Name of Reporting Person |
Sole Voting Power |
Shared Voting Power |
Sole Dispositive Power |
Shared Dispositive Power |
||||||||||||
| Highland Capital Management, L.P.1 |
50,150.45 | 0 | 50,150.45 | 0 | ||||||||||||
| James D. Dondero2 |
0 | 195,800.2 | 0 | 195,800.2 | ||||||||||||
| Nancy Marie Dondero3 |
140,562.25 | 0 | 140,562.25 | 0 | ||||||||||||
(c) Annex A attached hereto lists all transactions in the Shares during the past sixty (60) days by the Reporting Persons. The transactions in the Shares were effected in the open market.
| 1 | These Shares are held directly by Highland Capital. Mr. Dondero is the President and the director of Strand, the general partner of Highland Capital, and may be deemed to be an indirect beneficial owner of the Shares held by Highland Capital. Mr. Dondero disclaims beneficial ownership of such Shares. |
| 2 | Includes Shares held by Mr. Dondero indirectly through (i) Highland Capital and (ii) NexPoint. Also includes Shares that Mr. Dondero has the right to acquire beneficial ownership of that are held by the Trust, for which he does not serve as trustee. Mr. Dondero is the President and the director of Strand, the general partner of Highland Capital, and controls NexPoint GP, the general partner of NexPoint, and may be deemed to be an indirect beneficial owner of the Shares held by Highland Capital and NexPoint. Mr. Dondero disclaims beneficial ownership of such Shares. |
| 3 | Includes Shares that Ms. Dondero may be deemed to beneficially own as the trustee of the Trust. Ms. Dondero is the sister of Mr. Dondero. Ms. Dondero and Mr. Dondero disclaim beneficial ownership of such Shares. |
Page 7 of 9
(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 Shares.
(e) Not applicable.
| Item 6. | Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer |
The responses to Item 4 are incorporated herein by reference.
Other than as described herein, there are no contracts, arrangements, understandings or relationships among the Reporting Persons, or between the Reporting Persons and any other person, with respect to the securities of the Issuer.
| Item 7. | Material to be Filed as Exhibits |
Exhibit 99.1 Joint Filing Agreement by and among the Reporting Persons.
Page 8 of 9
After reasonable inquiry and to the best of their knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.
Dated: August 17, 2016
| HIGHLAND CAPITAL MANAGEMENT, L.P. | ||||
| By: | Strand Advisors, Inc., its general partner | |||
| By: | /s/ James D. Dondero | |||
| Name: James D. Dondero | ||||
| Title: President | ||||
| /s/ James D. Dondero | ||||
| James D. Dondero | ||||
| /s/ Nancy Marie Dondero |
| Nancy Marie Dondero |
Page 9 of 9
ANNEX A
TRANSACTIONS
The following table sets forth all transactions with respect to the Shares effected in the last sixty days by the Reporting Person on behalf of the Reporting Person in respect of the Shares, inclusive of any transactions effected through 4:00 p.m., New York City time, on August 16, 2016.
| Date |
Effected By | Purchase/Sale | Quantity | Price | ||||||||||
| 7/12/2016 |
Highland Capital | Open Market Purchase | 50,150.45 | $ | 19.94 | |||||||||
| 8/3/2016 |
Trust | Open Market Purchase | 140,562.25 | $ | 19.92 | |||||||||
EXHIBIT 99.1
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(k) under the Securities Exchange Act of 1934, as amended, the undersigned agree to the joint filing on behalf of each of them of a Statement on Schedule 13D (including any and all amendments thereto) with respect to the Class Z Shares of Beneficial Interest of NexPoint Real Estate Strategies Fund, and further agree that this Joint Filing Agreement shall be included as an Exhibit to such joint filings.
The undersigned further agree that each party hereto is responsible for the timely filing of such Statement on Schedule 13D and any amendments thereto, and for the accuracy and completeness of the information concerning such party contained therein; provided, however, that no party is responsible for the accuracy or completeness of the information concerning any other party, unless such party knows or has reason to believe that such information is inaccurate.
This Joint Filing Agreement may be signed in counterparts with the same effect as if the signature on each counterpart were upon the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of August 17, 2016.
| HIGHLAND CAPITAL MANAGEMENT, L.P. | ||||
| By: | Strand Advisors, Inc., its general partner | |||
| By: | /s/ James D. Dondero | |||
| Name: James D. Dondero | ||||
| Title: President | ||||
| /s/ James D. Dondero | ||||
| James D. Dondero | ||||
| /s/ Nancy Marie Dondero |
| Nancy Marie Dondero |