Clark Street Value: “NXDT Continues to Be One of My Favorite Ideas”

Clark Street Value, an investment management firm, published its fourth-quarter 2021 investor letter – a copy of which can be seen here. An annual portfolio return of 74.99% was recorded by the fund for the year 2021, versus 28.71% for the S&P 500, and an IRR since the inception of 29.12%.  over the same period. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

Clark Street Value, in its Q4 2021 investor letter, mentioned NexPoint Strategic Opportunities Fund (NYSE: NXDT) and discussed its stance on the firm. NexPoint Strategic Opportunities Fund is a Dallas, Texas-based closed-end investment company with a $530.1 million market capitalization. The stock closed at $14.33 per share on January 12, 2022.

Here is what Clark Street Value has to say about NexPoint Strategic Opportunities Fund in its Q4 2021 investor letter:

“NexPoint Diversified Real Estate Trust (NXDT) is unfortunately still in the process of converting from a closed end fund to a REIT, the process has dragged on a bit longer than expected, but the backdrop for NXDT’s assets continues to improve in the meantime and NAV continues to march slightly higher (~$23, trades for roughly 60% of NAV).  The thesis remains mostly the same, this will starting reporting as a REIT, be eligible for index inclusion (including broad indices, BDCs and CEFs are generally excluded from market indices since they’re considered funds), and start attracting a REIT investor base and multiple.  On the negative side, this is another manager with a poor reputation, and potentially has some governance issues with NXDT owning other NexPoint affiliates and some fee double dipping.  NXDT continues to be one of my favorite ideas.”

youssef-abdelwahab-qyzo7TDSVQs-unsplash

Our calculations show that NexPoint Strategic Opportunities Fund (NYSE: NXDT) failed to obtain a mark in our list of the 30 Most Popular Stocks Among Hedge Funds. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page. 

Disclosure: None. This article is originally published at Insider Monkey.