Highland Opportunities and Income Fund · NYSE:HFRO
Highland Opportunities and Income Fund — Q1 2025 Earnings Presentation
26 slides from Highland Opportunities and Income Fund's earnings presentation, June 2025
Slide 1: Q1 2025 Investor Presentation: Highland Opportunities and Income Fund
Q1 2025 INVESTOR PRESENTATION Highland Opportunities and Income Fund
Slide 2: HFRO Snapshot
HIGHLAND OPPORTUNITIES AND INCOME FUND HFRO Snapshot Highland Opportunities and Income Fund (HFRO) is a Overview closed-end, non-diversified management investment company focused on delivering attractive returns Ticker HFRO through capital appreciation and interest income. CUSIP 43010E404 INVESTMENT
Slide 3: HFRO Investment Merits
HIGHLAND OPPORTUNITIES AND INCOME FUND HFRO Investment Merits Attractive real estate portfolio Core real estate holdings poised Permanent capital and a solid comprised of debt and equity to unlock value as interest rates balance sheet with no leverage or positions with capital decline in the coming
Slide 4: Closing NAV Discount
HIGHLAND OPPORTUNITIES AND INCOME FUND Closing NAV Discount Board Engagement OVERVIEW: ▪ Discount to NAV has continuously been key focus of Board ▪ Board engagement with Adviser is ongoing to review existing initiatives and evaluate additional opportunities to reduce the discount HIGHLIGHTS/RECENT A
Slide 5: Portfolio Composition
HIGHLAND OPPORTUNITIES AND Asset Class INCOME FUND (% of Long Assets) Portfolio Composition 100.0% 80.0% • As of March 31, 2025, the Fund’s assets totaled $928 million. 60.0% • The Fund’s long assets were approximately 71.9% commercial real estate (debt & equity) and 28.1% 40.0% non-real estate rela
Slide 6: Three Core Themes in Current Portfolio
HIGHLAND OPPORTUNITIES AND INCOME FUND Three Core Themes in Current Portfolio Thesis One: Opportunity in RESIDENTIAL RENTAL MARKET (Single Family Rentals (SFR) and multifamily) in face of housing affordability challenges and migration out of large coastal metros • Investments: NexPoint Homes – ResMa
Slide 7: Top Holdings Snapshot
HIGHLAND OPPORTUNITIES AND INCOME FUND Top 10 Holdings Snapshot 7
Slide 8: Top 10 Holdings (as of 3/31)
HIGHLAND OPPORTUNITIES AND INCOME FUND Top 10 Holdings (as of 3/31) INVESTMENT % PORTFOLIO THESIS KEY HIGHLIGHTS NexPoint 12.3% Core SFR portfolio with potential upside Executing on opportunity to optimize portfolio, Homes Trust from NOI growth and home price including upgrading property manager, an
Slide 9: Top 10 Holdings (as of 3/31) (cont'd)
HIGHLAND OPPORTUNITIES AND INCOME FUND Top 10 Holdings (as of 3/31) (cont’d) INVESTMENT % PORTFOLIO THESIS KEY HIGHLIGHTS CCS Medical 7.0% Positioned to capture value from Focused on the progress of the 2024 growth strategy of integrating chronic care initiatives, which include several accretive man
Slide 10: Top Holdings
HIGHLAND OPPORTUNITIES AND INCOME FUND Top Holdings 10
Slide 11: NexPoint Homes Trust
TOP HOLDINGS DETAIL NexPoint Homes Trust A private REIT focused on acquiring, building, and operating single-family rental homes mostly in the Sunbelt states INVESTMENT RATIONALE & OBJECTIVE • Fills a significant growing need for expanded access to affordable single- family rental (SFR) properties d
Slide 12: NexPoint Storage Partners
TOP HOLDINGS DETAIL NexPoint Storage Partners Invests in newly built, multi-story, climate-controlled, Class-A self-storage facilities—all managed by Extra Space Storage (NYSE: EXR)—in dense and growing markets in the U.S. INVESTMENT RATIONALE & OBJECTIVE • A best-in-class storage portfolio that is
Slide 13: EDS Legacy Partners
TOP HOLDINGS DETAIL EDS Legacy Partners Owns the former Electronic Data Systems (EDS) campus located at 5400 Legacy Drive in Plano, Texas, which is situated on 91 acres and includes ~1.6 million square feet of space, being redeveloped into a life sciences and medical complex INVESTMENT RATIONALE & O
Slide 14: NexPoint Real Estate Finance
TOP HOLDINGS DETAIL NexPoint Real Estate Finance An externally managed commercial mortgage REIT listed on NYSE with a focus on investments in multifamily, single-family rental, self-storage, life science, hospitality, office, and marina sectors INVESTMENT RATIONALE & OBJECTIVE • Investment in common
Slide 15: ResMark Venture
TOP HOLDINGS DETAIL ResMark Venture A JV with a multibillion-dollar international pension fund managed by an affiliate of The Resmark Companies invested in mostly residential development projects focused on single-family build-to-rent investments in suburban markets INVESTMENT RATIONALE & OBJECTIVE
Slide 16: CCS Medical
TOP HOLDINGS DETAIL CCS Medical A leading national distributor of home medical equipment and supplies for patients with chronic conditions, with a focus on diabetes management INVESTMENT RATIONALE & OBJECTIVE • CCS is at the forefront of the rapidly growing distribution market for continuous glucose
Slide 17: Sapience Therapeutics
TOP HOLDINGS DETAIL Sapience Therapeutics A privately held, clinical-stage biotechnology company focused on discovering and developing peptide therapeutics to address oncogenic and immune dysregulation that drive cancer INVESTMENT RATIONALE & OBJECTIVE • With two platforms that are purpose-built to
Slide 18: NexPoint Hospitality Trust
TOP HOLDINGS DETAIL NexPoint Hospitality Trust A publicly traded REIT listed on the TSX Venture Exchange (NHT.U) focused on owning and operating well-located hospitality properties in the U.S. that offer a high current yield INVESTMENT RATIONALE & OBJECTIVE • HFRO owns convertible debt of NHT • NHT
Slide 19: IQHQ
TOP HOLDINGS DETAIL IQHQ A private real estate investment trust (REIT) that acquires, develops, redevelops, and manages life-sciences real estate across several core markets INVESTMENT RATIONALE & OBJECTIVE • Pursues large format, iconic development and selective re-development opportunities within
Slide 20: MidWave Wireless, Inc.
TOP HOLDINGS DETAIL MidWave Wireless, Inc. MidWave Wireless, Inc., formerly TerreStar Corporation, is one of the largest independent wireless spectrum license holders in the U.S. INVESTMENT RATIONALE & OBJECTIVE • MidWave’s mid-band spectrum investments cover every major domestic market, representin
Slide 21: Appendix
HIGHLAND OPPORTUNITIES AND INCOME FUND Appendix 21
Slide 22: Selected Financial Highlights
APPENDIX Selected Financial Highlights Quarter Ended March 31, 2025 Balance Sheet Highlights 1Q2025 4Q2024 3Q2024 2Q2024 1Q 2024 4Q 2023 3Q 2023 2Q 2023 1Q 2023 Investment Portfolio at Fair Value $877 $897 $963 $965 $988 $1,008 $1,046 $1,035 $1,070 Total Debt Outstanding $240 $140 $140 $140 $140 $16
Slide 23: NexPoint's Leading Alternative Investment Platform
APPENDIX NexPoint’s Leading Alternative Investment Platform Firm Overview AUM $16.9 billion1 Focus Alternative investments Employees 106 total employees; 27 investment professionals2 Offices Headquartered in Dallas Texas, with employees across the US DELAWARE FIXED INCOME DIVERSIFIED PUBLIC REAL PRI
Slide 24: Fund Management
APPENDIX Fund Management Jim Dondero, CFA Co-Founder & President • Has over 30 years of experience investing across the alternative landscape. Founded NexPoint in 2012 to bring alternative strategies to retail channels. • Established a number of integrated businesses to manage investments in credit,
Slide 25: Disclosures
APPENDIX Disclosures The performance data quoted here represents past performance and is no guarantee of future results. Investment returns and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be l
Slide 26: Visit Our Website / Contact
ADDRESS VISIT OUR WEBSITE 300 Crescent Court www.nexpointassetmgmt.com Suite 700 Dallas, TX 75201 CONTACT SALES (833) 697-7253 NVESTOR SUPPORT IR@nexpoint.com
Highland Opportunities and Income Fund — Q1 2025 Earnings Presentation on 6ix