Highland Opportunities and Income Fund · NYSE:HFRO
Highland Opportunities and Income Fund — Q1 2026 Earnings Presentation
31 slides from Highland Opportunities and Income Fund's earnings presentation, June 2026
Slide 1: Q1 2026 Fund Overview & Investor Update
Q1 2026 FUND OVERVIEW & INVESTOR UPDATE Highland Opportunities and Income Fund
Slide 2: HFRO Snapshot
F U N D O V E RVI E W & U P A T E S 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 OB
Slide 3: Closing NAV Discount: New & Recent Initiatives
F U N D O V E RVI E W & U P A T E S Closing NAV Discount New & Recent Initiatives The Adviser remains focused on identifying and pursuing opportunities to narrow the Fund’s discount, having introduced several programs over recent quarters. This has continued with new initiatives announced since the
Slide 4: New & Recent Initiatives (Cont'd)
F U N D O V E RVI E W & U P A T E S Closing NAV Discount New & Recent Initiatives (Cont’d) Reinforced Shareholder Expanded Portfolio Enhanced Shareholder Alignment Management Team Communications OVERVIEW OVERVIEW OVERVIEW Increased NexPoint and affiliate Brad Heiss added as a portfolio Continu
Slide 5: Closing NAV Discount: Ongoing Focus Areas
F U N D O V E RVI E W & U P A T E S Closing NAV Discount Ongoing Focus Areas The Adviser’s work to address the discount includes pursuing several ongoing initiatives with support of the Board, all of which remain priorities today. Board Engagement Transparency & Portfolio Performance & Communication
Slide 6: Portfolio Composition
F U N D O V E RVI E W & U P A T E S Asset Class Portfolio Composition CLOs Equity Loans Real Estate • As of March 31, 2026, the Fund’s assets totaled $872MM. • The Fund’s long assets were approximately 72.9% 72.9% 71.4% 71.0% 73.1% commercial real estate (debt & equity) and 27.1% non-real estate rel
Slide 7: HFRO Target Asset Allocation
F U N D O V E RVI E W & U P A T E S HFRO Target Asset Allocation The Fund will look to monetize positions in its current portfolio on an opportunistic basis over time to support gradual transition to its target allocation. Current Portfolio Target Asset Allocation Commercial Bonds Equity (Preferred,
Slide 8: Recent Update: TRQ Plano LLC
F U N D O V E RVI E W & U P A T E S ORIGINAL INVESTMENT Recent Update: Invested in 2018 with equity position; property faced major challenges from Covid office-market downturn TRQ Plano LLC Pivoted plans and restructured investment in 2023 to allow for necessary development activity to realize 2
Slide 9: Realized Value Affirms Position Mark
F U N D O V E RVI E W & U P A T E S Realized Value Affirms Position Mark • The Fund and its subsidiaries received $111.5MM promissory notes in 2023 as consideration for its original equity position • The chart below presents the Fund’s semi-annual marks since December 2023; mark changes over time re
Slide 10: HFRO Discount to NAV
F U N D O V E RVI E W & U P A T E S HFRO Discount to NAV Fund discount to NAV is disconnected from market fundamentals. $872MM $245MM $627MM $316MM MidWave, $26.7 NXDT Hospitality, $36.5 Sapience, $42.2 CCS Medical, $42.1 Life Settlements, $61.0 Top 10 Positions ResMark, $61.3 NREF, $68.5 Discount o
Slide 11: HFRO Discount to NAV: Opportunities
F U N D O V E RVI E W & U P A T E S HFRO Discount to NAV Current discount represents opportunity as Fund realizes value of top holdings. $11.31/sh Opportunities at Current Discount HFRO expects investment monetizations in other top positions over next 1-2 years, providing catalysts for the Fund $5
Slide 12: Top Positions Snapshot
HIGHLAND OPPORTUNITIES AND INCOME FUND Top 10 Positions Snapshot 12
Slide 13: Top Positions (as of 3/31/26)
T O P P O S IT I O N S S N A P S H O T Top 10 Positions (as of 3/31/26) INVESTMENT % PORTFOLIO THESIS KEY HIGHLIGHTS NexPoint 14.1% Core SFR portfolio with potential upside Executing on opportunity to optimize portfolio, Homes Trust from NOI growth and home price and accretively disposing of lower p
Slide 14: Top Positions (as of 3/31/26) (cont'd)
T O P P O S IT I O N S S N A P S H O T Top 10 Positions (as of 3/31/26) (cont’d) INVESTMENT % PORTFOLIO THESIS KEY HIGHLIGHTS Life 7.1% Life Settlements is one of the remaining Portfolio consists of 10 policies with a current Settlement asset classes that provides a secured market value of $43.8MM,
Slide 15: Top Positions
HIGHLAND OPPORTUNITIES AND INCOME FUND Top Positions 15
Slide 16: NexPoint Homes Trust
T O P P O S IT I O N D E T A IL 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)
Slide 17: TRQ Plano LLC
T O P P O S IT I O N D E T A IL TRQ Plano LLC TRQ Plano LLC, formerly EDS Legacy Partners, owns the former Electronic Data Systems (EDS) campus, a 91-acre site located at 5400 Legacy Drive in Plano, Texas INVESTMENT RATIONALE & OBJECTIVE • Asset was purchased in 2018; however, pivoted plans followin
Slide 18: NexPoint Storage Partners
T O P P O S IT I O N D E T A IL 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 portfo
Slide 19: NexPoint Real Estate Finance
T O P P O S IT I O N D E T A IL 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 • Investme
Slide 20: ResMark Venture
T O P P O S IT I O N D E T A IL 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
Slide 21: Life Settlement Portfolio
T O P P O S IT I O N D E T A IL Life Settlement Portfolio Actively managed life settlement portfolio providing unique access to investment grade assets generating double digit returns. INVESTMENT RATIONALE & OBJECTIVE • A Life Settlement investment is a life insurance policy where the original polic
Slide 22: CCS Medical
T O P P O S IT I O N D E T A IL 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 contin
Slide 23: Sapience Therapeutics
T O P P O S IT I O N D E T A IL 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 purpo
Slide 24: NXDT Hospitality Holdco
T O P P O S IT I O N D E T A IL NXDT Hospitality Holdco The subsidiary of an externally advised, publicly traded, diversified REIT focused on the acquisition, development, and management of opportunistic and value-add investments throughout the United States INVESTMENT RATIONALE & OBJECTIVE • HFRO o
Slide 25: MidWave Wireless, Inc.
T O P P O S IT I O N D E T A IL 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,
Slide 26: Appendix
HIGHLAND OPPORTUNITIES AND INCOME FUND Appendix 26
Slide 27: Selected Financial Highlights
A P P E ND I X Selected Financial Highlights Quarter Ended March 31, 2025 Balance Sheet Highlights 1Q2026 4Q2025 3Q2025 2Q2025 1Q2025 4Q2024 3Q2024 2Q2024 Investment Portfolio at Fair Value $825 $828 $840 $839 $877 $897 $963 $965 Total Debt Outstanding $245 $245 $245 $239 $240 $140 $140 $140 Total N
Slide 28: NexPoint's Leading Alternative Investment Platform
A P P E ND I X NexPoint’s Leading Alternative Investment Platform Firm Overview AUM $16.6 billion1 Focus Alternative investments Employees 128 total employees; 38 Investment professionals2 Offices Headquartered in Dallas Texas, with employees across the U.S. DELAWARE FIXED INCOME DIVERSIFIED PUBLIC
Slide 29: Fund Management
A P P E ND I X 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 c
Slide 30: Disclosures
A P P E ND I X 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 ma
Slide 31: Contact Information
Contact Information SALES DESK WEBSITE (833) 697-7253 nexpointassetmgmt.com NVESTOR SUPPORT ADDRESS IR@nexpoint.com 300 Crescent Court, Suite 700 Dallas, TX 75201
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