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Interval funds are generally suitable only for investors who can bear the risks associated with the limited liquidity of the fund and should be viewed as a long-term investment. All investing involves risk, including loss of principal. There can be no assurance that any fund will meet its objectives.
This is neither an offer to sell nor a solicitation to purchase any security. Investors should consider the investment objectives, risks, charges and expenses of the CIM Real Assets & Credit Fund (“Fund”) carefully before investing. This and other information are contained in the Fund’s prospectus, which may be obtained by contacting your financial professional or visiting www.cimgroup.com. Please read the prospectus carefully before you invest.
Below is a summary of some of the principal risks of investing in the Fund. For a more complete discussion of the risks of investing in the Fund, see “Risks” in the Fund’s prospectus. Shareholders should consider carefully the following principal risks before investing in the Fund:
- Unlike shares of most closed-end funds, the Common Shares will not be listed on any securities exchange;
- Although the Fund intends to implement a quarterly share repurchase program, there is no guarantee that an investor will be able to sell all of the Common Shares that the investor desires to sell. The Fund should therefore be considered to offer only limited liquidity;
- The capital markets may experience periods of disruption and instability. Such market conditions may materially and adversely affect debt and equity capital markets, which may have a negative impact on the Fund’s business and operations;
- If a shareholder is able to sell its Common Shares, the shareholder likely will receive less than its purchase price and the then current NAV per Common Share;
- The Fund’s distributions may be funded from offering proceeds or borrowings, which may constitute a return of capital and reduce the amount of capital available to the Fund for investment. Although a return of capital will generally not be taxable to a shareholder, it would reduce the shareholder’s cost basis in the Common Shares and may result in higher capital gains taxes, or a lower capital loss, when Common Shares are sold. Any capital returned to shareholders through distributions will be distributed after payment of fees and expenses, as well as the sales load;
- The Fund is a newly organized, non-diversified, closed-end investment company with no operating history;
- The Fund will be exposed to the risks related to investments in real estate, including risks related to the performance of the real estate market;
- Because the Fund will concentrate its investments in the Real Estate industry, the Fund may experience more volatility and be exposed to greater risk than it would be if it held a more diversified portfolio;
- The Fund’s investments in CMBS are subject to all of the risks of the underlying mortgage loans, including interest rate risk;
- The Fund will primarily invest in real estate through its REIT Subsidiaries, which will be subject to regulatory requirements to qualify as a REIT. The failure of the Fund’s REIT Subsidiaries to qualify as REITs could have a negative impact on the Fund’s investment returns;
- The Fund’s investments in second lien loans and unsecured loans are lower in priority of payment to Senior Secured Loans, they are subject to the additional risk;
- The Fund’s investments in Broadly Syndicated Loans involve a number of significant risks;
- The Fund’s investments in distressed credit investments have significant risk of loss, and the Fund’s efforts to protect its dis-tressed credit investments may involve large costs and may not be successful;
- The Fund’s credit and credit related investments will generally be in below investment grade instruments commonly referred to as “junk” or high-yield instruments and are regarded as predominantly speculative with respect to the issuer’s capacity to pay interest and repay principal;
- The Fund’s credit and credit-related investments are subject to risk of covenant breach, which could jeopardize the borrow-er’s ability to meet its obligations under the debt or equity securities that the Fund holds.
- The Fund is exposed to risks associated with changes in interest rates through its credit and credit-related investments. If interest rates fall, the Fund may not be able to generate income, and if interest rates rise, the Fund may incur more costs in connection with its use of leverage;
- To qualify and remain eligible for the special tax treatment accorded to RICs and their shareholders under the Internal Reve-nue Code of 1986, as amended (the “Code”), the Fund must meet certain source-of-income, asset diversification and annual distribution requirements, and failure to do so could result in the loss of RIC status.
- Certain investments may be exposed to the credit risk of the counterparties with whom the Fund deals as a result of the Fund’s loan origination activities;
- The valuation of securities or instruments that lack a central trading place (such as fixed-income securities or instruments) may carry greater risk than those that trade on an exchange;
- The Fund has no fixed policy regarding portfolio maturity or duration. Holding long duration and long maturity investments will increase the Fund’s exposure to the credit and interest rate risks described above, including
- with respect to changes in interest rates through the Fund’s credit and credit-related investments as well as increased exposure to risk of loss;
- The Fund may be materially adversely affected by market, economic and political conditions globally and in the jurisdictions and sectors in which the Fund invests. Accordingly, the Fund should be considered a speculative investment that entails substantial risks, and a prospective investor should invest in the Fund only if they can sustain a complete loss of their investment.
CCO Capital, LLC, Member FINRA/SIPC, is the exclusive wholesale marketing agent for CIM Real Assets & Credit Fund. ALPS Distributors, Inc., (1290 Broadway, Suite 1000, Denver, CO 80203, Member FINRA) is the distributor of CIM Real Assets & Credit Fund. CCO Capital and ALPS Distributors, Inc are not affiliated.
ALPS Control Number: CIM000103