Priority Income Fund: Liquidity Issues and Declining NAV
The White Law Group continues to investigate potential securities fraud claims involving broker-dealers who may have improperly recommended Priority Income Fund to investors.
Priority Income Fund is a speculative, high-risk, illiquid, closed-end mutual fund and is not suitable for every investor.
April 2025 Update: Limited Share Repurchase and Potential Listing
In April 2025, the fund completed a quarterly share repurchase offer, buying back approximately 60% of shares tendered by each shareholder at $7.17 per share. The offer was oversubscribed, with approximately 4% of total shares tendered, even though only 2.5% were eligible for repurchase under the fund’s policy.
Shortly after, the fund announced plans to pursue a listing of its common shares on a national securities exchange to increase shareholder liquidity. Key points:
-
Common share offering suspended as of May 1, 2025
-
Lucid Capital Markets LLC engaged as an adviser
-
Listing remains subject to board approval and market conditions
Ongoing Concerns: Late Financial Filings and NAV Drop
On August 29, 2023, Priority Income Fund reported it would be unable to timely file its annual report for the fiscal year ended June 30, 2023. The company noted that both it and its independent public accounting firm required “additional time to complete the documentation of the audit of the company’s financial statements.” Priority anticipated filing within the 15-day extension period.
Complex, High-Risk Investment Strategy
Priority Income Fund invests at least 80% of its total assets in securitized pools of senior secured loans and/or invests in senior secured loans in the primary or secondary markets, according to the fund’s prospectus. Its investment strategy also includes:
-
Investments in securities issued by foreign entities
-
Equity and junior tranches of collateralized loan obligations (CLOs), which are riskier than direct investments in underlying companies
CLOs generally hold no significant assets outside of the underlying senior secured loans.
Liquidity Issues and Risk Warnings
Last year, the company revised its liquidity strategy. It changed its position from pursuing a liquidity event upon completion of the offering to stating it “may, but is not obligated to,” pursue a liquidity event for shareholders.
The fund discloses multiple pages of risk factors, warning that:
-
There is no obligation to complete a liquidity event
-
Shares are not listed on any securities exchange
-
Liquidity is extremely limited
-
Distributions are not guaranteed
Declining Net Asset Value (NAV)
Priority Income Fund has experienced a continued decline in NAV since it was originally offered at $15.00 per share:
-
$12.64 per share as of November 30, 2021
-
$11.12 per share as of October 31, 2022
-
$7.17 per share as of April 30, 2025
As of September 16, 2022, there were 47,657,412 shares issued and outstanding. The company has periodically extended tender offers to buy back shares due to the lack of a public market.
About Priority Income Fund
Launched in 2013, Priority Income Fund focuses primarily on investments in collateralized loan obligation (CLO) securities. The fund reported over $900 million in total assets as of December 31, 2024.
Filing a Complaint Against Your Brokerage Firm
Brokerage firms must perform due diligence and ensure that any investment recommendation is suitable based on an investor’s:
-
Age
-
Financial situation
-
Risk tolerance
-
Investment experience
If your financial advisor failed to properly disclose risks or recommended unsuitable investments, you may have grounds for a FINRA arbitration claim to recover investment losses.
Free Consultation
If you are concerned about an investment in Priority Income Fund, call The White Law Group at 888-637-5510 for a free consultation with a securities attorney.
The White Law Group is a national securities fraud and investor protection law firm with offices in Chicago, Illinois, and Seattle, Washington.
Tags: Priority Income Fund Last modified: May 29, 2025
