486BPOS: Harrison Street Infrastructure Fund Updates Prospectus

Harrison Street Infrastructure Income Fund, an interval fund, filed an updated prospectus detailing its investment strategy, financial performance, and operational changes, including a name change and new service providers.

Summary

• The Fund, formerly Versus Capital Infrastructure Income Fund, officially changed its name to Harrison Street Infrastructure Income Fund, effective July 29, 2025.
• The Fund's investment adviser, Versus Capital Advisors LLC, also rebranded to Harrison Street Private Wealth LLC, effective July 28, 2025.
• The primary investment objective is consistent current income, with a secondary objective of capital preservation, achieved by allocating at least 80% of net assets to income-oriented infrastructure investments.
• For the fiscal year ended March 31, 2025, the Fund reported a Net Asset Value (NAV) of $10.10, up from $10.00 at the beginning of the year, and a total return of 9.80%.
• Net investment income per share was $0.93, with net realized and unrealized gains of $0.02, totaling $0.95 from investment operations.
• Distributions to shareholders totaled $0.85 per share, comprising $0.83 from net investment income and net realized gains, and $0.02 from return of capital.
• Total net assets at the end of the fiscal year (March 31, 2025) were $201.768 million.
• The Fund's Total Annual Fund Operating Expenses are estimated at 3.55% of average daily NAV, based on $234 million in net assets as of June 30, 2025.
• The Adviser has contractually agreed to reduce its Investment Management Fee and/or reimburse expenses to cap Total Annual Fund Expenses at 1.95% until December 31, 2025, excluding certain fees like Acquired Fund Fees and Expenses (AFFE) and interest payments.
• The Fund utilizes leverage through a secured credit facility with Nomura Corporate Funding Americas, LLC, permitting borrowings up to $75 million at an interest rate of SOFR plus a 2.75% applicable margin.
• UMB Fund Services, Inc. and UMB Bank, n.a. are expected to replace BNY Mellon Investment Servicing (US) Inc. and The Bank of New York Mellon for transfer agency, administrative, and accounting services around September 30, 2025.
• The sub-advisory agreement with Lazard Asset Management, LLC will terminate on October 31, 2025, and will not be renewed.

Sentiment

Score: 7

Explanation: The Fund demonstrates solid financial performance with a 9.80% total return and strong net investment income. The strategic focus on infrastructure assets and the Adviser's expense cap are positive. However, the inherent illiquidity, high expense ratio (even with waivers), and the speculative nature of leverage and private investments introduce significant risks that temper overall sentiment. Management changes and service provider transitions also add a layer of uncertainty.

Positives

• The Fund achieved a strong total return of 9.80% based on Net Asset Value for the fiscal year ended March 31, 2025.
• Net investment income per share was robust at $0.93, contributing significantly to the total return.
• The Adviser has a contractual agreement to cap Total Annual Fund Operating Expenses at 1.95% until December 31, 2025, which helps manage costs for shareholders.
• The Fund's strategy focuses on income-oriented infrastructure assets, which are characterized by stable and predictable income, inelastic demand, monopolistic characteristics, and low default probability.
• The Fund has a secured credit facility of up to $75 million, providing flexibility for investment and liquidity management.

Negatives

• The Fund is a non-diversified, closed-end interval fund, meaning shares are illiquid and not listed on any securities exchange, with limited quarterly repurchase offers (5%-25% of outstanding shares).
• The Total Annual Fund Operating Expenses are high at 3.55% before the Adviser's voluntary waiver, and 1.95% after the waiver (excluding certain fees), which can significantly erode returns.
• The Fund's use of leverage is a speculative technique that increases risk and cost, potentially magnifying losses in adverse market conditions.
• Investing in Private Funds and Subsidiaries results in two layers of fees and expenses, at both the Fund and underlying fund levels, which can be substantial.
• The sub-advisory agreement with Lazard Asset Management, LLC is terminating, which could introduce changes in portfolio management for a portion of the Fund's assets.
• The Fund has a limited operating history, making it difficult for prospective investors to fully evaluate past performance and future returns.

Risks

• **Infrastructure-Related Companies Risk**: Exposure to economic conditions, supply/demand, interest rates, environmental laws, disruptive weather, energy prices, and regulatory changes affecting infrastructure assets.
• **Debt Securities and Related Investments Risk**: Investments in unrated or below investment grade debt securities (junk bonds) carry higher risks of loss of income and principal, and are subject to greater liquidity risk.
• **Loans and Loan-Related Investments Risk**: Collateral may decline in value or become illiquid, less reliable information available, increased defaults with rising interest rates, and potential for limited enforcement rights in loan participations/assignments.
• **Second Liens and Subordinated Loans Risk**: These loans are lower in repayment priority and involve a higher degree of overall risk than senior loans, with limited control over collateral actions due to intercreditor agreements.
• **Unitranche Loans Risk**: Participation in different tranches (first-out vs. last-out) carries varying levels of risk and priority in payments.
• **Liquidity Risk**: A substantial portion of assets are illiquid, with no secondary market for shares, and quarterly repurchase offers may be suspended or oversubscribed, leading to inability to sell shares when desired.
• **Leverage Risk**: Increased volatility of NAV, reduced returns due to interest rate fluctuations, magnified losses in declining markets, increased operating costs, and potential for dividends to fall if leverage costs rise.
• **Interval Fund Risk**: Limited liquidity through quarterly repurchase offers, no public trading, and substantial restrictions on transferability.
• **Unsecured Loans Risk**: Loans without collateral expose the Fund to higher risk of loss in default, with unsecured claims ranking equally with unpaid portions of secured creditors' claims.
• **Valuation Risk**: Difficulty in ascertaining the value of private investments, reliance on subjective appraisals, potential for inaccurate valuations, and adjustments not affecting prior purchase/repurchase prices.
• **Credit Risk**: Rapid changes in credit quality, default of a single holding causing significant NAV deterioration, and potential delays in realizing collateral benefits in bankruptcy.
• **Loan Origination Risk**: Dependence on availability of opportunities, interest rate volatility, financing availability, competition, and potential for being forced to hold originated loans for indeterminate periods.
• **Access Risk**: Reliance on Arrangers for investment opportunities; inability to develop or maintain relationships could hinder investment strategy implementation and capital deployment.
• **High Yield Securities Risk**: Predominantly speculative, greater risks of loss, higher price fluctuations, and less liquid secondary markets.
• **Asset-Backed Securities Risk**: Subject to interest rate, prepayment, credit, default, and structural risks (e.g., early amortization triggers).
• **Derivatives Risk**: Exposure to risks different from traditional investments, high complexity, counterparty default risk, and increased leverage, market, liquidity, and regulatory risks.
• **Environmental and Unforeseen Liabilities Risk**: Substantial risk of loss from environmental problems (e.g., climate change effects), changes in environmental laws, and undisclosed liabilities associated with real assets.
• **Inflation/Deflation Risk**: Inflation decreasing asset/income value, or deflation adversely affecting creditworthiness and increasing default likelihood.
• **Interest Rate Risk**: Rising interest rates can cause decline in value of fixed income investments, increased volatility, and need to liquidate portfolio investments at disadvantageous prices to meet repurchases.
• **Reliance on Key Persons Risk**: Loss of services of executive officers and portfolio managers could materially adversely impact the Fund.
• **Fund Capitalization Risk**: Inability to raise sufficient capital may adversely affect diversification, financial condition, liquidity, and compliance with regulatory/tax requirements.
• **Business and Regulatory Risks**: Legal, tax, and regulatory changes (including AI Technologies regulation), economic conditions, and market volatility can adversely affect the Fund.
• **Diversification Risk**: As a non-diversified fund, greater risk with respect to a limited number of issuers.
• **Private Funds Risk**: Investments in Private Funds are not subject to Investment Company Act protections, limited transparency, potential for fraud or strategy deviations, and two layers of fees.
• **Rule 144A Securities Risk**: May be deemed illiquid, even if an active dealer market exists.
• **Privately Placed Securities Risk**: Subject to liquidity and valuation risks, limited market, less information available, and potential for time-consuming negotiation and legal expenses for disposal.
• **Preferred Securities Risk**: More susceptible to equity investment risks, potential for deferred distributions, less liquid markets, and limited shareholder rights.
• **Equity Securities Risk**: Prices fluctuate based on company financial condition, market/economic conditions, and industry-specific factors.
• **Municipal Securities Risk**: Value affected by credit quality changes, financial condition of issuer, political/economic developments, and liquidity depends on dealer willingness to make a market.
• **Distressed Debt Risk**: Investments are speculative, substantial risk of default, potential for entire investment loss, and difficulty in obtaining true financial condition information.
• **Active Management Risk**: Performance depends on Adviser's judgment, ability to choose successful investments/sub-advisers/managers, and conflicts of interest due to other client accounts.
• **Fees and Expense Risk**: Two layers of fees (Fund and Private Fund/Subsidiary level) and sourcing fees from Arrangers can be substantial.
• **Payment in Kind Interest Risk**: Exposure to non-cash income, higher credit risk, unreliable valuations, increased loan-to-value ratio, and potential for borrower default at maturity.
• **Floating and Variable Rate Obligations Risk**: Lag between interest rate benchmark changes and reset times, and interest rate floor features can affect returns.
• **Market Capitalization Risk**: Investments in small-cap and micro-cap companies involve higher risks, greater price volatility, less liquidity, and limited public information.
• **Subsidiary Risk**: Subsidiaries are not registered under the Investment Company Act, exposing the Fund to risks without full investor protections.
• **Joint Venture Risk**: Sharing control with third-party partners, potential for disputes, and unfunded commitments.
• **Foreign Investing Risk**: Economic, political, regulatory, and social risks, foreign ownership restrictions, currency fluctuations, and less stringent accounting/reporting standards.
• **Cybersecurity Risk**: Operational and information security risks, potential for financial losses, disruptions, regulatory fines, and reputational damage, exacerbated by AI Technologies.
• **Emerging Markets Risk**: Greater risks of expropriation, confiscatory taxation, political/economic instability, small securities markets, and less regulation.
• **Concentration Risk**: Concentrating investments in infrastructure-related industries increases risk and volatility.
• **Direct Lending Risk**: Exposure to borrower default, liquidity/interest rate risk, and responsibility for debt servicing expenses as a sole lender.
• **Issuer Risk**: Value decline due to issuer-specific reasons (management performance, financial leverage, demand reduction), and higher expenses for distressed debt.
• **Tax Risks Fund**: Difficulty in satisfying RIC diversification and gross income tests due to Private Fund transparency issues, potential for corporate-level taxation, and excise taxes on undistributed amounts.
• **Reference Benchmark Risk**: Transition from LIBOR to SOFR introduces uncertainty regarding performance, volatility, and potential for discontinuation or alteration of benchmarks.
• **Market Disruption, Health Crises, Terrorism and Geopolitical Risks**: Investments negatively affected by broad market environment, war, terrorism, sanctions, tariffs, global health crises (e.g., COVID-19), and financial institution failures.

Future Outlook

The Fund intends to continue its strategy of seeking consistent current income and capital preservation through income-oriented infrastructure investments. It plans to maintain its status as a Regulated Investment Company (RIC) and distribute income and gains to shareholders. The Adviser will continue to opportunistically utilize leverage and adjust its dealings with Arrangers based on market conditions. The transition of administrative and transfer agency services to UMB is expected to be completed around September 30, 2025. The sub-advisory relationship with Lazard will conclude by October 31, 2025.

Management Comments

• The Fund's primary investment objective is to seek consistent current income, and the Fund's secondary objective is capital preservation.
• The Fund intends to elect and to be treated as a regulated investment company under the Internal Revenue Code of 1986, as amended (the Code).
• The Fund does not intend to list its Shares on any securities exchange during the offering period, and the Fund does not currently expect a secondary market in the Shares to develop. Thus, an investment in the Fund may not be suitable for investors who may need the money they invest in a specified timeframe.
• You should not expect to be able to sell your Shares other than through the Fund's repurchase offers, regardless of how the Fund performs. If you are able to sell your Shares, other than through the Fund's repurchase offers, you will likely receive less than your purchase price.
• Even though the Fund will offer to repurchase Shares on a quarterly basis, you should consider Shares of the Fund to be an illiquid investment. There is no guarantee that you will be able to sell your Shares at any given time or in the quantity that you desire. The Shares are appropriate only for those investors who can tolerate risk and do not require a liquid investment.
• You will bear substantial direct and indirect fees and expenses in connection with your investment in the Fund.
• The underlying Private Funds involve a high degree of business and financial risk that can lead to substantial losses. The Fund, the Subsidiary, and the underlying Private Funds may utilize borrowings and financial leverage and significant risks may be assumed as a result.
• The amount of distributions that the Fund may pay, if any, is uncertain.
• The Fund may pay distributions in significant part from sources that may not be available in the future and that are unrelated to the Fund's performance, such as from offering proceeds, borrowings, and amounts from the Fund's affiliates that are subject to repayment by investors, if any.
• The Fund should be considered a complex investment and entails substantial risk. You should invest in the Fund only if you can sustain a substantial or complete loss of your investment.

Industry Context

The Harrison Street Infrastructure Income Fund operates within the growing real assets and infrastructure investment sector, which is attracting significant capital due to its potential for stable income and inflation hedging characteristics. The fund's focus on both privately-issued debt and equity, as well as publicly-traded securities, allows it to tap into diverse segments of the infrastructure market, including regulated assets, renewable energy, transportation, and digital infrastructure. The shift from LIBOR to SOFR as a reference benchmark reflects a broader industry-wide transition in financial instruments. The increasing use of AI Technologies is noted as a business and regulatory risk, indicating the industry's evolving landscape. The fund's interval structure and illiquidity are common characteristics for private real asset funds, catering to long-term institutional investors willing to accept limited liquidity for potentially higher returns.

Comparison to Industry Standards

• The Fund's total return of 9.80% for the fiscal year ended March 31, 2025, is a positive performance indicator, but without specific industry benchmarks or comparable fund performance data within the filing, a direct assessment against global benchmarks is limited.
• The estimated Total Annual Fund Operating Expenses of 3.55% (before waivers) and 1.95% (after waivers, excluding certain fees) are relatively high compared to many publicly traded diversified equity or fixed income funds, but may be more in line with other actively managed, illiquid alternative investment funds or funds-of-funds that invest in private assets.
• The use of leverage through a secured credit facility (SOFR + 2.75%) is a common practice in infrastructure and real asset funds to enhance returns, but the specific terms would need to be compared against similar private credit facilities in the market.
• The Fund's non-diversified status and investment in illiquid assets, including private funds and privately-issued debt, aligns with the characteristics of specialized real asset investment vehicles, which typically target higher returns to compensate for reduced liquidity compared to traditional public market investments.
• The termination of the sub-advisory agreement with Lazard Asset Management, LLC and the reliance on Brookfield Public Securities Group LLC for public infrastructure debt management suggests a strategic alignment or consolidation of sub-advisory relationships, which is a common operational adjustment in the asset management industry.

Management Changes

Corporate Governance

Legal Proceedings

• The Fund is not currently involved in any material legal proceedings.
• No material legal proceedings are threatened against the Fund.

Related Party Transactions

• The Adviser (Harrison Street Private Wealth LLC) receives an Investment Management Fee of 1.00% annually of the Fund's average daily NAV.
• The Adviser has contractually agreed to reduce its Investment Management Fee to ensure the total fee for the Fund and its VCRDX Subsidiary is 1.00%.
• The Adviser voluntarily waives/reimburses expenses to cap Total Annual Fund Expenses at 1.95% until December 31, 2025.
• The Adviser pays Brookfield Public Securities Group LLC a sub-advisory fee on a sliding scale from 0.35% down to 0.20% based on assets managed by Brookfield.
• Colliers International Group Inc. owns approximately 75% of the outstanding securities of the Adviser, creating an affiliation.
• The Adviser's co-founders and other employees own the remaining balance of the Adviser's outstanding securities.
• Conflicts of interest exist due to the Adviser receiving the Investment Management Fee irrespective of asset allocation between itself, the Sub-Adviser, and Private Funds, potentially incentivizing less capital allocation to the Sub-Adviser.
• The Adviser, Sub-Adviser, and Private Fund Managers and their affiliates manage other client accounts, which may compete with the Fund for investment opportunities and create conflicts of interest in allocation.
• Intermediaries distributing Fund shares receive compensation from the Adviser (not the Fund), which may create an incentive to recommend the Fund over other investments.

Stakeholder Impact

• **Shareholders**: Experience limited liquidity due to the interval fund structure and lack of a secondary market. Benefit from the Adviser's voluntary expense cap but bear substantial direct and indirect fees. Subject to tax implications on distributions and potential constructive distributions.
• **Adviser (Harrison Street Private Wealth LLC)**: Benefits from management fees and potential for increased AUM through continuous offerings. Faces conflicts of interest in allocating assets and managing other client accounts.
• **Sub-Adviser (Brookfield Public Securities Group LLC)**: Receives sub-advisory fees from the Adviser for managing a portion of the Fund's assets.
• **Lazard Asset Management, LLC**: Will cease to be a sub-adviser, impacting its revenue from this fund.
• **BNY Mellon (and BNY Mellon Investment Servicing (US) Inc.)**: Will lose administrative, accounting, and transfer agency service contracts to UMB.
• **UMB Fund Services, Inc. and UMB Bank, n.a.**: Will gain administrative, accounting, and transfer agency service contracts, expanding their business with the Fund.
• **Colliers International Group Inc.**: As the majority owner of the Adviser, benefits indirectly from the Fund's performance and AUM, and faces potential conflicts of interest due to its broader real estate and investment activities.

Next Steps

• The Fund will continue to offer shares on a continuous basis.
• Quarterly repurchase offers will be made for not less than 5% nor more than 25% of outstanding shares.
• UMB Fund Services, Inc. and UMB Bank, n.a. are expected to replace BNY Mellon for transfer agency, administrative, and accounting services on or around September 30, 2025.
• The sub-advisory agreement with Lazard Asset Management, LLC will terminate on October 31, 2025, and will not be renewed.
• The Adviser's voluntary expense cap at 1.95% will continue until December 31, 2025.
• The Board will continue to monitor potential conflicts of interest related to asset allocation between the Adviser and Sub-Adviser.

Key Dates

Recommendation

The Fund delivered a strong 9.80% total return and healthy net investment income for the last fiscal year, indicating effective investment management in its niche. The Adviser's voluntary expense cap is a positive step towards managing costs. However, the inherent illiquidity of an interval fund with no secondary market, coupled with a high overall expense ratio (even with the cap), makes it unsuitable for investors requiring regular access to capital. The termination of a sub-adviser and the change in administrative service providers introduce some operational uncertainty. While the fund's performance is good, the structural limitations and costs suggest that existing investors should hold, but new investors should carefully weigh the illiquidity and fee structure against their investment objectives and liquidity needs before considering an investment.

Keywords

Infrastructure Investment, Interval Fund, Closed-End Fund, Private Debt, Asset-Backed Securities, Infrastructure Loans, Real Assets, Income Fund, SEC Filing, Investment Management, Leverage, Liquidity Risk, Financial Performance, Harrison Street Private Wealth, Brookfield Public Securities Group, SOFR, Regulated Investment Company, Alternative Investments