Reinvestment of Management Fees

RNS Number : 7539F

Fair Oaks Income Fund Limited

01 August 2016

 

Fair Oaks Income Fund Limited

1 August 2016

FAIR OAKS INCOME FUND LIMITED (the "Company" or "FOIF")

(Incorporated in Guernsey under The Companies (Guernsey) Law, 2008, as amended, with registered number 58123 and registered as a Registered Closed-Ended Collective Investment Scheme with the Guernsey Financial Services Commission)

REINVESTMENT OF MANAGEMENT FEES

Further to the announcement dated 4 July 2016 regarding the end of the Commitment Period of the Master Fund in which the Company is invested, the Company announces certain consequential changes to the arrangements under which management fees are reinvested by the Investment Adviser.

As the Commitment Period ended on 12 June 2016, any proceeds raised by FOIF from the purchase of new Shares by the Investment Advisor will currently have to be kept in cash or be redistributed to Shareholders.

To avoid the potential dilutive effects of these purchases, the Directors have agreed to amend the terms of the Investment Advisory Agreement regarding the reinvestment of fees as follows:

·     The Investment Advisor has previously agreed to reinvest and/or procure the reinvestment by the General Partner or by an associate of it of (a) 25 per cent. of the fees which it receives annually from FOIF pursuant to the Investment Advisory Agreement  and (b) 25 per cent of the Management Fee which the General Partner receives annually from the Master Fund in relation only to FOIF's  interest in the Master Fund by, in each case, subscribing for or procuring the subscription for ordinary shares issued by FOIF at the then-prevailing Net Asset Value per Share, provided that it shall instead use its best endeavours to purchase or procure the purchase of such Shares in the secondary market in circumstances where, at the time of any such subscription or purchase, the Shares are trading at a discount of 5 per cent. or more to the then-prevailing Net Asset Value per Share.

·     The Investment Advisor will instead agree to reinvest its fees for a calendar quarter in circumstances where the Shares trade at any discount to the then-prevailing Net Asset Value per Share at the end of such quarter.

·     More specifically, the amended Investment Advisory Agreement will provide that in circumstances where, as at the date the Net Asset Value per Share with respect to the last calendar month of a calendar quarter (the "Quarter End NAV") is published, the price of the Shares in FOIF, adjusted for any dividends declared if required, traded at close in the secondary market below the then-prevailing Quarter End NAV, to reinvest and/or procure the reinvestment by an associate of it of (a) 25 per cent. of the fees which it shall receive with respect to that quarter from FOIF pursuant to the IAA and (b) 25 per cent. of the Management Fee which the General Partner shall receive with respect to that quarter from the Master Fund in relation only to FOIF's interest in the Master Fund by, in each case, using its best endeavours to purchase or procure the purchase of Shares in FOIF in the secondary market.

·     The amended obligation to purchase or procure the purchase of such Shares shall be fulfilled by the Investment Advisor by no later than one month after the end of such calendar quarter.  The Investment Advisor will have no obligation to reinvest and/or procure the reinvestment of fees it receives with respect to a calendar quarter in circumstances where either (i) the Shares in FOIF did not trade at close in the secondary market at a discount to the then-prevailing Quarter End NAV; or (ii) where the ordinary shares in the Fund did trade at close in the secondary market at a discount to the then-prevailing Quarter End NAV and it is unable to purchase or procure the purchase of Shares in FOIF in the secondary market at a discount to then then prevailing Quarter End NAV despite having used its reasonable endeavours to do so and, in either case, the Investment Advisor shall retain all fees it receives for such quarter.   

Enquiries

Fair Oaks Income Fund Limited

Email: [e-mail]

Web: www.fairoaksincomefund.com

Fair Oaks Capital Limited

Hayley Stewart

DDI: [phone]

Email: [e-mail]

Praxis Fund Services Limited

Ben Le Prevost

DDI: [phone]

Email: [e-mail]

Numis Securities Limited

Nathan Brown, Corporate Broking

DDI: [phone]

Email: [e-mail]

Notes

Fair Oaks Income Fund Limited is registered as a Registered Closed-Ended Collective Investment Scheme with the Guernsey Financial Services Commission. The Company was admitted to trading on the Specialist Fund Market of the London Stock Exchange (now the Specialist Fund Segment of the London Stock Exchange) on 12 June 2014. The Company's ordinary shares have the TIDM: FAIR and ISIN: GG00BMBN1D14.

The investment policy of the Company is to seek exposure to US and European CLOs or other vehicles and structures which provide exposure to portfolios consisting primarily of US and European floating-rate senior secured loans and which may include non-recourse financing. The Company will implement its investment policy by investing in FOIF LP.

Capitalised terms in this announcement are as defined in the Company's prospectus dated 3 August 2015.

 

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