New Investment

RNS Number : 3780V

Jade Road Investments Limited

05 April 2023

 

5 April 2023

JADE ROAD INVESTMENTS LIMITED

(" Jade Road Investments ", " JADE ", the " Company " or the " Group ")

 New Investment

Jade Road Investments Limited (AIM: JADE), the London quoted company focused on seeking the best risk-adjusted returns globally is pleased to announce a New Investment of US$500,000 in Heirloom Investment Fund SPC - Heirloom Fixed Return Fund SP (the " Fund ") . The Fund offers investors a diversified portfolio of primarily asset backed and/or income producing investments targeted to deliver an attractive risk-adjusted return over the long-term. The Fund is managed by Heirloom Investment Management LLC ('HIM').

As JADE's Investment Policy has now been changed to consider global income producing opportunities, the Company has agreed to subscribe to US$500,000 in the Fund. The Fund's Portfolio represents a mix of geographically diverse assets. Its investments are primarily in regions that JADE does not currently have exposure to, thus adding diversification to JADE's portfolio.

The goal of the Fund is to build a portfolio of primarily asset-backed and/or income-producing investments that is uncorrelated to the general market and that consistently generates attractive risk-adjusted returns. The fixed return class of shares in the Fund that JADE has agreed to invest in is supported by Loss Absorption Shares, owned by the manager of the Fund, which absorbs any negative monthly losses. This provides strong downside risk protection while offering the ability to generate modest returns. A regular fixed yield of 6% will provide both distributions to investors as well as regular liquidity, avoiding investors having to suffer from long lockups although the yield is not guaranteed as it is dependent on the performance of the underlying investments.

As of Q4 2022, the Fund's portfolio included helicopter leasing and financing, litigation finance, real-estate (hospitality), agriculture (farm-business), real-estate (US single family rental), , asset-backed lending, maritime vessel leasing, infrastructure and music royalties..

JADE has also entered into a services agreement ('Services Agreement') with HIM in order to offer JADE corporate finance and marketing services for which HIM will be paid a retainer of £50,000 per year.

Heirloom SPV 2022 II, a fund managed by HIM is a substantial shareholder in the Company and consequentially the investment in the Fund and the Services Agreement are related party transactions under the Aim Rules for Companies. The Directors of the Company consider, having consulted with WH Ireland Limited, the Companies nominated adviser, that the terms of the transactions are fair and reasonable insofar as its shareholders are concerned.

As announced on 27 March 2023, Jade Road has signed an amended Services Agreement with its Investment Manager, Harmony Capital Investors Limited. In support of the Company's current objectives, HCIL will continue with its current duties, but shift its focus to the orderly monetization of its assets in Asia, which no longer align with the company's investment objectives.

The new agreement reduces the management fee paid to HCIL to $350,000 per year, which is a substantial reduction to its fees last year which were in excess of $1,000,000 and is part of the Company's continuing intention to reduce its ongoing costs. In addition, the amended agreement adjusts the incentive structure to encourage an orderly realization of value from the Company's existing portfolio.

John Croft, the Company's Executive Chairman, commented:

"The Directors believe that this investment is an exciting opportunity for JADE as the Company has stated its objective of becoming a dividend paying vehicle and this investment is an early indication of the Company's intent to deploy capital into income-generating, asset backed investments with a diversified geographic exposure. " In line with the recent change to our investment policy and refocus of the Company, we remain committed to the orderly disposal of our Legacy Portfolio. The revised Services Agreement with HCIL has been negotiated to provide a better alignment with the Company's current objectives. Future investments will be made in asset backed income generating investments and the Board hopes to be able to make further announcements on this in the near future."

This announcement contains inside information for the purposes of Article 7 of the UK version of Regulation (EU) No 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended. Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

FOR FURTHER INFORMATION, PLEASE CONTACT:

Jade Road Investments Limited	[phone]
John Croft
WH Ireland Limited - Nominated Adviser	[phone]
James Joyce
Andrew de Andrade
Hybridan LLP - Corporate Broker	[phone]
Claire Noyce
Lionsgate Communications - Communications Adviser	[phone]
Jonathan Charles

 

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