Fair Oaks Income Fund says its NAV was down 0.3% over the first six months of 2016 but the share price generated a disappointing 11.3% return. Although the NAV outperformed the JP Morgan B rated CLO Index (-7.7%), it underperformed the US bank loan and high yield indices (+4.2% and +9.3% respectively). July saw a strong recovery in the NAV (+13.2%) which resulted in a 2016 year to date performance of 12.7%.
The Master Fund received US$13.9 million worth of cash flows in the first quarter of 2016 from its investments and a total of US$19.5 million in the second quarter of 2016, both above original expectations for the investments. They have declared and paid 0.7 US cents per ordinary share monthly dividends in the period (4.2 US cents per ordinary share declared total to the end of June).
On 4 July 2016, the Directors announced that the commitment period of the Master Fund, in which Fair Oaks Income Fund is invested, ended on 12 June 2016. On 29 July 2016, the Directors announced that it would be in the best interests of the fund to return realised capital to shareholders by means of a series of compulsory redemptions of ordinary shares at Net Asset Value pro rata amongst all shareholders. The Directors proposed that the rights of the existing ordinary shares be varied so as to make them redeemable at the option of the company.
FAIR : Fair Oaks Income Fund rebounds in July