Ranger’s board makes some policy changes, manager commits to reinvesting part of fee and update on Princeton. Ranger Direct Lending Fund has been informed by Ranger Alternative Management II LLP (the “Investment Manager”) that it intends to utilise part of its management fee to acquire ordinary shares in the market in order to demonstrate its confidence in the investment strategy.
Borrowing Policy
Ranger Direct Lending is permitted to employ borrowings up to 50% of NAV, in aggregate (calculated at the time of draw down under any facility that the company has entered into). To date, the company’s wholly owned subsidiary, Ranger Direct Lending ZDP plc, has issued 53 million zero dividend preference shares raising gross proceeds of GBP53,805,000, the entirety of which have been loaned to the company. The company has not incurred any other borrowings. Accordingly, current borrowings as a percentage of NAV are 29.3%.
The Board has today instructed the Investment Manager not to exercise its borrowing powers as set out in the borrowing policy to incur any senior borrowings through the provision of credit facilities by financial institutions over the next twelve months, so as not to incur any debt that has preference over the existing zero dividend preference shares.
Investment Restrictions
The Company’s current investment restrictions prevent the company from, inter alia, investing:
- more than 35 per cent. of Gross Assets in Debt Instruments that are not secured (directly or indirectly) by assets and/or personal guarantees; or
- more than 25 per cent. of Gross Assets in Debt Instruments originated through or issued by any single Direct Lending Platform,
- with such restrictions assessed at the time of investment.
The Board has resolved, having regard to the company’s current exposure to Princeton and to the performance of the portfolio as a whole, that the Investment Manager should seek to realign the Company’s portfolio with the aim of increasing the diversification of the portfolio as and when existing Debt Instruments mature.
Accordingly, the Company intends to target the following investment thresholds within the investment restrictions set out in the Company’s investment policy, in each case at the time of investment by the Company:
- as existing investments mature over the next two years, the Investment Manager will seek to reduce the percentage of the portfolio that is attributable to Debt Instruments that are not secured (directly or indirectly) by assets and/or personal guarantees (i.e. Debt Instruments that are exposed to unsecured consumer lending) with a target that such investments do not represent more than 15 per cent. of Gross Assets by the end of that period; and
- as existing investments mature over the next 18 months the Investment Manager will target a portfolio allocation whereby aggregate investments in Debt Instruments originated through or issued by any single Direct Lending Platform do not exceed 15 per cent. of Gross Assets, but in any event, the Investment Manager will seek to ensure that such investments in Debt Instruments originated through or issued by any single Direct Lending Platform shall not exceed 20 per cent. of Gross Assets.
The Board believes that by phasing in such restrictions over a two year period as existing Debt Instruments mature, the company’s portfolio will realign organically and remain consistent with the company’s investment objective and policy.
Princeton
Finally, with respect to the company’s outstanding redemption request with Princeton, the company has not yet reached agreement with Princeton with respect to a redemption plan. The company will continue to seek resolution and reserves all rights and courses of action available to it in connection with its investment in Princeton.
RDL : Ranger’s board makes some policy changes