On 22 April, JZ Capital Partners (JZCP) announced a proposed change to its investment policy, to which it would make no further investments except in respect of which it has existing obligations or to the extent that investment is applied to provide support to selected existing investments. The intention of the change is to realise the maximum value of the Company’s investments and, after repayment of all debt, to return capital to Shareholders. JZCP board has now announced that it is requesting shareholder approval for the proposed amendments to, and restatement of, its investment policy. An extraordinary general meeting is being convened for 12 August 2020, in Guernsey (click here to read the full announcement).
Spruceview proposal
JZCP’s board has reached an agreement with the JZAI Founders, the fund’s manager, for the proposed reduction of the company’s commitments to its investments in Spruceview for $8.6m. Spruceview is an asset management business in the United States and aims to address the demand from corporate pensions, endowments, family offices and foundations for fiduciary management services through an outsourced chief investment officer model as well as specific products per asset class.
Investment policy amendment proposal
On the investment policy amendment, the following was statement was released: “JZCP is proposing to amend and restate its investment policy to enshrine the company’s new strategy of making no further investments except in respect of which it has existing obligations or to the extent that investment is applied to support certain selected existing investments. The intention of the change is to realise the maximum value of the company’s investments and, after repayment of all debt, to return capital to Shareholders.
The rationale for this change in policy is that, whilst JZAI, as the company’s investment adviser, has been working to stabilise the company’s investments, the board recognises that, as a result of the disappointing and significant losses in value of its real estate portfolio and poor performance, and having reviewed all available options, there has to be a change in investment policy. The policy of making no further investments (with a limited number of exceptions), whilst representing only a change in emphasis from the existing investment policy, is nonetheless a significant change and is considered to be material alteration to the policy.
The principal amendment to the company’s existing investment policy relates to the company’s approach with regard to new investments. The company’s existing investment policy provides that the company anticipates that no meaningful capital will be dedicated to new investments other than honouring its funding commitments and supporting its portfolio of assets. The company is now proposing to alter the emphasis of this concept by amending the policy to provide that no new investments will be made except in respect of which it has existing obligations or to the extent that investment is applied to support certain selected existing investments. The company’s strategy for implementing the policy will also be changed to realising the maximum value of the company’s investments and, after repayment of all debt, to returning capital to shareholders. The strategy will remove the other existing objectives and will not be expressed as being limited in duration to the next few years.
Save for those amendments as set out above, the company is not otherwise proposing to make any other material changes to its existing investment policy (including its corporate objective and borrowing policy) and, as such, the existing investment policy otherwise remains largely unchanged. The company’s amended and restated investment policy is set out in full in the circular, with copies of the same being on display and available for inspection as described in the Circular.
The company has previously voluntarily agreed that, in line with chapter 15 of the listing rules (with which the company voluntarily complies and insofar as the listing rules are applicable to the company by virtue of its voluntary compliance), it would not materially alter its existing investment policy without the prior approval of shareholders. The investment policy amendment proposal is considered to be a material change to the investment policy and shareholder approval is accordingly being sought for the proposed amendments to the same.”
JZCP: JZ Capital Partners calls August EGM to amend investment policy