Nb Distressed X Share News (NBDX)

LONDON (Alliance News) - NB Distressed Debt Investment Fund Ltd Tuesday asked shareholders to re-elect its board when they vote at its annual meeting on June 4, amid questions over whether some of its directors can be classed as independent.

Writing in the fund's annual report for 2014, Chairman Robin Monro-Davies said that a "minority of shareholders" does not consider directors John Hallam, Talmai Morgan and Christopher Sherwell to be independent.

Hallam, Morgan and Sherwell are also on the board of NB Private Equity Partners Ltd, a publicly listed private equity company, which according to Monro-Davies is managed by a separate part of the Neuberger Berman Group.

NB Distressed Debt Investment Fund is managed by the Distressed Debt team at Neuberger Berman.

"This matter has been discussed at length by the board, who also asked the company's brokers to consult major shareholders on their views. The message received was that this was not a major issue in the view of the majority of those major shareholders consulted," Monro-Davies said.

According to the chairman, the board is "actively considering its composition and succession planning".

The investment manager has two directors on NB Distressed Debt Investment Fund's board, Michael Holmberg and Patrick Flynn, both of whom are considered non-independent by Monro-Davies.

Holmberg and Flynn are the managers of NB Distressed Debt Investment Fund's portfolio.

"NB Private Equity is managed by a Neuberger Berman private equity team in Dallas, Texas. This company's business is managed from Chicago, Illinois, and the two teams generally have no contact with one another," Monro-Davies said.

The chairman said he considers Hallam, Morgan and Sherwell to be of "a totally independent frame of mind".

NB Distressed Debt Investment Fund received strong opposition to re-electing Sherwell, Hallam and Morgan at the annual meeting held in 2014.

According to documents available through the fund's website, 37% of shareholders voted against re-electing Sherwell, Hallam and Morgan at last year's annual meeting.

There was also opposition to the re-elections of Flynn and Holmberg, with 27% of shareholders voting against their continued presence on the board.

Only 1% of shareholders opposed the re-election of Monro-Davies at that meeting.

NB Distressed Debt Investment Fund's results for 2014, released Tuesday, showed that the company thinks there are "compelling" opportunities in real estate, transportation and energy debt.

"EU banks, in particular, increased their disposal of European and US loans and assets to EUR64 billion in 2013, versus EUR46 billion in 2012, EUR36 billion in 2011 and EUR11 billion in 2010. EUR67 billion of debt sales have occurred in the first nine months of 2014, on a run-rate to exceed EUR89 billion for the full year. However, over EUR1 trillion of non-performing loans remain on EU banks' balance sheets. We believe that the European regulatory environment may continue to facilitate further recognition and disposal of distressed loans," Munro-Davies said.

According to the report, the fund's aggregated net asset value increased to USD642.2 million from USD581.5 million over the course of 2014, as a fall in the net asset value figures for its ordinary shares and extended life shares was offset by the net asset value figure reported for the global share class launched in March 2014.

Thec company returned a total of USD33 million to ordinary shareholders in 2014 and USD5 million in 2015 to date. It returned USD4 million to extended life shareholders in 2014 and USD8.9 million so far in 2015.

It published two tables showing the performance of its share classes, with the numbers for 2014 including the global share class launched in March 2014.

Source: NB Distressed Debt Investment Fund Ltd final results for 2014

NB Distressed Debt Investment Fund shares were trading flat at 78.50p Tuesday afternoon.

By Samuel Agini; samagini@alliancenews.com; @samuelagini

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