Fair Oaks Inc21 Regulatory News (FAIR)

Fair Oaks Income Fund Limited

11 August 2014

FAIR OAKS INCOME FUND LIMITED (the "Company")

(Incorporated in Guernsey under The Companies (Guernsey) Law, 2008, as amended, with registered number 58123 and registered as a Registered Closed-ended Collective Investment Scheme with the Guernsey Financial Services Commission)

First Acquisition

Fair Oaks Income Fund Limited (the "Company") is pleased to announce that Fair Oaks Income Fund LP (the "Master Fund") has entered into binding contracts to acquire, in the primary market, $10 million of B rated notes of OZLM8 CLO Ltd., a new CLO backed by a portfolio of US broadly syndicated, secured loans.

The manager of this CLO's portfolio is Och-Ziff Capital Group, which has previously closed seven U.S. CLOs with a total transaction value of approximately $4billion. This CLO's current target portfolio has a principal value of $600 million across approximately 160 unique bank loan issuers, with average exposure per issuer of approximately 0.6%.

The potential total return for this investment as estimated by the general partner of the Master Fund (the "General Partner") is between 10% and 12% per annum*.

Miguel Ramos Fuentenebro, co-founder of Fair Oaks Capital, commented:

"We are encouraged by the deal flow and market dynamics observed since the IPO, and are confident that the Master Fund can deliver against its target of being fully invested within 3 to 6 months."

Since the IPO, 51% of the net IPO proceeds have been committed through the initial portfolio and this first acquisition. In aggregate the Master Fund's portfolio now provides broadly diversified exposure to approximately 300 unique bank loan issuers. Geographic exposure is approximately 88% in the US and 12% in Europe.

In line with the active investment approach described in the Company's prospectus dated 16 May 2014, the General Partner believes that recent developments in the market potentially allow the Master Fund or vehicles seeded by it to act as originator of European CLOs managed by third party, unaffiliated managers. As originator, the Master Fund or its affiliates would hold the risk retention investment required by current regulations governing European CLOs, enhancing the value added by the Master Fund to independent CLO underwriters and managers.

Further information on the Company will be provided in the monthly factsheet to 31 July 2014 which is expected to be published by 15 August 2014.

Enquiries:

Fair Oaks Capital Limited

Miguel Ramos Fuentenebro

DDI: +44 (0) 20 31024855

Email: mrf@fairoakscap.com

Praxis Fund Services Limited

Ben Le Prevost

DDI: +44 (0) 1481 755524

Email: Ben.LePrevost@praxisgroup.com

Camarco

Edward Gascoigne-Pees

Hazel Stevenson

DDI: +44 (0) 203757 4989

Email: ed.gascoigne-pees@camarco.co.uk / hazel.stevenson@camarco.co.uk

Numis Securities Limited

Nathan Brown, Corporate Broking

DDI: +44 (0) 20 7260 1426

Email: n.brown@numis.com 

Fair Oaks Income Fund Limited

Fair Oaks Income Fund Limited is an authorised closed-ended investment company incorporated in Guernsey. The Company was admitted to trading on the Specialist Fund Market of the London Stock Exchange on 12 June 2014. The Company's ordinary shares have the TIDM: FAIR and ISIN: GG00BMBN1D14.

The investment policy of the Company is to seek exposure to US and European CLOs or other vehicles and structures which provide exposure to portfolios consisting primarily of US and European floating-rate senior secured loans and which may include non-recourse financing. The Company will implement its investment policy by investing in Fair Oaks Income Fund LP (the "Master Fund").

The investment objective of the Company is to generate attractive, risk-adjusted returns, principally through income distributions. On the basis of market conditions as at the date of its prospectus, and based on the $1 per share issue price, the Company is targeting a net total return of between 12 and 14 per cent. per annum over the planned life of the Master Fund, including a dividend of (a) in its first year of an amount at least equal to 5.0 per cent. of the $1 per share issue price; and (b) in respect of each year thereafter, 3 month USD Libor plus 6.75 per cent. of the issue price* (or an annualised equivalent in each case).

Notes

* the General Partner's estimate of the potential total return for this investment in calculated across certain scenarios and subject to certain assumptions. This and any other references herein to potential future returns or distributions are targets and not forecasts and there can be no guarantee or assurance that they will be achieved.

This document is for information purposes only and is not an offer to invest. All investments are subject to risk. Past performance is no guarantee of future returns. Prospective investors are advised to seek expert legal, financial, tax and other professional advice before making any investment decisions.