18 May 2011 11:30
18 May 2011
Greenwich Loan Income Fund Limited ("GLIF" or the "Company")
Investment Manager Agreement Variation
The Company announced on the 27 April 2011 that it is reviewing, with its advisors, the potential benefits of reducing its exposure to T2 CLO I Ltd ("the CLO") to the point at which the CLO is no longer consolidated in the accounts of the Company. This would result in a substantial reduction in management fees, together with other potential benefits. As was stated in the announcement, there can be no certainty as to the outcome of this review.
Having consulted with the Company's investment manager, T2 Advisers LLC, as to the optimal way to ensure that all parties' interests are aligned during this review and beyond, the Board today announces that it has agreed an amendment to the fees to be paid under the Company's investment management agreement with T2 Advisers LLC.
The intention of this amendment is to provide the Company with the economic benefit of deconsolidation of the CLO in an assured timeframe, whilst providing the investment manager with clarity that will allow it to adapt to an environment of a substantially reduced fee income from the Company.
For the next three quarterly management fee payments, starting with the payment due at the end of June 2011, the management fee will be fixed at the payment for the previous quarter of £911, 272.
Thereafter, from the management fee payable at the end of the first quarter of 2012, the management fee will be calculated on the Company's gross assets, less the fair value of the liabilities within the CLO, to the extent that the CLO remains consolidated by the Company. As at 31 March 2011, the fair value of the liabilities within the CLO was $212m. The new fee will be subject to a minimum fee of £155,000 per quarter.
In all other aspects the investment management agreement remains unchanged.
The directors consider, having consulted with the Company's nominated adviser, that the aforementioned amendments to the investment management agreement are fair and reasonable insofar as the Company's shareholders are concerned.
Contacts:
Geoffrey MillerGreenwich Loan Income Fund Limited+353 1 4433 466
Patrick ConroyGreenwich Loan Income Fund Limited+1 203 983 5282
Philip Secrett
Nominated Adviser
Grant Thornton UK LLP
+44 (0) 20 7383 5100
James MaxwellSinger Capital Markets Limited+44 (0) 20 3205 7650
Ed Gascoigne Pees
Financial Dynamics+44 (0) 20 7269 7132