8 Jun 2018 07:00
Funds managed by Oaktree Capital Management, L.P. (“Oaktree”), an approximately 19% shareholder of Ranger Direct Lending Fund PLC (LON: RDL) (“Ranger” or “RDLF” or “the Company”), today released an open letter to Ranger shareholders.
The full text of the letter follows:
June 8, 2018
Dear fellow Ranger shareholders,
The Board’s latest response to our open letter dated June 6, 2018 raises a number of troubling questions which we urge the Board to answer without delay:
1. Why is the Board selectively engaging with only a minority of shareholders about the future of our Company, and disadvantaging others with dissenting views?
The Board inaccurately claims that Oaktree declined to participate in the review process, while “Independent Directors and their advisers continue to be in positive discussions with shareholders on the Ares proposal and related matter”. In reality, the Board and its advisor, Kinmont, repeatedly sidelined and delayed Oaktree’s ability to participate in the process alongside other shareholders, culminating in their giving us a direct ultimatum that we could only have a meeting with Ares if we agreed in advance to support their desired outcome. Since the beginning, Oaktree has advocated considering all strategic alternatives and has continually called on the Board to conduct an open and fair strategic review process. Oaktree remains open and ready to meet with Ares to hear how they plan to address our concerns, if the Board offers a meeting without self-serving preconditions. However, despite our extensive attempts to engage constructively with the Board, it has chosen to engage solely with a minority of RDLF shareholders supportive of its views on the direction of the Company. We also continue to question the Board’s statement that it has the support of 39% of shareholders on its recommendation to appoint Ares as the new investment manager, considering that to date based on our own stakeholder conversations we believe that a significant majority of shareholders share our concerns about the current Board’s stewardship.
2. Are the Board and its advisor conflicted?
We consider that the Board’s failure to meaningfully engage with Oaktree and other shareholders who have expressed dissenting views brings into question the independence of the current directors and the Board’s relationship with Kinmont. In the spirit of transparency, we call on the Board to publicly disclose the following with utmost urgency:
What dealings and discussions has each director had in recent years with Ares and its affiliates outside of RDLF? Is the Board’s key advisor Kinmont misaligned with shareholders due to compensation primarily based on placing a new manager, and not based on maximizing shareholder value?3. Is the Board reneging on its commitment to allow shareholders a vote on the Ares proposal?
The latest letter is a clear admission on the part of the Board that the Ares proposal is not yet ready to be voted on by shareholders despite being promised “as soon as possible” on May 1, and later on May 16, “with the intention, if possible, of calling a general meeting on the same date as is proposed for the Company's AGM”. In fact, the Board continues to refer to an Ares-focused GM circular, but shareholders have yet to see this circular, suggesting that, once again, the Board is opting for gamesmanship and is not going to give shareholders the opportunity to vote on the Ares proposal on June 19. We find this fact pattern alarming, and we strongly urge the Board to fulfill its commitments and fiduciary responsibilities by ensuring all shareholders have a vote on this crucial decision as soon as possible.
Oaktree strongly believes this Board has demonstrated that it is not fit for purpose at such a critical moment in the Company’s history. In our view, the Board’s weaknesses can only be resolved by adding to the Board and introducing improved oversight, a broader range of views and deeper relevant experience at this important time for the Company.
Oaktree’s highly qualified nominees, Greg Share and Dominik Dolenec, have over 40 years of combined valuable experience that will strengthen the Board at this critical juncture. Our nominees are committed to representing the best interests of all shareholders and driving value, and their interests are fully aligned with those of all RDLF shareholders.
We urge shareholders to act now to maximize the value of their investment – vote FOR resolutions 8 and 9 for our highly qualified nominees Greg Share and Dominik Dolenec, who will be committed to driving value for all shareholders, to be appointed to the Board. The Annual General Meeting takes place on Tuesday, June 19, 2018, and it is important to vote on or before Friday, June 15, 2018 to have your voice heard.
If shareholders have questions, or need assistance in voting shares, please call: Georgeson, +44 (0) 207 019 7032 or email anthony.kluk@georgeson.com.
Sincerely,/s/ Patrick M. McCaneyPatrick M. McCaneyManaging Director and Portfolio ManagerValue EquitiesOaktree Capital Management, L.P.
About Oaktree
Oaktree is a leader among global investment managers specializing in alternative investments, with $121 billion in assets under management as of March 31, 2018. The firm emphasizes an opportunistic, value-oriented and risk-controlled approach to investments in credit, private equity, real assets and listed equities. The firm has over 900 employees and offices in 18 cities worldwide. For additional information, please visit Oaktree’s website at http://www.oaktreecapital.com/.
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