Vpc Specialty Regulatory News (VSL)

23 October 2020

VPC Specialty Lending Investments PLC (the "Company")

2020 Annual General Meeting - Update Statement

On 25 June 2020, the Board of the Company announced that all resolutions proposed at the 2020 Annual General Meeting of the Company (the "AGM") had been passed.

However, the Board noted that:

· 34.23% of votes were cast against Resolution 6 concerning the re-election of Mr. Richard Levy, and

· 24.67% of votes were cast against Resolution 4, which related to the re-election of the Chairman, Mr. Kevin Ingram.

In accordance with the guidance issued by the Investment Association in the cases of votes against any resolution exceeding 20%, the Board has consulted shareholders extensively since the AGM to understand the reasons for their votes.

The purpose of this statement is to provide an update on the shareholder consultation following the AGM. The Board's plan for refreshment and succession (which also arose during the consultation) is addressed in a separate announcement released to the market earlier today.

The consultation process took place in September and the first week of October. It was constructive and involved talking to the major shareholders who voted against the above two resolutions as well as many of the other large shareholders.

Reasons given by shareholders for the vote against Mr. Richard Levy:

Shareholders expressed concern about the perceived conflict of interest of Mr. Richard Levy remaining on the Board, given his role as Chief Executive Officer of the Investment Manager, Victory Park Capital Advisors LLC and his role as the controlling person of SVS Opportunity Fund GP, LP as general partner of the SVS Opportunity Fund LP ("SVS"), which held 19.21% of the voting rights of the Company at the time of the AGM.

Reasons given for the vote against the Chairman, Mr. Kevin Ingram:

Certain shareholders voted against Mr. Kevin Ingram on the basis that, as Chairman, he should bear the responsibility for the first set of continuation vote proposals presented by the Board to shareholders on 21st May 2020 and the Board's failure to address on a timely basis the perceived conflicts of interest of Mr. Richard Levy remaining on the Board.

Principal shareholder concerns:

In summary the principal concerns raised by shareholders related to:

· governance and conflicts of interest (especially relating to the shareholding held by SVS),

· refreshing and strengthening the independence of the Board, and

· improving Board communication with shareholders.

In addition to the principal concerns behind the votes, shareholders also expressed views on:

· share buybacks;

· simplifying the way the Investment Manager presents the investment proposition; and

· wanting the Investment Manager to build exposure gradually when diversifying the portfolio.

On a positive note, shareholders:

· were impressed with investment performance, particularly since March this year, noting the strong returns and the risk mitigation measures put in place by the Investment Manager;

· applauded the Investment Manager's timely response to information requests and the quality of the regular updates;

· noted that the Company's NAV performance stood out against that of the sector; and

· appreciated that the Company had been able to maintain the dividend during a very challenging period.

Actions taken by the Board in relation to votes cast at the AGM and issues arising from the Shareholder consultation:

On 23 June 2020, the Company announced that Mr. Richard Levy had indicated his intention to retire as a Director of the Company and his retirement will take effect once the search for his replacement has been concluded.

In the Half-Year Report released on 29 September 2020, the Board stated that it was seeking a director with financial acumen who is experienced in the investment trust market and has the standing, mindset, and knowledge to be independent and capable of challenge. A candidate from a diverse background would be preferred, but this is not an absolute requirement. The Board will also be seeking a candidate to chair the Audit & Valuation Committee in due course.

The Board is considering the views expressed about perceived conflicts and will provide an update to the market once it is in a position to do so.

The Board has a rigorous procedure in place to ensure that only Independent Directors are permitted to be present when any matters relating to the Investment Manager are discussed and this process is strictly enforced. Only the Independent Directors are members of the Nomination and the Management Engagement Committees.

The Board supports the view expressed by shareholders at the AGM with proxies representing 75.33% voting in favour of Mr. Kevin Ingram's re-election to the Board. Nevertheless, on 23 October 2020 the Company announced that Mr. Kevin Ingram intended to retire from the Board at or before the conclusion of the 2021 AGM. This announcement, which also provides detail on refreshing and strengthening the Board, can be found in the link below:

https://www.londonstockexchange.com/news-article/VSL/refreshing-and-strengthening-board-independence/14730493

In relation to concerns expressed about Board communication, shareholders welcomed direct engagement with the Board and the majority of those consulted would like this to be regular and extend beyond the Chairman. The Board will therefore offer to meet the larger shareholders on a regular basis. Board members are of course available at other times if shareholders wish to talk to them.

The Board takes all the concerns raised seriously and is committed to addressing them over the course of the coming months. The Board is working on all these areas and will keep shareholders updated on progress.

This statement is made in accordance with the requirements of Provision 4 of the AIC Corporate Governance Code 2019.

END OF ANNOUNCEMENT.

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About VPC Specialty Lending Investments PLC

VPC Specialty Lending Investments PLC (Company No. 9385218) is a UK listed investment trust focused on asset-backed lending to emerging and established businesses with the goal of building long-term, sustainable income generation. The Company identifies investment opportunities across various industries and geographies to offer shareholders access to a diversified portfolio of opportunistic credit investments originated by non-bank lenders with a focus on the rapidly developing technology-enabled lending sector.

Further information on VPC Specialty Lending Investments PLC is available at: http://vpcspecialtylending.com.

LEI: 549300UPEXC5DQB81P34