INFLUENTIAL shareholder adviser Glass Lewis has recommended investors in the Ranger Direct Lending (RDL) fund support the installation of two new board members but oppose the removal of chairman Christopher Waldron.
RDL has been locked in dispute with key investors Oaktree Capital Management and LIM Advisors, who are unhappy with the performance of the investment trust which has been hit with legal proceedings against its Princeton holding and poor returns.
Despite the calls for the fund to be wound down, Oaktree has submitted a resolution for RDL’s annual meeting on 19 June calling for its own nominees – Greg Share and Dominik Dolenec – to be placed on the board.
Meanwhile, LIM Advisors has issued a resolution for the appointment of Brendan Hawthorne and Eric Long.
Shareholders have to vote on the board members by 15 June.
Releasing its shareholder recommendations report ahead of the annual meeting, US proxy adviser Glass Lewis has said discussions about the fund’s operations and structure are “best left to management and the board.”
But it has recommended that shareholders vote for one each of Oaktree’s and LIM Advisors’ nominees.
The report said Hawthorne has expertise in dispute resolution and asset recovery while Long has experience in the US loans market.
However, Glass Lewis said shareholders should oppose the other appointments due to potential conflicts as Long is the brother of LIM Advisors’ chairman and founder, while Dolenec is managing partner of a firm which has engaged RDL on behalf of Oaktree in connection with its investment.
“In light of the fund’s generally poor performance since its inception, and the clear dissatisfaction of major shareholders with the fund’s returns, as well as concerns with regard to the effectiveness of the current directors’ stewardship over the last three years, we’re inclined to conclude that an opportunity exists to enhance the board’s oversight, shareholder representation and investor perspective,” Glass Lewis said.
“We believe this can be accomplished to an extent which would be beneficial for all shareholders of the fund without infringing on certain shareholders’ interests.”
It comes as Oaktree released another open letter urging investors to back its nominees if there is no support for the investment trust to be closed.
Responding to Oaktree’s open letter, RDL said the shareholder had “engaged in a disruptive campaign seeking to force through a winding up of the company, irrespective of the interests of other longer-term shareholders.”
RDL also said it would appoint additional non-executive directors with relevant experience.