ALTERNATIVE finance-focused fund Ranger Direct Lending (RDL) is set be wound down following a series of controversies over the fund’s declining value, a recent management review, and shareholder dissatisfaction.
The London-listed fund said in a stock exchange announcement on Monday morning that “the board has concluded that in the interests of certainty and protecting shareholder value the company should move to realise its assets in an orderly manner.”
The letter added that Ares Capital Management had withdrawn its application to become the fund’s new investment manager, despite RDL’s claims that the majority of shareholders approved of the appointment. Two of the fund’s largest shareholders, Oaktree Capital Management and LIM Advisors, had publicly opposed the appointment of Ares and both companies have been calling for the fund to be wound down for several months.
RDL indicated that this opposition to Ares’ appointment had made it difficult to proceed with the fund’s new investment plan, adding that “for the company to have a successful future under Ares’ management, it requires a smooth realisation and reinvestment programme alongside encouraging new investor interest to reduce the discount, improve liquidity in the company’s shares and, in time, grow the company.”
Ares has turned down the investment manager apppointment following the shareholder backlash, RDL said.
Read more: Pressure mounts for Ranger board overhaul
“Given Ares’ decision, the fact that Ares was the preferred candidate and that any other replacement manager would face the same issues, the board has concluded that in the interests of certainty and protecting shareholder value the company should move to realise its assets in an orderly manner,” RDL added.
Read more: Shareholders prepare to oust Ranger chairman
At the fund’s annual meeting on 19 June, shareholders will be asked to vote on a series of resolutions, including the removal of chairman Christopher Waldron and the appointment of two new directors to the board. Despite the decision to close the fund, RDL has urged shareholders not to appoint the directors who have been nominated by Oaktree and LIM, stating that it would be “wholly inappropriate” to bring them onto the board “given that their sponsors have led a campaign containing a significant number of inaccurate statements which has culminated in Ares’ withdrawal.”
Instead, RDL is supporting the appointment of two independent directors, who will assist with the winding up of the fund.
Read more: Ranger NAV flatlines amid fund closure talks
RDL added that, “assuming the current independent directors continue to make up a majority of the board following the AGM, the board will commence a dialogue with ordinary shareholders and ZDP shareholders about a portfolio realisation process and timetable for winding-up the company.”