Shareholders of the Pollen Street Secured Lending (PSSL) investment trust have indicated that they would back the closure of the fund should a proposed takeover by Waterfall Asset Management fail.
It comes as the deadline for Waterfall to make an offer to take over the alternative finance-focused investment trust was extended for a fourth time to allow discussions to continue.
A decision on an offer was originally due on 24 March but has since been moved due to the coronavirus pandemic to 21 April, 19 May and then 16 June.
Waterfall now has until 14 July.
“Over the past four weeks the company has consulted with shareholders accounting for a significant majority of its shares outstanding,” a stock market update from the PSSL board said.
“While there is inevitably a range of opinions, a number of themes have emerged.
“In particular, a majority of the shareholders consulted by both number and percentage of shares held would like to see the possible offer brought to the table and otherwise are minded to support an orderly run-off of the company’s assets and return of capital to shareholders. “
The board also noted that there does not appear to be majority support for a continuation of the existing investment strategy with either the current or a new manager.
“The board has progressed discussions with a number of potential replacement investment managers and expects to be able to reach a decision on a preferred candidate in the coming weeks,” the update said.
“The board has not taken any final decisions on future strategy at this stage but is likely in due course to recommend to shareholders that the company pursues an orderly run-off with capital to be returned to shareholders in as timely a manner as possible during the process.
“This will not preclude continuing to seek to bring the possible offer to the point where it can be formally considered.
“Any change to the company’s investment policy will be conditional upon the approval of shareholders.”
Waterfall has said it remains committed to making an offer.
The issue has already sparked a rift between the PSSL board and the investment manager Pollen Street Capital (PSC).
The board terminated its management agreement after accusing PSC of withholding due diligence information, a claim it denies.