Pollen Street Secured Lending (PSSL) has confirmed it has started discussions with Waterfall Asset Management about taking over the running of the alternative finance-focused fund.
It comes as Waterfall is still considering a separate cash offer to acquire the investment trust and has had several extensions to the deadline as it continues its due diligence.
Waterfall currently has until 5pm on 6 October to make an offer.
A monthly update from PSSL said the fund incurred £0.6m of costs associated with the possible offer during July.
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The investment trust is currently managed by Pollen Street Capital (PSC) but its management agreement was terminated earlier this year as the board was unhappy about a perceived lack of co-operation with the Waterfall offer, a claim denied by PSC.
Waterfall has since been appointed as a preferred successor that would manage a wind-down of the fund or alternatively it may acquire the fund if it makes the cash offer.
PSSL’s monthly update said it has started discussions with Waterfall to “assist in the transition.”
The update revealed the investment trust’s net asset value return for July was 0.39 per cent, pushed down by the Waterfall costs and cash reserves being built up during the pandemic.
It said the underlying portfolio remained resilient.
PSSL is currently trading on a discount to NAV of 10.5 per cent.