TIDMSQN
RNS Number : 1817P
SQN Asset Finance Income Fund Ltd
08 June 2020
8 June 2020
SQN Asset Finance Income Fund Limited
LEI: 2138007S3YRY3IUU4W39
Appointment of Investment Manager
The Board of SQN Asset Finance Income Fund Limited (the
"Company") is pleased to announce the appointment of KKV Investment
Management Ltd ("KKV") as portfolio manager of the Company and the
appointment of International Fund Management Limited ("IFM") as the
Company's AIFM.
Appointment of KKV
KKV is a newly formed investment management company, majority
owned by Kvika Securities Ltd ("KSL"), the UK operating subsidiary
of Kvika Banki hf. ("Kvika Banki"), a Nordic publicly traded
commercial bank focusing on asset management and investment
services. The investment team at KKV will be led by Dawn Kendall as
CIO, supported by Chris Greener and Christian Holder, both of whom
are experienced credit managers who have recently joined KKV. The
majority of the operational personnel of SQN UK have also joined
KKV, providing continuity to the Company's operations,
relationships with its borrowers and knowledge of its investment
portfolio.
KKV offers a strong proposal which combines the expertise and
considerable experience of individuals previously within the SQN
Group with a newly recruited team of financial services
professionals with significant expertise in the fields of credit
and risk. Together with the infrastructure and governance
associated with Kvika banki and KSL, the Board believes this
proposition delivers the continuity and enhanced fund management
skills expected by Shareholders.
Ken Hillen, Executive Chairman of KKV
Ken Hillen has joined KKV as Executive Chairman and will take a
significant leadership role within the organisation. Ken has held a
number of senior banking roles throughout his career: including
senior corporate director at RBS, managing director for Scotland
and Northern Ireland at Anglo Irish Bank and head of commercial and
corporate banking for Scotland at Bank of Ireland. Ken has a broad
experience of non-executive and consultancy roles within financial
services and other sectors. His current non-executive roles require
regular dialogue with a number of private equity houses and banks.
He holds positions in both listed and private companies. Ken has
significant experience of managing complex lending relationships
and corporate loans. At one point he had responsibility for a loan
book of c.GBP2.0 billion ranging across a number of sectors and
jurisdictions. He also has considerable restructuring and
insolvency experience. Ken will chair the Board and the management
committee of KKV with the CIO and the COO reporting to him.
Dawn Kendall, Chief Investment Officer and Director, KKV
Dawn has 34 years' experience in financial services, including
25 years' experience managing fixed income portfolios for financial
institutions, including her role as Partner and Portfolio Manager
at TwentyFour Asset Management, as CIO for IAM, a fund of hedge
funds, and Portfolio Manager for The Codelouf Trust, a family
office. Additionally, Dawn has held senior investment and
management positions at Newton, Axa (Architas) and Investec Wealth.
She began her career with SG Warburg where she worked as a risk
manager. Her areas of specialism are fixed income portfolio
management for private and public debt, structured finance, product
development and derivatives. Since 2017, in her capacity as
investment manager, she has led the successful turnaround of the
SME Loan Fund which became the SQN Secured Income Fund plc. Dawn
has a degree in Law and earned her MBA in 2004.
Gunnar Sigurdsson, Director, KKV and Managing Director of
KSL
Gunnar Sigurdsson has 25 years of experience in the financial
industry, ranging from commercial and investment banking to private
equity, in Europe and the United States. Gunnar has significant
transaction and structuring experience, having led many large and
complex acquisition and advisory projects as well as building and
managing the portfolio management arm of a major private equity
operation, based in London. Gunnar has been a member of the boards
of directors of several companies, including major UK retailing and
wholesaling companies such as Iceland Foods and House of Fraser.
Gunnar spent 10 years in the USA in the 90s, where he obtained his
MBA degree from Pennsylvania State University and worked for
several years for Bank One (now JP Morgan). Gunnar has been based
in the UK for the better part of the last 16 years and is now
responsible for leading the UK operations of Kvika Banki.
Helgi Bergs, Director, KKV
Helgi Bergs has over 20 years of experience in the financial
industry, ranging from commercial and investment banking to private
equity and distressed debt. Helgi has significant transaction,
structuring and advisory experience, having led many large complex
structuring and advisory projects. Helgi has previously overseen
large principle investment portfolios (>EUR700m) and has a
proven track record of raising funds in the private equity space.
Helgi has previously been a member of the boards of directors of
several companies including ADP and Phase Eight. Helgi joined the
Kvika team in London in 2017. Helgi is the Managing Director of
Kvika Advisory Ltd., which is a subsidiary of KSL.
Ragnar Dyer, Director, KKV
Ragnar Dyer joined the Kvika Group in 2010 and was appointed
Managing Director of Jupiter Capital Management in 2013. He was
then appointed Managing Director of Finance and Operations at Kvika
banki in 2019. Ragnar started his career in the financial sector in
2007. Before that he served as a fund manager and a partner of
Teton Investments and at Straumur Investment bank as a broker and
specialist in interest rates and derivatives. Ragnar has completed
the Stanford Executive Program from Stanford University, holds a
B.Sc. degree in Engineering Management from the University of
Reykjavík and is a certified securities broker in Iceland.
Ariel Vegoda, Director, KKV
Ariel is a qualified lawyer and an operational expert with over
a decade's experience of transaction negotiation, deal execution
and complex work outs of transactions. Alongside that, he is also a
highly skilled litigator having specialised in commercial
litigation, asset recovery and dispute resolution whilst at Mishcon
de Reya, prior to assuming the role of General Counsel of SQN UK in
2015 and the additional role of Chief Operating Officer of SQN UK
in 2019. In this role, Ariel has been heavily involved in assisting
with work out situations in the Company's portfolio. Ariel will
work with KKV as a consultant on an interim basis to ensure
continuity alongside the broader operational team from SQN UK.
Chris Greener, Investment Manager, KKV
Chris has been a credit professional for 22 years. He founded
White Circle in 2017 and prior to this he spent two years as a
Director of several developing businesses with a focus on SME and
consumer finance. He assisted these businesses in accessing debt
and equity capital as well as seeking out new lending and
investment opportunities. From 2008 to 2014, he managed over EUR8bn
of European asset backed credit at BlackRock and under his tenure,
the asset backed team provided strong returns in the flagship
European multi-strategy fixed income fund.
Prior to joining BlackRock, Chris was a Director responsible for
covering asset backed credit in Europe and Asia with Société
Générale. Before that he worked at RBS and UBS where he began his
career in 1998. Chris earned his BSc Mathematics from Imperial
College, London.
Christian Holder, Investment Manager, KKV
Prior to founding White Circle in 2017, Christian worked at
Jupiter Asset Management as a senior credit analyst covering
securitised and corporate credit. He worked at BlackRock for over
11 years until 2015 with his last role as lead investment manager
in the European asset backed credit team. His expertise in private
equity backed deals created significant alpha across the platform.
Between 1996-2004 he worked at Fitch Ratings, most recently in the
asset backed credit team after working as an accountant. Within the
asset backed team, he worked in the consumer ABS and RMBS
monitoring team, before becoming lead credit analyst in the Whole
Business Securitisation team. The role involved analysis of large
property and operating asset portfolios in the leisure, care home
and utility sectors. Christian is a CIMA qualified accountant and
has a BA in Geography from Salford University.
Both Chris Greener and Christian Holder have assumed their
roles, reporting to the CIO, as of the transfer date.
KKV has also recruited a highly experienced executive with
significant operational, regulatory and risk management
capabilities who is expected to join KKV in Q3, 2020. Further
details of this appointment will be announced in due course.
International Fund Management Limited
The Board has also appointed IFM, part of the PraxisIFM Group
listed on The International Stock Exchange, as the Company's AIFM.
IFM is a full service AIFM with over US$5 billion assets under
management with experience across all major asset classes,
including credit, and provides services to multiple investment
trust and investment company clients listed on the main market of
the London Stock Exchange. IFM, as AIFM, will be responsible to the
Company for risk management and portfolio management and will
delegate the provision of portfolio management services to KKV.
The fees associated with the ongoing appointment of IFM will be
met by KKV.
Key Terms of the New Investment Management Agreement
Management Fees
The Company has agreed that initially KKV will receive fees on
the same basis as the fees previously payable to SQN Capital, being
1.0% on the first GBP300m of Net Asset Value ("NAV"), 0.9% on the
next GBP200m of NAV and 0.8% for any NAV over GBP500m.
In the event that the 2020 Continuation Vote passes for either
or both Share Classes, that fee basis would continue thereafter for
the respective Share Class ("Continuation Fee"). If both Share
Classes vote in favour of continuation, the Continuation Fee would
continue to be apportioned pro-rata between the Ordinary Shares and
the C Shares on the basis of NAV.
In the event that the 2020 Continuation Vote does not pass for
either Share Class, an alternative fee basis would be adopted for
any Share Class that is placed into managed wind-down ("Wind-Down
Fee"), with effect from 1 July 2020, and the fees would be applied
to each Share Class independently.
The Wind-Down Fee would be calculated on the following
basis:
-- The assets in the portfolio that are classified as Stage 1
under IFRS 9 as at 31 March 2020, would be subject to a management
fee of 1.0% of the carrying value per annum; and
-- The assets in the portfolio that are classified as Stage 2 or
Stage 3 under IFRS 9 as at 31 March 2020, would be subject to a
management fee of 0.75% of the carrying value per annum plus a
performance fee of 10% of any net capital gains on realisations of
such assets during each financial year.
The total fees payable by each Share Class would be capped at
1.0% of the average NAV for the financial year of that Share Class,
with any excess performance fee being carried forward and which may
be offset by the Company against any net capital losses on
realisations in the following financial year.
KKV has committed to use 5% of the management fees it receives
in respect of each Share Class to buy the Shares of that class in
the market, and undertaken not to dispose of such Shares for a
period of at least two years from the date of acquisition, without
the prior written consent of the Company.
The Company will not incur any duplication of investment and
portfolio management fees as a result of the transition to KKV.
However, in the event that the Company served notice on KKV within
the first 36 months of the date of the agreement, the Company would
be required to reimburse KKV for certain costs that the Company
would otherwise have incurred in connection with the transfer of
the management contract to KKV, with such amount decreasing over
time.
Termination provisions
The new investment management agreement will be terminable by
either the Company or KKV serving at least 12 months' notice. There
is no minimum initial term.
Extraordinary General Meeting
The Company will shortly publish a circular to convene an
Extraordinary General Meeting ("EGM"), as well separate class
meetings for holders of Ordinary Shares and C Shares, in connection
with the 2020 Continuation Vote, as announced on 30 April 2020.
At the EGM, the Board intends to propose that the Company be
renamed KKV Secured Loan Fund Limited. In addition, following the
EGM, the Ordinary Share ticker will change to 'KKVL' and the C
Share ticker will change to 'KKVX'.
The Company's new website following the appointment of KKV can
be found here: https://kkvim.com/sqn-asset-finance-income-fund
Terms used in this announcement shall, unless the context
otherwise requires, bear the meanings given to them in the
"Conclusion of Strategic Review and Change of Investment Manager"
RNS released by the Company on 30 April 2020.
For further information please contact:
SQN Asset Finance Income Fund Limited (via the Company
Peter Niven Secretary)
KKV Investment Management Ltd
Catherine Halford Riera
Nicola Bird 0207 429 2200
BNP Paribas Securities Services S.C.A., Guernsey
Branch
Company Secretary 01481 750 853
Winterflood Securities Limited
Neil Langford 020 3100 0000
Buchanan
Charles Ryland
Henry Wilson 020 7466 5000
Prosek (PR for KKV) Pro-KKV@prosek.com
Fiona Laffan
Clare Glynn
Cautionary statements
This announcement may contain and the Company may make verbal
statements containing "forward-looking statements" with respect to
certain of the Company's plans and its current goals and
expectations relating to its future financial condition,
performance, strategic initiatives, objectives and results.
Forward-looking statements sometimes use words such as "aim",
"anticipate", "target", "expect", "estimate", "intend", "plan",
"goal", "believe", "seek", "may", "could", "outlook" or other words
of similar meaning. By their nature, all forward-looking statements
involve risk and uncertainty because they relate to future events
and circumstances which are beyond the control of the Company.
As a result, the actual future financial condition, performance
and results of the Company may differ
materially from the plans, goals and expectations set forth in
any forward-looking statements. Any
forward-looking statements made in this announcement by or on
behalf of the Company speak only as of the date they are made. The
information contained in this announcement is subject to change
without notice and except as required by applicable law or
regulation, the Company expressly disclaims any obligation or
undertaking to publish any updates or revisions to any
forward-looking statements contained in this announcement to
reflect any changes in the Company's expectations with regard
thereto or any changes in events, conditions or circumstances on
which any such statements are based.
Neither the content of the Company's website (or any other
website) nor the content of any website
accessible from hyperlinks on the Company's website (or any
other website) is incorporated into or
forms part of this announcement.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCSSWFLWESSESM
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June 08, 2020 02:00 ET (06:00 GMT)
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