DALLAS, July 11,
2023 /PRNewswire/ -- Vertical Capital Income Fund
(NYSE: VCIF) (the "Fund") announced today that after engaging a
third-party broker and conducting an extensive competitive bidding
process, it has selected two winning bidders for a significant
majority of its investment portfolio. Each winning bidder has
acquired a portion of the Fund's investment portfolio in a sales
process conducted to satisfy certain conditions to the closing of a
previously-announced and shareholder-approved transaction (the
"Transaction") with an affiliate of global investment firm Carlyle
(NASDAQ: CG).
The Fund will invest the sales proceeds in cash equivalents in
anticipation of the closing of the Transaction (which remains
subject to other closing conditions). Consequently, the Fund will
generate reduced investment income while the proceeds are in cash
equivalents. Based upon the expected proceeds from this sale, which
resulted in aggregate proceeds lower than the book value of the
combined assets due to the significant sale needed to
facilitate the Transaction, the Fund has adjusted its net asset
value per share ("NAV") from $9.96 as
last reported on June 30, 2023, to
$8.27 as of today. Additionally, the
current Fund Board has terminated the Fund's Managed Distribution
Plan and suspended its existing distribution policy, and the Fund
will not declare its typical regularly scheduled July distribution
in anticipation of a new dividend declaration that is expected to
be made by Carlyle and the Fund Board before month's end following
the closing of the Transaction.
As part of the Transaction with an affiliate of Carlyle, Carlyle
Global Credit Investment Management L.L.C. ("CGCIM") will become
the investment adviser to the Fund. In addition, the Fund's
investment mandate will change to focus on investing in equity and
debt tranches of collateralized loan obligations ("CLOs") in order
to drive potential shareholder value.
Under the terms of the transaction agreement, if certain closing
conditions are satisfied, at the closing of the Transaction, CGCIM
or an affiliate will make a special one-time payment to the Fund's
shareholders as of the closing date of $10,000,000, or approximately $0.96 per share. In addition, CGCIM or an
affiliate will make a $40,000,000
equity investment in the Fund in multiple transactions, including
(1) the purchase of up to $25,000,000
of shares through a tender offer and (2) an investment of at least
$15,000,000 in newly issued shares
and private share purchases. All transactions are expected to occur
at prices that are equal to (or greater than) the Fund's
then-current NAV. As a result of these transactions and
assuming the tender offer is fully subscribed, Carlyle is expected
to own approximately 35% of the Fund.
"After careful consideration, the Board believes that refocusing
the Fund's strategy to invest in CLOs may add significant value for
our investors. We believe the Transaction is in the best interests
of shareholders and is the result of our previously announced
initiative to explore strategic options for the Fund," said
Robert J. Boulware, the Fund's Lead
Independent Trustee and Chairman of the Board of Trustees.
Carlyle has been investing in the credit markets for more than
20 years and is currently the world's second largest CLO
manager[1]. The firm currently has more than
$150 billion in credit assets under
management across a broad range of strategies, including illiquid
credit, liquid credit, and real assets credit.
Subject to the satisfaction of other closing conditions, the
Transaction is expected to close this week. If the
Transaction closes, the Fund's existing investment adviser, Oakline
Advisors, LLC, will resign in conjunction with the closing of the
Transaction and the effectiveness of the Fund's new investment
advisory agreement with CGCIM.
Ladenburg Thalmann & Co. Inc. served as financial advisor to
the Fund, and Thompson Hine LLP served as legal counsel to the Fund
and the independent Trustees of the Fund's Board. Simpson
Thacher & Bartlett LLP served as legal counsel to CGCIM.
The tender offer described in this release has not yet
commenced, and this communication is neither an offer to purchase
nor a solicitation of an offer to sell securities. At the time the
tender offer is commenced, Carlyle will file with the SEC a tender
offer statement on Schedule TO. Investors and security holders are
strongly advised to read the tender offer statement (including an
offer to purchase, letter of transmittal and related tender offer
documents) and the related solicitation/recommendation statement on
Schedule 14D-9 that will be filed by the Fund with the SEC, because
they will contain important information. These documents will be
available at no charge on the SEC's website at
www.sec.gov. In addition, a copy of the offer to
purchase, letter of transmittal and certain other related tender
offer documents (once they become available) may be obtained free
of charge at www.carlyle.com. A copy of the tender
offer statement and the solicitation/recommendation statement will
be made available to all of the security holders free of charge
at www.VCIF.us.
This release contains forward-looking statements relating to
the business and financial outlook of the Fund that are based on
the Fund's current expectations, estimates, forecasts and
projections and are not guarantees of future performance.
There is no assurance that the Fund will achieve its investment
objective. Actual results may differ materially from those
expressed in these forward-looking statements, and you should not
place undue reliance on any such statements. A number of
important factors could cause actual results to differ materially
from the forward-looking statements contained in this
release.
About Vertical Capital Income Fund
Vertical Capital Income Fund is an NYSE-listed closed-end fund
that seeks monthly income by investing primarily in performing
non-agency residential whole loans secured by real estate. As
a secondary strategy Vertical Capital Income Fund aims to provide
total return by acquiring performing residential loans at a
discount to the unpaid principal balance. Vertical Capital Income
Fund realizes capital gains as loans are paid off before
maturity. For more information visit VCIF.us and connect with
Vertical Capital Income Fund on Twitter.
About Carlyle
Carlyle (NASDAQ: CG) is a global investment firm with deep
industry expertise that deploys private capital across three
business segments: Global Private Equity, Global Credit and Global
Investment Solutions. With $381
billion of assets under management as of March 31, 2023, Carlyle's purpose is to invest
wisely and create value on behalf of its investors, portfolio
companies and the communities in which we live and invest.
Carlyle employs more than 2,200 people in 29 offices across five
continents. Further information is available at
www.carlyle.com. Follow Carlyle on Twitter @OneCarlyle.
About Oakline Advisors, LLC
Oakline Advisors, LLC is the adviser to Vertical Capital Income
Fund. Founded in 2013, Oakline Advisors, LLC is an SEC-registered
investment adviser that specializes in the residential whole loan
market. It is a wholly owned subsidiary of Dallas, Texas-based Behringer. Since its
inception in 1989, Behringer, together with its affiliates, has
raised equity of more than $6 billion
in assets through public and private fund structures. For more
information about Oakline and Behringer please visit their
respective websites at oaklineadvisors.com and
behringerinvestments.com.
[1] According to Creditflux, as of 3/31/23, Carlyle is
the world's second largest CLO manager by principal liabilities
(debt + equities) with $49.78 billion
in CLOs under management.
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SOURCE Vertical Capital Income Fund