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TwentyFour Income Fund raising funds at 2% premium

TwentyFour Income Fund (TFIF) has announced that its intends to raise additional equity capital. The fund raise opens today and new shares are to be issued at a premium of 2% to the unaudited net asset value per share as at 23 November 2018 (to be published on 26 November). TFIF says that the fund raise is being conducted in response to continued investor demand and the favourable prevailing market conditions.

Background to fundraising

TFIF’s board and portfolio manager say that they believe there is significant opportunity to deploy additional funds with favourable returns given prevailing market conditions. Ben Hayward of, TwentyFour Asset Management LLP (TFIF’s portfolio Manager) says that, “While we have had access to some attractive investment opportunities over the last 20 months, which existing shareholders have benefitted from, there have not been enough to give us the confidence that we should expand the Company’s capital base. The recent volatility in equity and credit markets, has however, finally spilled over into the European ABS market, pushing spreads in some parts of the market to levels that we have not seen since 2016. We strongly believe that the market is now mispricing risk in this sector, as it has many times before, presenting an excellent opportunity to issue further capital to the benefit of both existing and new shareholders.

Fundamental performance in the underlying loan pools remains stable, and within expectations, indicating that the derating of the sector is due to risk sentiment across all markets, driven mainly by geopolitical events. Typically such instances offer a short-lived opportunity to access significant value.”

Timetable

TFIF’s announcement provides the following expected timetable for the fundraise:

  • Fund raise opens                                                26 November 2018
  • Announcement of unaudited NAV as at             6.00 p.m. 26 November 2018
    30 November and issuance price
  • Latest time and date for receipt of                      11.00 a.m. 29 November 2018
    commitments under the Issuance
  • Announcement of results of Issuance                 7.00 a.m. 30 November 2018
  • Admission and dealings in New Shares              8.00 a.m. 4 December 2018
    on the London Stock Exchange’s
    Main Market

About TwentyFour Income Fund

TwentyFour Income aims to generate attractive risk-adjusted returns, principally through income distributions by investing in a diversified portfolio of UK and European asset backed securities (less liquid, higher yielding, asset backed securities).Due to the predominantly floating rate nature of the portfolio, returns are expected to increase as interest rates rise. At least 50% of the portfolio will be investment grade rated at the time of the initial investment.

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