Waterfall eyes Pollen Street Secured Lending fund as board/manager relations break down

Shares in Pollen Street’s Secured Lending fund (PSSL) jumped this morning as news broke that the fund has received a 900p all-cash approach from Waterfall Asset Management.

According to PSSL’s board the fund’s largest shareholder Invesco has set out its intention to support Waterfall should the offer materialise.

The potential deal, which represents an 8.7 per cent premium to PSSL’s Monday share price of 828p, was revealed this morning along with news that PSSL’s board are looking to terminate its relationship with existing fund manager Pollen Street.

Serving notice to Pollen Street was necessary in the board’s view due to “serious governance issues” including that the board was “unable to obtain from the Manager all of the Company's own documentation and information” in order to explore the takeover offer.

Animosity between the fund manager and board was aired in public earlier this year when Pollen Street recommended a dividend raise to the market, only to be shot down by the PSSL board.

Pollen Street, led by CEO Lindsey McMurray, this morning hit back at the accusations saying that “we have little confidence in the Board being able to manage the release of highly commercially sensitive information” which it had been requesting.

Regardless the board has served 12 months notice which will see Pollen Street removed as the fund manager next year.

"This decision to give notice to terminate has been taken after very serious consideration,” said PSSL’s chairman Simon King, who also hinted to the earlier conflict over the dividend raise.

“The Board believes that, while portfolio performance has been satisfactory, it is not acceptable to withhold Company information from the Board, publish very material information about the Company without Board approval and fail to confirm compliance with clear and important instructions from the Company, its client.”