By Aisling Finn on Thursday 1 October 2020
Waterfall Asset Manager will take over as investment manager effective immediately, over seven months after first proposing a deal.
As part of the takeover, Mirabella Financial Services will act as PSSL’s alternative investment fund manager (AIFM) alongside Waterfall.
The US asset management giant first proposed a takeover of the embattled fund, proposing a 900p all-cash approach, in February 2020.
Under today’s deal, Waterfall will be paid 0.75 per cent net asset value (NAV) every month minus Mirabella’s AIFM fee, with the total fees payable to both parties being capped at £2m for the period between 14 August 2020 and 31 March 2021.
The board said the new fees are a “significant reduction compared to the previous management fee arrangements”
Pollen Street Secured Lending has also agreed to pay its former manager “a sum representing the approximate balance of the unpaid base management fee, including the unexpired notice period.”
Simon King, chairman of Pollen Street Secured Lending, said: "The Board is pleased to effect the change of Investment Manager, something which the Board unanimously and firmly believes is in the best interests of shareholders. This follows a period of intensive and rigorous preparatory work undertaken by Waterfall and its legal advisers."
The hunt for a new manager began earlier this year after PSSL’s relationship with former manager Pollen Street Capital (PSC) turned sour, subsequently leading to the fund serving its manager notice to terminate the relationship between the two.
PSSL claimed there were “serious governance issues” and accused PSC of blocking a proposed takeover offer by Waterfall in February, claiming that the board was “unable to obtain from the Manager all of the Company's own documentation and information.”
The saga took another turn for the worst when PSSL threatened legal action against its own manager following accusations of Pollen Street Capital deploying more delaying tactics to slow down the possible takeover.
In an RNS announcement posted this morning, Pollen Street Capital confirmed the deal saying: it “is pleased to confirm it has reached agreement with the board of Pollen Street Secured Lending plc for the early termination of the Investment Management Agreement in place between the two entities.”
The takeover deal is effective immediately, nearly seven and a half months after Waterfall first proposed a deal.