THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE MARKET
ABUSE REGULATION (EU NO. 596/2014).
SQN Secured Income Fund plc
(LSE: SSIF) (the "Company" or "SSIF")
Appointment of Investment Manager
Following its announcement on 26 May 2020, the Board of SQN Secured Income Fund plc, a specialist secured lending income investment trust, is pleased to announce the formal appointment of KKV Investment Management Ltd. ("KKV") as portfolio manager of the Company and the appointment of Kvika Securities Ltd. ("KSL") as the Company's AIFM.
Appointment of KKV
KKV is a newly formed investment management company, majority owned by Kvika Securities Ltd, 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 Chris 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 currently 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, this proposition delivers the continuity and enhanced fund management capacity expected by Shareholders.
Below is a profile of each of the key members of the KKV management team.
Ken Hillen, Executive Chairman of KKV
Ken Hillen, the former chairman of SSIF, 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.£2.0 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 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 (>€700m) and has a proven track record of raising funds in the private equity space. Helgi has previously been 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 out 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 €8bn 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.
Kvika Securities Ltd.
The Board has also appointed KSL, the parent company of KKV, as the Company's AIFM. KSL is the UK operational subsidiary of Kvika Banki, a Nordic commercial bank with a focus on asset management and investment services. Kvika Banki is the second largest asset manager in the domestic market with £2.6bn in assets under management. Kvika Banki is headquartered in Iceland with its shares (ticker: KVIKA) listed on the Nasdaq Iceland main market. KSL is regulated and authorised by the FCA to manage alternative investment funds and provide asset management and corporate finance services. KSL, 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 KSL will be met by KKV.
Key Terms of the New Investment Management Agreement
The Board and KKV have agreed that the management of SSIF would transfer to KKV on the same commercial terms as are currently in place. KKV will receive fees on the same basis as the fees payable to SQN Capital, being 1.0% on the first £250 of Net Asset Value ("NAV"), 0.9% on over £250m of NAV.
If the Continuation Vote being held on 19 June 2020 does not pass, KKV has undertaken to negotiate in good faith with the Board appropriate amendments to the management agreement to reflect the managed wind down or reconstruction proposals that are developed as a consequence of the strategic review to align KKV's management fees to incentivise the maximum return to Shareholders. The Company will not incur additional investment and portfolio management fees as a result of the transition to KKV.
The new investment management agreement will be terminable by either party serving 12 months' notice. There is no minimum initial term.
For further information please contact:
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KKV Investment Management Ltd
Catherine Halford Riera
tel: +44 20 7429 2200
William Marle / Giles Rolls
tel: +44 20 7220 0500
Kepler Partners LLP
Hugh van Cutsem
tel: +44 20 3384 8790
Charles Ryland/Henry Wilson
tel: +44 20 7466 5000
This announcement contains information which, prior to its disclosure, was considered inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 (MAR). The person responsible for arranging for the release of this announcement on behalf of the Company is Kevin Robins of Elysium fund management limited.
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.
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