News (May 29, 2019 to present)
DALLAS, Dec. 9, 2020 /PRNewswire/ -- On December 7, 2020, the Board of Trustees (the "Board") approved a Managed Distribution Plan (the "Plan") for Vertical Capital Income Fund (the "Fund"). Pursuant to the Plan, the Fund will pay a minimum monthly distribution to shareholders at a stated annual rate as a percentage of the 3-month average net asset value ("NAV") of the Fund's shares prior to the month of distribution. The distribution is calculated as 8% of the previous three-month average NAV, divided by 12. Payment of monthly distributions under the Fund's Plan will commence in January 2021.
The Plan will provide investors with consistent, but not guaranteed, periodic distributions from the Fund, regardless of when or whether income is earned or capital gains are realized at an annual rate approximately 2-3% higher than the Fund's most recent annual rates. The Plan will be facilitated by the Fund's pursuit of acquisitions of residential whole loan investments aimed at producing higher overall net investment income funded by the Fund's existing credit facility, routine payoff of principal on currently held notes within its portfolio, and proceeds from purposeful active disposition of lower-yielding existing portfolio residential whole loans. The Fund will continue to differentiate its overall investment strategy from other residential mortgage focused funds by continuing to invest solely in whole loans and not tranches of residential mortgage backed securities.
The Plan will be subject to periodic review by the Board, and the Board may amend the terms of the Plan including amending the annual rate of payment or may terminate the Plan at any time without prior notice to a Fund's shareholders. The Fund's distribution rate may be affected by numerous factors, including changes in realized and projected market returns, Fund performance, and other factors. There can be no assurance that an unanticipated change in market conditions or other unforeseen factors will not result in a change in the Fund's distribution rate at a future time. The amendment or termination of the Plan could have an adverse effect on the market price of a Fund's common shares.
If sufficient investment income is not available for a monthly distribution, a Fund will distribute long-term capital gains and/or return of capital in order to maintain its stated fixed annual distribution rate under the Plan. A return of capital may occur, for example, when some or all of the money that shareholders invested in a Fund is paid back to them. A return of capital distribution does not necessarily reflect a Fund's investment performance and should not be confused with "yield" or "income." No conclusions should be drawn about a Fund's investment performance from the amount of such Fund's distributions or from the terms of the Plan. When distributions exceed total return performance, the difference will reduce the Fund's net asset value per share.
In order to comply with the requirements of Section 19 of the Investment Company Act of 1940 and an exemptive order granted to the Fund by the Securities and Exchange Commission, the Fund will provide its shareholders of record on each distribution record date with a Section 19 Notice disclosing the sources of its dividend payment when a distribution includes anything other than net investment income. The amounts and sources of distributions reported in Section 19 Notices are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Fund's investment experience during its full fiscal year and may be subject to changes based on tax regulations. The Fund will send shareholders a Form 1099-DIV for the calendar year that will tell them how to report these distributions for federal income tax purposes. Information on the Fund's Section 19 Notices can be found at www.vertical-incomefund.com.
The public health crises caused by the COVID-19 outbreak may exacerbate other pre-existing political, social and economic risks to which the Fund is exposed. The duration of the COVID-19 outbreak and its effects cannot be determined with certainty. The final determination of the source and tax characteristics of all distributions in 2020 will be made after the end of the year.
Shares of closed-end funds often trade at a discount from their net asset value. The market price of Fund shares may vary from net asset value based on factors affecting the supply and demand for shares, such as Fund distribution rates relative to similar investments, investors' expectations for future distribution changes, the clarity of the Fund's investment strategy and future return expectations, and investors' confidence in the underlying markets in which the Fund invests. Fund shares are subject to investment risk, including possible loss of principal invested. No Fund is a complete investment program and you may lose money investing in a Fund. An investment in the Fund may not be appropriate for all investors. Before investing, prospective investors should consider carefully the Fund's investment objective, risks, charges and expenses. For further details, please visit Vertical Capital Income Fund's website at vertical-incomefund.com.
This release contains forward-looking statements relating to the business and financial outlook of Vertical Capital Income 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 primarily invests in residential whole mortgage loans and residential whole loans secured by deeds of trust. The investment objective of the Fund is to seek income.
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, TX-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.
SOURCE Vertical Capital Income Fund
SOURCE Vertical Capital Income Fund