Business Wire

EJF Sends Letter to Eurocastle Investment Requesting Change in Strategy and New Board Members

Del

EJF Debt Opportunities Master Fund, L.P., the beneficial owner of 26.2% of shares of Eurocastle Investment Limited (AMS:ECT) (“Eurocastle” or the “Company”), has today sent a letter to Eurocastle’s Board of Directors. This letter calls for a change in the Company’s strategic direction, raising concerns around the following five issues:

  • The Company’s position in doBank represents almost half its overall NAV
  • The Company continues to trade at a discount to NAV
  • The Board’s decision to hold approximately 27% of NAV in uninvested cash is excessive
  • The Company’s management fees related to its position in doBank, which is independently managed, are also excessive
  • The need for additional independent Board members

The full text of the letter is below:

24 May 2018

Eurocastle Investment Limited
Regency Court
Glategny Esplanade
St Peter Port
Guernsey, GY1 1WW
Channel Islands

Eurocastle Investment Limited Board of Directors:
Mr. Randal A. Nardsone
Mr. Jason Sherwill
Mr. Peter M. Smith
Dr. Simon J. Thornton
Ms. Claire Whittet

CC: Francesco Colasanti
Randal A. Nardone
Investor Relations

Dear Members of the Board of Directors of Eurocastle Investment Limited:

EJF Debt Opportunities Master Fund, L.P. (“EJF”) is the beneficial owner of 13,798,647 shares of Eurocastle Investment Limited (the “Company”), which represents approximately 26.2% of the voting share capital of the Company, excluding shares held in treasury. EJF has been a consistent shareholder in the Company during the past three years.

In our capacity as the largest shareholder of the Company, we write to express our concerns with the Company’s strategic direction regarding its position in the doBank Group (“doBank”) and its share price consistently trading at a discount to net asset value (“NAV”); the decision by the board of directors (the “Board”) to retain approximately 27% of NAV in cash; the charging of management fees on the Company’s position in doBank, which is independently managed; and the need for additional representation on the Board.

First, we believe the Company should seek to monetise its investment in doBank in the near term with a clear path to execution. The Company has pursued its core investment strategy and utilised proceeds, as outlined in its prospectus, in part, by acquiring doBank prior to its subsequent public market exit in 2017. Given that doBank is publicly listed and represents 49% of the Company’s total NAV, less accrued incentive fee of €34.5 million, each as of 31 March 2018, the Company should not hold half of its NAV in a single, exchange-traded position. If the Company’s shareholders want to own doBank, they may purchase the shares in the open market instead of paying FIG LLC (the “Manager”) a fee to make the same investment.

Due to the current embedded gain in the investment and the unpredictability of the equity markets, Italian political standings and banking regulation, we believe that monetisation is appropriate and may be achieved through the potential sale of doBank to a strategic buyer, which may potentially benefit doBank by adding non-performing loans to its portfolio over time. We note that affiliates of Fortress Investment Group LLC (“Fortress”) are also investors in doBank, and we do not think the Company should be managed as though it is a Fortress private fund and wedded to its investment strategies.

Second, the Company continues to trade at a discount to NAV, which we believe will continue unless the Company and the Board take a different strategic position. Our view is that the discount to NAV may be remedied through implementation of an open market buyback program that the Company’s shareholders authorised at the annual general meetings in 2016 and 2017. To date, the Company has not attempted to repurchase its stock in the open market. This authority may be utilised pro-actively to take advantage of the discount to NAV at which the Company trades while being accretive to NAV. We believe monetising doBank by selling to a strategic buyer will enable the Company to narrow this gap and also allow shareholders to realise the embedded gains in the Company’s position in doBank.

Third, we estimate that, as of 31 May 2018, the Company will be holding approximately €135 million, or approximately 27% of NAV, in uninvested cash, which we believe is excessive and should be distributed to shareholders while reserving for appropriate levels of working capital. While we recognise that the Company may from time to time want to hold cash for working capital purposes and to execute its investment strategy, we believe that the Company’s obligation to fund working capital alongside a regular dividend should be paid through the cash generation of the existing portfolio. Reserving cash commitments for working capital and future dividends is an inefficient use of cash and creates a drag on the Company’s performance. We highlight the Manager’s previous comments about its FINO investment that the deferred purchase price commitment over the next few years is to be funded via portfolio cash flows.

Fourth, we believe charging full management fees on doBank, an independently managed public company, is excessive because doBank’s “majority shareholder, Avio S.a.r.l. (a company jointly owned by Fortress and the Company), does not exercise management and coordination activities in respect of doBank,” according to doBank’s 2017 financial reports. The Manager currently charges a fee of 1.5% on NAV, excluding net corporate cash (the “Adjusted NAV”). The Company’s Adjusted NAV equaled €352 million, as of 31 March 2018, of which doBank was €230 million. doBank is a standalone business and, based on doBank’s own financial reports, the Company’s ownership of doBank shares does not require active management from the Manager.

Fifth, the Manager has affiliates on the Board and is also a shareholder of the Company. In light of the Manager’s multiple roles, including managing Fortress’ private funds which co-invest alongside the Company, there should be additional representation on the Board to serve the best interests of the Company and its shareholders, and to minimise potential conflicts, including with respect to the Company’s ownership of doBank. We invite the Manager to nominate two directors to the Board with input from EJF and other shareholders.

We believe that a discussion with the Board, the Manager, and the Company’s shareholders on these issues about maximising value for the Company’s shareholders would benefit all of the Company’s stakeholders.

Sincerely,

EJF Debt Opportunities Master Fund, L.P.

By: ____________________________________
Name: Emanuel J. Friedman
Title: Chief Executive Officer of EJF Capital LLC

About EJF Debt Opportunities Master Fund, L.P.

EJF Debt Opportunities Master Fund, L.P. is managed by EJF Capital LLC (“EJF Capital”), which is an SEC-registered1, employee-owned alternative asset management firm headquartered outside of Washington, D.C. EJF Capital manages approximately $6.4 billion2 of hedge, separately managed accounts, and private equity assets, as well as $2.6 billion2 of CDO assets through its affiliates. EJF Capital was founded in 2005 by Manny Friedman and Neal Wilson along with a small team of professionals from Friedman, Billings, Ramsey Group, Inc. EJF Capital currently employs approximately 80 professionals across three offices globally (Arlington, Virginia, London, England and Shanghai, China).

____________________________

1  

Registering with the US Securities and Exchange Commission does not imply any level of skill or training.

2 As of 30 April 2018. Firm assets under management includes $579.8 million of uncalled capital.

Contact information

EJF
Hammad Khan, +44 203 752 6771
hkhan@ejfcap.com
or
Hanbury Strategy
Kit Preston Bell, +44 7805 497 922
kit.prestonbell@hanburystrategy.com

Om Business Wire

Business Wire
Business Wire
24 Martin Lane
EC4R 0DR London

+44 20 7626 1982http://www.businesswire.co.uk

(c) 2018 Business Wire, Inc., All rights reserved.

Business Wire, a Berkshire Hathaway company, is the global leader in multiplatform press release distribution.

Følg saker fra Business Wire

Registrer deg med din epostadresse under for å få de nyeste sakene fra Business Wire på epost fortløpende. Du kan melde deg av når som helst.

Siste saker fra Business Wire

TYAN Introduces Entry Server Platforms Optimized for the New Intel® Xeon® E-2100 Processors13.12.2018 13:00Pressemelding

TYAN®, an industry-leading server platform design manufacturer and a MiTAC Computing Technology Corporation subsidiary, is releasing a broad selection of new server motherboards and systems optimized for the new Intel® Xeon® E-2100 processors. The new lineup is designed to offer enhanced performance, advanced security, and reliability of cost-effective entry server solutions. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20181213005005/en/ TYAN's New Intel Xeon E-2100 Processor-based Platforms Increase Reliability and Security for Entry Servers. (Photo: Business Wire) “Small and medium-size businesses need to maintain their competitiveness by deploying a powerful server platform for performance, enhanced memory capabilities, and hardware-enhanced security,” said Danny Hsu, Vice President of MiTAC Computing Technology Corporation's TYAN Business Unit. “TYAN’s Intel® Xeon® E-2100 processor-based platforms are optimized for clou

GSMA’s Programme ‘Tech4Girls’ Wins 2018 Corporate Citizen of the Americas Award from the Organization of American States13.12.2018 13:00Pressemelding

The Trust for the Americas has selected GSMA as a winner of the 2018 Corporate Citizen of the Americas Award in the category ‘Technical Skills for the Future of Work’ for its program ‘Tech4Girls’. The award was presented by the Secretary General of the Organization of American States (OAS), Luis Almagro, at a ceremony held last week in Washington, D.C. Ana Tavares Lattibeaudiere, Head of North America, and Paula Ferrari, Regional Marketing Director for Latin America, received the award on behalf of the GSMA. Tech4Girls is part of the global GSMA’s Women4Tech programme, which focuses on reducing the persistent gender gap in the mobile industry. Women4Tech offers different touchpoints for women across their education and career journeys through dedicated initiatives, development and networking opportunities. Women4Tech supports the United Nations Sustainable Development Goals, in particular SDG 5: “Gender Equality.” Launched in March 2018 by GSMA North America, Tech4Girls delivers hands-

FLIR Systems Launches Three Cooled Neutrino Family Thermal Camera Cores13.12.2018 13:00Pressemelding

FLIR Systems, Inc. (NASDAQ: FLIR) today announced three Neutrino™ midwave infrared (MWIR) camera cores: the small, lightweight FLIR Neutrino LC and two FLIR Neutrino Performance series cores, the SX12 and QX. The latest models expand the FLIR Neutrino cooled camera core family for commercial, industrial, and defense original equipment manufacturers (OEM) and system integrators. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20181213005036/en/ Next generation cooled FLIR Neutrino thermal camera cores: Neutrino LC (left) and Neutrino Performance Series (right). (Photo: Business Wire) The Neutrino LC is FLIR’s first High Operating Temperature (HOT) MWIR camera core and the first model in the SWaP+C (Size, Weight, Power, and Cost) series. As the smallest, lightest weight, and lowest power consuming Neutrino model available, the LC can be integrated with smaller drones and allow drone operators to fly longer. With HOT technology, N

Biomax Informatics launches the NeuroXM™ Brain Science Suite13.12.2018 12:57Pressemelding

Biomax Informatics AG announced the launch of its latest product, the NeuroXM™ Brain Science Suite, this week at the Biomax-ETRI Symposium on Cognitive Brain Informatics held in Planegg, Germany. Following a successful early-adaptor program, the company launched the NeuroXM suite of tools and features for working with multimodal high-dimensional brain data ready for clinical use. The award-winning NeuroXM Brain Science Suite lets brain scientists work interactively with high-dimensional multimodal brain data ranging from neuroimaging to genetics and transcriptomics. The suite includes a unified knowledge model for managing the abundant heterogeneous data available for the brain. It connects patient brain data to public knowledge in databases, atlases and ontologies for automatic annotation with methodological meta-information so that they become invaluable for clinical and scientific use. The NeuroXM suite supports every brain science task from standardizing preprocessing workflows to

Slice Insurance Cloud Services Now Available in the UK & EU13.12.2018 12:00Pressemelding

Slice Labs Inc., an award-winning on-demand insurance cloud platform provider, announced today the availability of Insurance Cloud Services (ICS) in the UK and EU. The first customer to use ICS in the UK is Legal & General with the launch of on-demand, pay-per-use homeshare cover. Insurance products available through the Slice ICS platform offer customers a rich, engaging, fully digital experience that is quick, and flexible. True to the company’s stated intention of extending global availability of ICS following a $20M USD Extended Series A, UK and EU insurers are now able to subscribe to ICS and launch on-demand insurance products customised to locale, language, and demographics. Cheryl Agius, CEO of Legal & General’s Insurance division, said “Legal & General is delighted to be working with Slice on the new on-demand product, a growing business in the US and now in the UK market.” European insurtech influencer Dr. Robin Kiera, CEO of DigitalScouting added, “Digital transformation lea

Western Union Works with TerraPay to Expand Payout Options to Millions of Mobile Wallets13.12.2018 12:00Pressemelding

Western Union (NYSE: WU), a leader in cross-border, cross-currency money movement, announces an alliance with TerraPay to enable mobile wallet and bank account payout. The alliance further expands upon Western Union’s account payout network for sending remittances directly into customers’ mobile wallets across Europe, Africa, Asia and Latin America. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20181213005331/en/ TerraPay CEO Ambar Sur and Head of Account Payout Network for Western Union Sobia Rahman (Photo: Business Wire) TerraPay’s low value payments network connects financial instruments internationally. The company’s interoperability engine enables customers to send and receive transactions across diverse payment instruments and platforms – enabling mobile wallets in international, regional and domestic markets. “Joining with TerraPay is a great opportunity to further diversify and expand our payment options across the gl