Vertical Capital Income Fund (VCIF), mcap=$103m

VCIF pitch:
– Closed-end fund pivoting its strategies to invest in CLOs while changing the fund manager to Carlyle.
– Trades at 15% discount to NAV whereas CLO peers with similar fee structures trade at premiums to NAV.
– As part of this transaction, Carlyle agreed to pay $0.96/share in special dividend, launch tender offer for $25m, and also to acquire the equivalent amount of new issuance from the company.
– Major shareholders (35%) support this transaction.

VCIF valuation:

– $0.96 special dividend + $2.41 from the tender + remaining $7.8 NAV totals $11.17 or 16% upside to today’s price.
– It’s also possible that that VCIF trades at a premium to NAV inline with the comps.

Exp. gain: 16%-30%

Full write-up (free guest account required):

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