LIM Advisors pushes for liquidation of Ranger Direct Lending

Ranger, a London-listed alternative lender, recommended last week that Ares Management become its new investment advisor, which would put the advisee on course for a more illiquid investment strategy.

Oaktree Capital Management’s push to wind-down Ranger Direct Lending has gained momentum, with another shareholder voicing support for the Dallas-based firm’s liquidation.

London-based LIM Advisors sent a letter to other shareholders encouraging them to vote against measures proposed by Ranger’s board of directors, though LIM had not been coordinating with Oaktree.

After mulling over Ranger’s future, the firm’s board recommended last week the company hire Los Angeles-based Ares Management as its new investment advisor. Some 20 investment firms submitted offers, from which Ares was chosen. Ranger will put the matter to a shareholder vote.

LIM and Oaktree own almost 28 percent of Ranger shares, with the former holding 9.2 percent and the latter holding 18.56 percent.

“We are writing to you because we agree with Oaktree,” LIM wrote to fellow shareholders. “Taken together, Oaktree and LIM own 27.76% of Ranger ordinary shares although LIM have not been acting with Oaktree in relation to our respective responses to the results of the strategic review.”

Neither Ares nor Ranger could be reached for comment.

In its letter, LIM said the existing investment manager should be in charge of the liquidation, which would avoid the expense of hiring a new manager.

In addition, the firm wants to wind down Ranger’s positions, except for the Princeton Alternative Income Fund. The Princeton investments have caused Ranger losses, and the two are engaged in a legal battle that LIM wants Ranger to pursue.

LIM, which could not be reached for comment, proposed changes to Ranger’s board, including that current chairman Christopher Waldron be removed from his position.

The shareholder also suggested the addition of two more directors to the board. Those individuals were Duff & Phelps managing director Brendan Hawthorne, who specialises in conflict resolution and asset recovery, and Eric Long, an experienced hand in the US loan market that currently works as a president at First Western Trust Bank.

LIM’s letter comes just days after Oaktree, which declined to comment, wrote a separate letter to shareholders in which it provided a hostile reaction to the Ranger board’s proposal to work with Ares.

On Friday, Oaktree maintained that Ares’ investment approach would be a significant departure from Ranger’s current strategy. On Tuesday, Oaktree nominated put forward its own board nominees: Ambina Partners co-founder Greg Share and Emona Capital managing partner and founder Dominik Dolenec.

Ares would invest in structured products that are lower in the capital structure versus Ranger’s current senior secured whole loan strategy as well as in multi-year loans that would make Ranger’s portfolio more illiquid.