30. April 2020

Kvika expands its asset management operations in the UK

KKV Investment Management Ltd., a subsidiary of Kvika Securities Ltd., Kvika banki hf.´s UK subsidiary, has reached an agreement to provide investment management services to British secured loan fund SQN Asset Finance Income Fund. The fund has net assets of £390 million, equivalent to ca. ISK 70 billion and is listed on the London Stock Exchange.

The Board of SQN Asset Finance Income Fund commenced a strategic review of the operations of the fund in February, including the provision of investment management services, and opted to appoint KKV following a two-month competitive manager selection process. Heads of Terms between the Board and KKV have been signed and an Investment Management Agreement is expected to be finalised by the end of May, with KKV formally taking over management of the fund in early June.

KKV is a newly established investment manager specialising in direct lending and alternative credit, with daily operations led by Dawn Kendall and Ariel Vegoda. Together, Dawn and Ariel have accumulated decades of experience managing credit portfolios in the UK market, having been key employees of the fund’s current investment manager, SQN Capital Management. In addition to Dawn and Ariel, 15 experienced professionals currently employed by SQN will be joining the ranks of KKV once it formally assumes management of the fund.

SQN Asset Finance Income Fund was launched in 2014 as an alternative lending vehicle, focusing on senior secured credit to small and medium enterprises, primarily across the UK, Europe and the US. Initially popular with investors, the fund has recently struggled due to a limited number of non-performing assets, causing its share price to trade significantly below net asset value. KKV will therefore, in the short term, focus primarily on restructuring and maximising the value of the fund’s problem assets, while simultaneously assessing and responding to the impact of Covid-19 on the fund’s borrowers.

KKV will operate as an independent subsidiary of Kvika Securities, with Dawn Kendall, Ariel Vegoda and other key members of the management team taking a minority interest in the company. On behalf of Kvika Securities, the following will take a seat on the board of KKV: Gunnar Sigurdsson, Managing Director, Helgi Bergs, Managing Director of Kvika Advisory, a subsidiary of Kvika Securities, and Ragnar Dyer, Managing Director of Kvika banki’s finance and operating division.

Gunnar Sigurðsson, Managing Director of Kvika Securities Ltd.:

“We’re delighted to reach this milestone and expect to finalise an Investment Management Agreement by the end of May. The appointment of KKV to manage the fund is a significant step forward in Kvika’s UK asset management operation, which is integral to Kvika’s long-term strategy in Britain. The agreement will increase assets under management in the UK sixfold while also quadrupling our headcount. We’re fortunate to be joined by a skilled and experienced team of investment management professionals, led by Dawn and Ariel, which we expect will lay the foundations for significant growth opportunities in the coming years, particularly in the alternative credit and fixed income space, which is at the core of KKV’s offering. We are anticipating a rich seam of interest in alternative credit products in the coming years, due to their ability to provide attractive risk-adjusted returns in the current global environment of depressed yields.”

Information on parties:

Kvika Securities Ltd.:

Kvika Securities is the UK subsidiary of Kvika banki. The company started its operations in early 2017 and is authorised and regulated by the Financial Conduct Authority. Kvika Securities is authorised to manage alternative investment funds and provide asset management and corporate finance services, and currently has ca. £70m (12.5 bn.kr.) of assets under management. Kvika’s office in London has five employees.

Dawn Kendall:

Dawn has 34 years’ experience in financial services, including 25 years’ experience managing fixed income portfolios at distinguished 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. Her areas of specialism are fixed income portfolio management for private and public debt, structured finance, product development and derivatives.  Most recently, she has led the successful turnaround of the troubled SQN Secured Income Fund in her capacity as investment manager since 2017.

 Ariel Vegoda:

Ariel is a qualified lawyer and an operational expert with over a decade’s experience of transaction negotiation, deal execution and complex work outs of transactions. Alongside that, he is also a highly skilled litigator having specialised in commercial litigation, asset recovery and dispute resolution whilst at Mischon de Reya, prior to assuming the role of SQN General Counsel in 2015 and the additional role of SQN COO in 2019.

For further information, please contact Gunnar Sigurðsson, Managing Director of Kvika Securities Ltd., tel. +354 691 9366, gunnar@kvika.co.uk

Further information can also be found in the RNS published by the Board of SQN Asset Finance Income Fund on the London Stock Exchange earlier this morning: