You can vote, and are encouraged to vote, today on the WHITE proxy card “FOR” the re-election of the four independent Trustees - Steven J. Finkle, Lawrence S. Jones, J. Heath Malone and Phillip K. Marshall– who oversee our efforts to protect the value of your investment.
To cast your vote, please follow the instructions on your WHITE proxy card.
If you have any questions or require any assistance with voting your shares, please call the Trust’s proxy solicitor, Innisfree M&A Incorporated, at +1 (877) 750-9496 in the U.S. and Canada or +1 (412) 232-3561.
How do I vote?
You can vote your shares by following the instructions on the WHITE proxy card.
If you have any questions or require any assistance with voting your shares, please call the Trust’s proxy solicitor, Innisfree M&A Incorporated, at +1 (877) 750-9496 in the U.S. and Canada or +1 (412) 232-3561.
Additional information is also available at UDFforShareholders.com.
When is the deadline to vote?
Shareholders must submit their votes by the 2024 Annual Meeting, which will be held on December 10, 2024, at 10:00 AM CST in a virtual-only format.
UDF IV shareholders as of the close of business on November 12, 2024, the record date, are entitled to vote their shares at the Annual Meeting or to submit a proxy before the Annual Meeting.
We urge you to vote your shares on the WHITE proxy card FOR the UDF IV Board Nominees today in order to ensure your vote is counted.
What should I do if I’ve already voted on the green proxy card?
If you have already voted on the green proxy card, you can still vote on the WHITE proxy card, only your latest dated and validly cast vote will count.
Why should I vote for UDF's trustee nominees?
You should vote for your Board’s trustee nominees because they have acted, and continue to act, to safeguard the Trust’s assets and protect the value of your investment.
Over the last several years, we have navigated extraordinary challenges.
During this time, under the oversight of the Board, the Trust’s management team and external advisor have implemented strategies that are driving improved loan repayments, enhancing our financial profile and enabling us to continue our track record of returning capital to shareholders.
In fact, since inception, UDF IV has paid cash distributions to its shareholders totaling approximately $189.7 million – or approximately $6.19 per share – including approximately $8 million in 2023 and approximately $4 million in the first two quarters of 2024.
Despite our work to protect your investment, NexPoint Real Estate Opportunities, LLC, an indirect subsidiary of NexPoint Diversified Real Estate Trust (NXDT), and its affiliates (collectively, “NexPoint”) continue to pursue a self-interested campaign at the expense of all UDF IV shareholders.
We urge you to vote on the WHITE proxy card FOR the Board’s nominees to prevent NexPoint from extracting the value of our portfolio for their own benefit.
Who are the UDF IV Board's Nominees? What are their qualifications?
The Board’s nominees up for reelection are Steven J. Finkle, Lawrence S. Jones, J. Heath Malone and Phillip K. Marshall – each of whom is highly qualified and engaged with a track record of acting decisively to protect the value of your investment.
Mr. Finkle has an extensive understanding of the financial and brokerage markets given his decades of experience in leadership and advisory roles in the insurance industry. He currently serves as President of National Brokerage Associates (NBA), a full-service insurance brokerage he founded in 1995. Mr. Finkle holds Series 7, 24 and 63 securities licenses and has served on advisory committees of multiple insurance carriers.
Mr. Jones serves as chairman of the UDF IV Board of Trustees and has extensive real estate industry and audit experience and strong leadership skills. Over the course of his career, Mr. Jones served as a managing director of Encore Enterprises Inc., - Equity Funds, a senior audit partner at PricewaterhouseCoopers LLP, and executive vice president and treasurer of Wyndham International. He has also served as an independent director on the boards of CIM Real Estate Finance Trust and Moody National REIT I.
Mr. Marshall has extensive financial and accounting experience as well as valuable M&A and business development expertise. Mr. Marshall served as the CFO of RCI Hospitality Holdings for more than a decade, during which he was involved in the successful acquisitions of more than 25 businesses. Prior to RCI, he served as CFO of publicly held CDT Systems and as an audit partner at several independent CPA firms.
Mr. Malone has deep financial and accounting expertise and a proven track record of raising capital through public and private markets. He currently serves as CFO of Azzurro Living, LLC and Codarus, LLC, which operate in the home furnishings industry. Mr. Malone has also served in various leadership roles at other home furnishings companies, including as CFO of Sunset West, Co-Founder and CFO of James Martin Vanities, LLC, and Co-Founder and CFO of Max Industries, LTD.
Why shouldn’t I support NexPoint?
We believe that NexPoint is pursuing a self-interested campaign to extract the value of the Trust’s portfolio for its own benefit and to the detriment of all other shareholders, including you.
NexPoint has attempted to take over management of the Trust for the past five years, causing significant disruption to our operations and undermining shareholders’ interests.
This includes launching numerous frivolous lawsuits against the Trust and launching a hostile tender offer, which it extended 13 times, to purchase Trust shares at the bargain basement price of $1.10 per share, or approximately a 90% discount to the Trust’s book value per share at the time.
All of NexPoint’s nominees are connected to companies that have poor track records of stock price performance and/or overseeing shareholder capital.
Moreover, NexPoint has a poor track record of managing its own fund.
A subsidiary of NexPoint Advisors is the advisor to NexPoint Diversified Real Estate Trust (NXDT), the NexPoint fund that owns UDF IV shares. NXDT’s share price has declined by 69.02% over the past two years, as of August 16, 2024, as compared to the S&P 500 benchmark index which increased 29.01% during the same time period.
Per NXDT’s Q2 2024 Investor Presentation, as of June 30, 2024, NXDT was trading at a 70% discount to its Net Asset Value (NAV).
According to its own financial reports, over the past 2 years, NXDT has lost over $230 million.
Since September 2023, NXDT has resorted to paying its common shareholders a quarterly distribution payable 80% in stock and only 20% in cash.
Despite this performance, the management team has been richly rewarded…
Since NXDT shareholders approved a long-term incentive plan on January 230, 2023, the Company granted 1,637,269 Restricted Stock Unites to its trustees and officers and other employees of the Advisor (603,482 Restricted Stock Units in 2023 and 1,033,787 Restricted Stock Units in the first six months of 2024).
Additionally, affiliates of James Dondero, NexPoint’s founder, have engaged in willful misconduct and breached their fiduciary duty, and Mr. Dondero and his affiliates are alleged to have engaged in fraudulent transfer of assets and self-dealing.
UBS Securities (“UBS”) filed a lawsuit in New York State Supreme Court against James Dondero, and several of his current or previous affiliates, claiming he schemed to prevent UBS from collecting $1.3 billion in judgments UBS obtained against entities managed indirectly by Highland Capital Management, L.P. See UBS Securities LLC v. Dondero, New York State Supreme Court, New York County.
The SEC issued an Order finding that Highland Capital Management LP, a now bankrupt investment firm co-founded by Dondero, willfully violated Section 206(3) of the Advisers Act. See Investment Advisers Act of 1940 Release No. 3939, Sept, 25, 2014.
A JAMS arbitration panel found that ACIS Capital Management GP, LLC breached its fiduciary duty while James Dondero was an officer. See Terry v. Highland Capital et al, JAMS Arbitration No. 1310022713.
Who should I contact with questions?
If you have any questions or require any assistance with voting your shares, please call the Trust’s proxy solicitor, Innisfree M&A Incorporated, at +1 (877) 750-9496 in the U.S. and Canada or +1 (412) 232-3561.
Additional information is also available at UDFforShareholders.com.
