TwentyFour Income Fund - Publication of Circular

21 August 2025

TwentyFour Income Fund Limited

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA, ANY MEMBER STATE OF THE EEA OR ANY OTHER JURISDICTION WHERE TO  DO  SO  WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.

 Publication of Circular

TwentyFour Income Fund Limited (the “Company”), the FTSE 250 listed investment company targeting less liquid, higher yielding UK and European asset-backed securities, announces the publication of a Circular (the “Circular”) relating to its 3-yearly Realisation Opportunity.

Background

On the IPO of the Company, in 2013, the Board put in place a number of measures to help manage the possibility of its Ordinary Shares trading at a discount to NAV. One such discount control provision is that the Articles provide for a three-yearly Realisation Opportunity under which Shareholders may elect to realise all or part of their holdings of Ordinary Shares with effect from the applicable Reorganisation Date of the Company, regardless of the discount (or premium) to NAV at which the Ordinary Shares may then be trading. The Realisation Opportunity mechanism provides liquidity in size, if required, and the ability to sell Ordinary Shares at near to NAV (a 2 per cent. discount) even if the Ordinary Shares are trading at a wider discount (but the Realisation Opportunity will take place every three years irrespective of whether the Ordinary Shares are trading at a discount or premium to NAV). 

Since IPO, the Ordinary Shares have traded on average at a 1.1 per cent. premium to NAV. The Ordinary Shares over the last three months have traded at a 1.7 per cent. premium to NAV and due to the ongoing demand for Ordinary Shares the Company has been issuing new Ordinary Shares to satisfy such demand at a 2 per cent. premium to NAV. The Company has issued 21.2 million Ordinary Shares during the calendar year-to-date, against a wider market backdrop of very subdued issuance, making the Company one of the top investment company issuers of equity for this period. As a result, the current Ordinary Share price premium to NAV is superior to the 2 per cent discount that Shareholders would achieve if they seek to realise their Ordinary Shares through a Realisation Election made under the 2025 Realisation Opportunity.

Under two of the three Realisation Opportunities previously initiated by the Company (held in 2016 and 2022), elections from Shareholders to realise their investment in the Company were outweighed by demand for new issuance from new and existing investors, leading the Company to issue new Ordinary Shares.

The Directors and the Portfolio Manager do not intend to make a Realisation Election to realise their Ordinary Shares, or Ordinary Shares managed on behalf of other entities, and will not participate in the 2025 Realisation Opportunity.

Concerning the 2025 Realisation Opportunity, Shareholders have the option to either:

1. do nothing, and retain their current investment in the Company; or
2. realise their investment in the Company by making a Realisation Election, which will either see their Ordinary Shares:

(i)                  satisfied for cash at the Realisation Price, representing a 2 per cent. discount to the NAV per Ordinary Share as at the Pricing NAV Determination Date; or

(ii)                converted into a potentially smaller and more illiquid Realisation Share class (depending on the total number of Realisation Elections made, if any).

Once submitted, Realisation Elections cannot be changed. They will be processed as outlined in the Circular, even if the market price of the Ordinary Shares or NAV per Ordinary Share changes between the time Shareholders submit their election and the Pricing NAV Determination Date. Shareholders which elect to realise some or all of their investment when the market price of the Ordinary Shares is higher than the NAV per Ordinary Share, or trading at less than a 2 per cent. discount to NAV, are likely to receive less through the 2025 Realisation Opportunity than they would by selling their Ordinary Shares on the open market (as described under the “Illustrative Example” below).

Further information describing the above in detail can be found in Section B of Part II of the Circular. All Shareholders, especially those that are considering making a Realisation Election, are encouraged to read the Circular in its entirety, including the section titled "Risk Factors".

The Directors and the Portfolio Manager do not intend to make a Realisation Election to realise their Ordinary Shares, or Ordinary Shares managed on behalf of other entities, and will not participate in the 2025 Realisation Opportunity.

Action to be taken (if any) under the 2025 Realisation Opportunity

Shareholders who wish to maintain their Shareholding in the Company (and as such do not wish to participate in the 2025 Realisation Opportunity) are not required to take any action. ONLY IF a Shareholder wishes to make a Realisation Election in respect of their Shareholding should they complete the Form of Election sent to Shareholders. 

Illustrative Example

Based on the current NAV per Ordinary Share as at the close of business on 15 August 2025 (being the latest practicable date prior to the publication of the Circular for the purposes of the Company’s published NAV per Ordinary Share) (the "Latest Practicable Date") and the Ordinary Share price as at 19 August 2025, Shareholders that wish to realise their Shareholding are likely to be able to sell their Shareholding on the stock market at a higher price than is expected to be offered under the 2025 Realisation Opportunity (being the Realisation Price). Please see below an illustrative example prepared on this basis.

For illustrative purposes only:  

• Had the Pricing NAV Determination Date been the close of business on the Latest Practicable Date, the illustrative realisation price would be 108.08 pence per Ordinary Share (since the Net Asset Value per Ordinary Share as at the Latest Practicable Date was 110.29 pence per Ordinary Share).
• The quoted bid price of an Ordinary Share as at 19 August 2025 was 111.6 pence (being the price for which Shareholders could sell their Ordinary Shares on the stock market).

Based on the illustrative example above, a Shareholder electing to realise their Ordinary Shares under the 2025 Realisation Opportunity would receive in cash 108.08 pence per Ordinary Share. In other words, a Shareholder would receive for each Ordinary Share 3.52 pence less than the quoted bid price as at 19 August 2025, based on the illustrative Latest Practicable Date statistics.

The figures above are illustrative only and do not represent forecasts. The Net Asset Value per Ordinary Share and quoted bid price of an Ordinary Share may each change materially between the date of the Circular and the actual Pricing NAV Determination Date (close of business on 21 October 2025) as a result of, inter alia, changes in the value of the Company’s investments and market conditions. Therefore, Shareholders should re-evaluate these figures when considering whether to make a Realisation Election. The Net Asset Value per Ordinary Share and quoted bid price of an Ordinary Share may also each change materially between the date on which a Shareholder makes a Realisation Election and the Pricing NAV Determination Date and Shareholders should note that once submitted, Realisation Elections cannot be changed.

Company Performance

Since its IPO in 2013, the Company has delivered strong performance for Shareholders, through both NAV total return and income return to Shareholders via dividend payments.

• The NAV total return of the Company from launch to close of business on 19 August 2025, being the latest practicable date prior to the publication of the Circular for these purposes, was 163.9 per cent., or 8.1 per cent. per annum, which compares favourably with the Company’s target annual total return of 6 to 9 per cent. per annum.

• The income return to Shareholders has been ahead of the Company’s targets since launch. The IPO Prospectus stated a target annual dividend of at least 5p per Ordinary Share in respect of the period to 31 March 2014 and at least an annual dividend of 6p per Ordinary Share thereafter. This annual target dividend was raised to 7p per Ordinary Share in respect of and from the quarter ended 30 September 2022 and increased further to 8p per Ordinary Share in respect of and from the quarter ended 31 March 2023[1]. The Company has met these targets by paying the following dividends:

• The Ordinary Shares have predominantly traded at a premium or at a small discount to NAV since launch (the Company’s average premium since launch being 1.1 per cent.), reflecting net demand in the market from a broad range of existing and new investors. The average premium to NAV was 1.74 per cent. in the three months leading up to 19 August 2025.
• Since its IPO in 2013, the Company has grown significantly in size from an initial market capitalisation of approximately £150 million, to a FTSE 250 company with a market capitalisation of approximately £860 million as at 19 August 2025. The Company’s performance and prospects have been reflected in demand for new issuance in recent periods, with the Company having issued 21.2 million new Ordinary Shares in aggregate in the calendar year-to-date.

Market Context

2025 to date has represented another strong period for global risk assets, as central banks have continued on a rate-cutting cycle and demand proved resilient. The path, however, was not smooth, as escalating geopolitical tensions stirred investors, with market sentiment being driven by a number of events, including but not limited to, the war in Ukraine, tensions in the Middle East, import tariffs and a resulting possible China-US trade war. This has led to more volatility in credit and rates markets, and while ABS and CLOs have not been immune to this, they have outperformed most parts of the fixed income market, not least due to the floating rate nature of these asset classes. The Company believes that UK and European ABS and RMBS, as well as global CLOs, continue to offer attractive, risk-adjusted returns.

Fundamental performance has remained solid for the majority of transactions in the European ABS market, with lower rates, positive wage growth and increasing house prices offsetting the negative effects of higher living costs and weakening labour markets. Ratings and underlying asset performance were generally strong, remaining well within investor tolerance, with record-breaking issuance levels for ABS. While overall performance has remained stable, there is an increasing level of divergence between prime or bank lenders compared to non-prime borrowers, especially in auto and consumer loans. Although the non-prime market in Europe is relatively small, it is notable that non-prime borrowers have shown to be more sensitive to an economic slowdown. The Company has continued to focus on larger lenders with long track records, where the increase in arrears has remained well within base case expectations and where liquidity has generally been best.

The Company continues to favour European CLOs, where fundamental performance has been better than expected, with relatively low levels of corporate defaults and a high level of loan refinancings, which has helped push the maturity profile of the European leveraged loan market out to 2028-2032. The Company currently sees the best relative value in European CLOs and has the majority of its European exposure in BB and B rated bonds.

Following a period of relatively high interest rates, the Federal Reserve ("Fed"), Bank of England ("BoE") and European Central Bank ("ECB") have started cutting interest rates as inflation moved closer to their target levels. The ECB has cut the ECB Deposit rate from 4 per cent. to 2 per cent. which has positively increased the interest coverage ratio for European borrowers in the leverage loan market, the collateral for CLOs.

Key interest rates set by the BoE and the Fed are expected to remain elevated as both central banks are focussed on inflation levels which, due to the tariffs proposed or imposed by President Trump and any counter measures by other jurisdictions, are at risk of increasing. A higher bank base rate for a prolonged period of time should be beneficial for the Company due to the floating rate nature of its investments.

The Portfolio Manager expects the strong performance of transactions to continue in the medium term and sees the best value in Western European secured assets (RMBS, auto ABS and CLOs) and expects that the market will continue to grow at a similar pace to recent years as banks and other lenders continue to focus on the ABS market for both funding and capital related transactions.

The Portfolio Manager also expects spreads to remain relatively stable in the short to medium term. While volatility could stay elevated, because of heightened geopolitical tensions, the consistent high income provided by ABS and CLOs should remain a key driver of outperformance for the Company’s target asset class compared to traditional fixed rate bonds. The current environment continues to warrant liquidity and flexibility, and should an escalating global trade war result in extended market volatility, the Company believes this could offer an attractive opportunity to use this liquidity to enhance the Company's income.

Outside the Company’s current European focus, the US CLO market, the largest globally with over $1 trillion in outstanding issuance, continues to offer attractive risk-adjusted returns, particularly in mezzanine tranches. The underlying loan collateral remains diversified across sectors and is supported by a resilient US economy and benign default environment. Recent spread widening, driven by technical dislocations rather than fundamental credit deterioration, provides an opportunity to access CLO securities with strong cash flow potential and structural protections.

Australian RMBS remain among the highest-quality mortgage-backed securities globally, benefiting from a strong legal framework, full recourse lending, and conservative underwriting standards. Despite broader global macro uncertainty, Australian household balance sheets remain robust, with low arrears and high levels of mortgage serviceability. Spread premiums in this sector remain elevated compared to historical norms, particularly for non-bank originations, creating an attractive entry point for long-term investors seeking income and credit stability.

The Company believes that both sectors provide complementary exposures that enhance portfolio diversification while offering potential for capital and income generation. Allocations to these asset classes will continue to be guided by the Portfolio Manager’s disciplined credit selection process and focus on downside protection.

Accordingly, the Company and the Portfolio Manager see current market conditions as an excellent opportunity to continue to add value for Shareholders at attractive yields. Furthermore, as the market continues to develop and expand, opportunities may present themselves that would be outside of the current investment universe. It is expected that the Prospectus will contain details of proposed updates to the Company’s investment policy.

Expected timetable

Notes:

1. References to times above and in the Circular generally are to London time unless otherwise specified.

2. All times and dates in the expected timetable and in the Circular may be adjusted by the Company. Any changes to the timetable will be notified via an RIS.

Unless otherwise defined, capitalised words and phrases used in this announcement shall have the meaning given in the Circular.

For further information, please contact:

Deutsche Numis, Corporate Broker and Financial Adviser:

Hugh Jonathan   +44 (0)20 7260 1000

Matt Goss

TwentyFour Income Fund Limited:

Alistair Wilson  +44 (0)20 7015 8900

JPES Partners, PR Adviser:

Charlotte Walsh  +44 (0)20 7520 7620

About the Company:

The Company is a FTSE 250 listed investment company, which aims to generate attractive risk-adjusted returns, principally through income distributions, by investing in a diversified portfolio of UK and European asset-backed securities.

The Company is a non-cellular company limited by shares incorporated in Guernsey under the Companies (Guernsey) Law 2008, as amended, with registered number 56128 and registered as a Registered Closed-ended Collective Investment Scheme with the Guernsey Financial Services Commission.

The Company’s LEI is: 549300CCEV00IH2SU369

Visit the Company’s website at www.twentyfourincomefund.com for more information.

IMPORTANT INFORMATION

Nothing in this announcement shall form the basis of or constitute any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for any shares or any other securities nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with, any contract therefor.

Nothing contained herein constitutes or should be construed as: (i) investment, tax, financial, accounting or legal advice; (ii) a representation that any investment or strategy is suitable or appropriate to individual circumstances; or (iii) a personal recommendation.  Investors should consult their own legal, business, tax and other advisers in evaluating any investment opportunity.

Deutsche Bank AG is a stock corporation (Aktiengesellschaft) incorporated under the laws of the Federal Republic of Germany with its principal office in Frankfurt am Main. It is registered with the local district court (Amtsgericht) in Frankfurt am Main under No HRB 30000 and licensed to carry on banking business and to provide financial services. The London branch of Deutsche Bank AG is registered as a branch office in the register of companies for England and Wales at Companies House (branch registration number BR000005) with its registered branch office address and principal place of business at 21, Moorfields, London EC2Y 9DB. Deutsche Bank AG is subject to supervision by the European Central Bank (ECB), Sonnemannstrasse 22, 60314 Frankfurt am Main, Germany, and the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht or BaFin), Graurheindorfer Strasse 108, 53117 Bonn and Marie-Curie-Strasse 24-28, 60439 Frankfurt am Main, Germany. With respect to activities undertaken in the United Kingdom, Deutsche Bank AG is authorised by the Prudential Regulation Authority. It is subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. Details about the extent of Deutsche Bank AG’s authorisation and regulation by the Prudential Regulation Authority are available from Deutsche Bank AG on request.

Deutsche Bank AG, London Branch, which is trading for these purposes as Deutsche Numis (“Deutsche Numis”) is acting exclusively for the Company and no other person in connection with the 2025 Realisation Opportunity (whether or not a recipient of this announcement or the Circular). and will not be responsible to any person other than the Company for providing the protections offered to clients of Deutsche Numis nor for providing advice in relation to any matter referred to herein or in the Circular. Neither Deutsche Numis nor any of its affiliates (nor any of their respective directors, officers, employees or agents), owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Deutsche Numis in connection with this document, any statement contained herein or in the Circular or otherwise.

This announcement does not constitute an offer or solicitation to acquire or sell any securities of the Company. This announcement is not for distribution in or into the United States or to any US Person, Australia, Canada, Japan, New Zealand, the Republic of South Africa, any European Economic Area state or any other jurisdiction in which its distribution may be unlawful. A “US Person” is any person who is not a “Non-United States Person” as defined in US Commodity Futures Trading Commission Rule 4.7. This announcement is not an offer of securities for sale in the United States or elsewhere. The securities of the Company have not been and will not be registered under the United States Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States unless registered under the Securities Act or pursuant to an exemption from such registration. The Company has not been and will not be registered under the US Investment Company Act of 1940, as amended, and investors are not entitled to the benefits of that Act. There has not been and there will be no public offering of the Company's securities in the United States.