RiverNorth Marketplace Lending Corporation (the “Fund”) announced that as part of a restructuring intended to broaden the Fund’s investment mandate, the Board of Directors of the Fund (the “Board”) has approved changes to the Fund’s principal investment strategy and name.
Effective as of April 15, 2020 the Fund’s name has been changed to RiverNorth Specialty Finance Corporation. The Fund’s common shares continue to trade under its existing New York Stock Exchange (“NYSE”) symbol “RSF”. The Fund’s preferred shares continue to trade under the NYSE symbol “RMPL”. CUSIP numbers for RSF and RMPL will not change. Further, the Fund’s investment objective, seeking a high level of current income, will remain the same.
Effective as of May 22, 2020, the following changes will be made to the Fund’s investment strategy:
Current Investment Strategy
New Investment Strategy
Under normal market conditions, invest, directly or indirectly at least 80% of its Managed Assets in marketplace lending investments.
Under normal market conditions, invest, directly or indirectly in credit instruments, including a portfolio of securities of specialty finance and other financial companies that the Fund's Advisor believes offer attractive opportunities for income.
“We are very enthusiastic about the broadening of the Fund’s investment strategy,” said Patrick Galley, Chief Executive Officer and Chief Investment Officer of RiverNorth Capital Management, LLC. “Expanding the investment mandate allows the Fund to diversify its portfolio to a broad range of credit-oriented products, with an emphasis on more liquid and tradeable products. Further, the current dislocation in the fixed income markets may prove advantageous by providing the opportunity to purchase what we view as more favorable securities based on their risk-return profile.”
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RiverNorth Capital Management, LLC is an investment management firm founded in 2000. With approximately $4.6 billion1 in assets under management as of February 29, 2020, RiverNorth specializes in opportunistic investment strategies in niche markets where the potential to exploit inefficiencies is greatest. RiverNorth is the investment manager to multiple registered and private funds, including the Fund.
Investing in Shares of the Fund involves certain risks, including loss of principal, that are described in the “Risks” section of the Fund’s prospectus, including the following:
Shares of closed-end investment companies frequently trade at a discount to their net asset value and initial offering price.
The Fund is classified as non-diversified, which means the Fund may invest a larger percentage of its assets in the securities of a smaller number of issuers than a diversified fund. Investment in securities of a limited number of issuers exposes the Fund to greater market risk and potential losses than if its assets were diversified among the securities of a greater number of issuers.
If a borrower of a marketplace loan is unable to make its payments on a loan, the Fund may be greatly limited in its ability to recover any outstanding principal and interest under such loan, as (among other reasons) the Fund may not have direct recourse against the borrower or may otherwise be limited in its ability to directly enforce its rights under the loan, whether through the borrower or the platform through which such loan was originated, the loan may be unsecured or under-collateralized, and/or it may be impracticable to commence a legal proceeding against the defaulting borrower.
The marketplace lending instruments in which the Fund may invest will not typically be guaranteed or insured by any third-party and will not typically be backed by any governmental authority. Prospective borrowers supply a variety of information regarding the purpose of the loan, income, occupation and employment status (as applicable) to the lending platforms. As a general matter, platforms do not verify the majority of this information, which may be incomplete, inaccurate, false or misleading. Prospective borrowers may misrepresent any of the information they provide to the platforms, including their intentions for the use of the loan proceeds. Marketplace lending instruments are generally not rated by the nationally recognized statistical rating organizations (“NRSROs”). Such unrated instruments may be comparable in quality to securities falling into any of the ratings categories used by such NRSROs. Accordingly, certain of the Fund’s unrated investments could constitute a highly risky and speculative investment, similar to an investment in “junk” bonds. At any given time, the Fund’s portfolio may be substantially illiquid and subject to increased credit and default risk. As a result of the foregoing and other risks described in the Fund’s prospectus, an investment in the Fund is considered to be highly speculative. The marketplace lending instruments in which the Fund may invest may have varying degrees of credit risk and the Fund will not be restricted by any borrower credit criteria or credit risk limitation. There can be no assurance that payments due on underlying marketplace loans will be made.
The Fund’s investment objectives, risks, charges and expenses must be considered carefully before investing. The Fund’s prospectus and most recent periodic reports contain this and other important information about the investment company, and may be obtained by visiting rivernorth.com/literature or by calling 844.569.4750. Read the Prospectus carefully before investing.
The default history for marketplace lending is limited and future defaults may be higher than historical defaults.
1 Firm AUM reflects Managed Assets, which includes assets attributable to leverage.
ALPS Distributors, Inc. Member FINRA.
Chris Lakumb, CFA, CAIA,