{"id":12910,"date":"2024-11-06T00:32:17","date_gmt":"2024-11-06T06:32:17","guid":{"rendered":"https:\/\/1reason.com\/re\/udf-iv-highlights-underperformance-of-nexpoints-own-fund-in-letter-to-shareholders\/12910\/"},"modified":"2024-11-06T18:32:17","modified_gmt":"2024-11-07T00:32:17","slug":"udf-iv-highlights-underperformance-of-nexpoints-own-fund-in-letter-to-shareholders","status":"publish","type":"post","link":"https:\/\/1reason.com\/re\/udf-iv-highlights-underperformance-of-nexpoints-own-fund-in-letter-to-shareholders\/12910\/","title":{"rendered":"UDF IV Highlights Underperformance of NexPoint\u2019s Own Fund in Letter to Shareholders"},"content":{"rendered":"
17, 2024 (GLOBE NEWSWIRE) — United Development Funding IV (\u201cUDF IV\u201d or the \u201cTrust\u201d) mailed a letter to shareholders raising concerns regarding NexPoint Real Estate Opportunities, LLC, an indirect subsidiary of NexPoint Diversified Real Estate Trust (NXDT), and its affiliates\u2019 (collectively, \u201cNexPoint\u201d) poor track record of managing NexPoint\u2019s own fund. The letter asks that shareholders carefully consider what NexPoint\u2019s actions to date could mean for the future of their investments in UDF IV before voting their shares ahead of the Annual Meeting of Shareholders to be held later this year. <\/p>\n

The letter to shareholders and other important information regarding the Trust\u2019s ongoing commitment to protect and promote shareholders\u2019 interests and long history of cash distributions, including UDF IV\u2019s proxy materials for the Annual Meeting of Shareholders, can be found at UDFforShareholders.com<\/a>. The Trust urges shareholders to support the Board that is working to enhance shareholder value by voting on the WHITE<\/u><\/strong> proxy card \u201cFOR\u201d the Board\u2019s nominees – Steven J. Finkle, Lawrence S. Jones, J. Heath Malone and Phillip K. Marshall. UDF IV shareholders should discard any green or other color proxy card sent by NexPoint.<\/p>\n

The full text of the letter to shareholders follows:<\/p>\n

Dear UDF IV Shareholders,<\/p>\n

Your United Development Funding IV (\u201cUDF IV\u201d or the \u201cTrust\u201d) Board of Trustees and management team have acted and will continue to act to protect and promote the interests of the Trust\u2019s shareholders.<\/p>\n

Since reinstating distributions in the third quarter of 2019, the Trust has paid cash distributions of approximately $41.9 million, or approximately $1.37 per share, to shareholders. Since the fund\u2019s inception, cash distributions paid to shareholders total approximately $189.7 million, equating to approximately $6.19 per share.<\/strong><\/p>\n

Despite the UDF IV Board and management team\u2019s work to protect and enhance the value of your investment, NexPoint Real Estate Opportunities, LLC, an indirect subsidiary of NexPoint Diversified Real Estate Trust (NXDT), and its affiliates (collectively, \u201cNexPoint\u201d) are attempting to remove your Board Trustees and replace them with a hand-picked slate of nominees to advance NexPoint\u2019s self-serving interests. Your vote ahead of the Annual Meeting of Shareholders (the \u201cAnnual Meeting\u201d) to be held later this year will determine the future of your investment in UDF IV.<\/p>\n

Based on its actions, we believe NexPoint\u2019s true motive is to take control of the Trust and its assets in an effort to extract value for itself at the expense of all other shareholders. To date, NexPoint has not presented any viable plan to enhance value for shareholders. If and when such a plan is presented, and before voting your shares,<\/strong> we ask that you carefully consider how NexPoint has managed its own fund – NXDT:<\/strong><\/p>\n

LOSSES HAVE MOUNTED FOR NXDT<\/u><\/strong><\/p>\n

According to its own financial reports, over the past 2 years, NXDT has lost over $230 million.<\/strong>1<\/strong><\/sup><\/p>\n