GCP Asset Backed Income Fund Announces Fourth Mandatory Share Redemption of £45 Million

Fourth Capital Distribution Advances Shareholder Return Strategy

GCP Asset Backed Income Fund Limited confirms its commitment to proceed with a fourth compulsory partial redemption as part of its strategic capital return programme. The £45.0 million redemption continues the company’s dedication to timely capital returns while managing an orderly wind-down of its portfolio. This follows the Discontinuation Vote in May 2024, which initiated the planned asset realisation and systematic return of proceeds to investors.

The redemption price of 68.63875 pence per share is based on the net asset value per ordinary share as of 30 June 2026, which was 70.22 pence, minus dividends declared on 17 July 2026. The Board confirmed that estimated costs and expenses of approximately £35,000 have been deducted from the distribution. The anticipated 38.14% redemption ratio will be applied pro rata across all shareholders, ensuring fair treatment based on proportional holdings.

Portfolio Structure and Asset-Backed Loan Focus

GABI operates as a closed-ended investment company on the London Stock Exchange’s Main Market. Its investment objective centers on a managed wind-down and orderly realisation of all assets. The portfolio primarily consists of UK-based asset-backed loans characterized by contracted, predictable medium to long-term cash flows and often secured by underlying physical assets.

This asset-backed loan structure provides visibility over future cash generation, enabling disciplined capital return execution. The focus on UK assets aligns with the domestic financial market, benefiting from established legal frameworks and transparent asset valuations.

Progress in Wind-Down and Share Capital Reduction

Since initiating its capital return strategy, GABI has completed three prior compulsory share redemptions and treasury share cancellations, reducing share capital by 61.11%. Before this fourth redemption, £221.6 million had been returned to shareholders. The additional £45.0 million distribution brings total capital returned to £266.6 million, reflecting substantial progress against the company’s wind-down goals.

Shares outstanding have decreased accordingly, with 171,903,104 ordinary shares as of 22 July 2026. Post-redemption, approximately 65.56 million shares will be cancelled, permanently reducing share capital and removing these shares from circulation.

Redemption Process and Shareholder Record Date

The fourth compulsory redemption will be applied pro rata to shareholders on the register at the close of business on 31 July 2026, the Redemption Date. The 38.14% redemption ratio ensures equitable participation. Fractional shares resulting from the ratio will not be redeemed; shares will be rounded down to the nearest whole number.

Redemption payments are expected by 14 August 2026. Shareholders with uncertificated shares will receive proceeds via CREST, while certificated shareholders will be paid by cheque. New share certificates will be issued to certificated shareholders by this date to reflect reduced holdings.

CREST and ISIN Updates Post-Redemption

Following the redemption, GABI’s ordinary shares will be disabled in CREST after business on 31 July 2026. The current ISIN JE00BPCSN748 will expire on that date. A new ISIN, JE00BVMWGC49, will be activated from 8:00 a.m. on 3 August 2026 to facilitate trading of the reduced share base.

The ticker symbol "GABI.L" will remain unchanged throughout. Shares will trade under the old ISIN until the Redemption Date, with CREST automatically transferring any outstanding transactions to the new ISIN to ensure smooth settlement continuity.

Potential Increase in Redemption Amount from Additional Loan Repayments

The Board retains discretion to increase the fourth redemption amount if additional loan repayments are received before 31 July 2026. Any increase would raise both the total redemption distribution and the pro rata redemption ratio, with timely announcements to shareholders.

This flexibility reflects the nature of the asset-backed loan portfolio, which may generate accelerated repayments or early redemptions. Management aims to maximize shareholder returns by distributing any extra cash promptly rather than retaining excess capital.

Chairman’s Statement on Capital Return Progress

Alex Ohlsson, Chairman of GCP Asset Backed Income Fund Limited, stated, "We are pleased to announce a fourth capital distribution of £45.0 million, reflecting our objective to return capital to shareholders promptly while managing the orderly wind-down of the portfolio."

He added, "The four distributions to date, totaling £266.6 million returned to shareholders, mark significant progress in achieving our wind-down goals." This highlights management’s focus on delivering value through systematic distributions while continuing the realisation process.

Impact on Share Capital and Market Liquidity

The fourth compulsory redemption will further reduce share capital from 171,903,104 shares to approximately 106,343,104 shares outstanding post-redemption. This ongoing contraction aligns with the company’s managed wind-down strategy.

While the reduction in shares may affect trading liquidity and market depth, it is an expected outcome of the orderly capital return programme. Investors should note the company’s transitional operational model, aiming for full asset realisation and eventual cessation of operations.

Sector Overview and Asset-Backed Loan Market

GABI operates in the specialist closed-ended investment company sector, focusing on asset-backed loan portfolios. This market segment has seen strong investor interest due to predictable cash flows and collateral security. The company’s UK-centric portfolio benefits from robust regulatory and legal frameworks.

The structured nature of asset-backed loans provides greater certainty in forecasting realisation timelines and cash availability compared to equity or opportunistic investments. GABI’s systematic capital return approach leverages these characteristics to deliver planned shareholder distributions.