As filed with the Securities and Exchange Commission on June 11, 2012
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-22358
Rochdale Structured Claims Fixed Income Fund, LLC
(Exact name of registrant as specified in charter)
570 Lexington Avenue
New York, New York 10022-6837
(Address of principal executive offices) (Zip code)
Kurt Hawkesworth
570 Lexington Avenue
New York, New York 10022-6837
(Name and address of agent for service)
(800) 245-9888
Registrant's telephone number, including area code
Date of fiscal year end: September 30
Date of reporting period: March 31, 2012
Item 1. Reports to Stockholders.
Rochdale Structured Claims Fixed Income Fund (RSCFIF)
Semi-Annual Report
Semi-Annual Report
March 31, 2012
Dear Fellow Shareholders,
The Rochdale Structured Claims Fixed Income Fund (“RSCFIF” or the “Fund”) offers an opportunity for portfolio diversification, through an investment in a pool of structured legal settlements, with an investment objective that seeks safety of principal and above average current income. The Fund is collateralized by a note secured by cash flows from a diversified pool of annuities, purchased to cover structured legal settlements that have been acquired through a formal legal process from the claimant. Investment returns are generated by the interest income of cash flow payments received from each underlying annuity.
For the six months ended March 31, 2012, the Fund returned 3.41% and is on track to generate the approximate 7% interest income expected at inception. In addition, the Fund received monthly distribution of capital payments consistent with the planned cash flows during the period.
While we believe the U.S. economy is on a moderately positive and self-sustaining growth path for the rest of 2012, there are a number of uncertainties presently that have raised concern among fixed income investors. One such concern is the fact that U.S. Treasuries, although nominally safe, are paying too low of a yield of 1.7% due to the policy actions taken by the Federal Reserve. As a result, we believe the nominal safety of U.S. Treasuries is not worth the investment risks of earning a substandard return for longer term bonds.
We are also all focusing on the troubles with Greece and other European country government bonds, and indications are that many will have to be restructured at some point in the future. Indeed, the day of reckoning seems to be the only uncertainty. The U.S. too has generated concern about large ongoing budget deficits, and is a matter of simple economics that a government which takes in 1 trillion dollars less in revenues than it is currently paying out, has to make some very significant choices in the next few years.
Unfortunately, given what we know about politics, we have no confidence that the spending and tax decisions necessary to get our fiscal house in order will be made before the 2012 elections. Rather, we believe it will be investors in U.S. government bonds who ultimately are the most influential force in bringing about action on the U.S. deficit. Until then, more years of accumulating debt will occur before real reform on spending and taxes are made.
In light of the above, the stability and known values of the Fund’s cash flows makes RSCFIF an ideal fixed income holding for such uncertain times. Compared to equivalent fixed income or annuities, the 7.0% fixed yield from RSCFIF provides above average levels of current income with low volatility. Overall, RSCFIF seeks to bring preservation of principal, reliability of cash flows, and high yield to a portfolio. The Fund is backed by well-diversified, investment grade
570 Lexington Avenue, New York, NY 10022-6837 | Tel. 800-245-9888/212-702-3500 | Fax 212-702-3535 | www.rochdale.com
San Francisco | Orlando | Dallas | Richmond
insurance companies, which are, in our view, highly secured. In addition, we believe that adding stable non-equity, non-traditional investments provides significant diversification benefits to the equity portion of a portfolio during downside markets.
Regards,
Garrett R. D’Alessandro, CFA, CAIA, AIF®
Chief Executive Officer & President
Important Disclosures
Performance quoted represents past performance and is unaudited. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate, so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. The most recent month end performance can be obtained by calling 800-245-9800.
An investor should consider carefully the Fund’s investment objectives, risks, charges, and expenses. The Private Offering Memorandum contains this and other important information about the investment company, and it may be obtained by calling 800-245-9800. Please read it carefully before investing. RIM Securities LLC, the affiliated broker dealer for Rochdale Investment Management LLC and the Distributor of the Fund, 570 Lexington Avenue, New York, NY 10022.
The views expressed herein represent the opinions of Rochdale Investment Management and are subject to change without notice at anytime. This information should not in any way be construed to be investment, financial, tax, or legal advice or other professional advice or service, and should not be relied on in making any investment or other decisions.
Certain information may be based on information received from sources Rochdale Investment Management considers reliable; Rochdale Investment Management does not represent that such information is accurate or complete. Certain statements contained herein may constitute “projections,” “forecasts” and other “forward-looking statements” which do not reflect actual results and are based primarily upon applying retroactively a hypothetical set of assumptions to certain historical financial information. Any opinions, projections, forecasts and forward-looking statements presented herein are valid only as of the date of this document and are subject to change.
Investing in the Rochdale Structured Claims Fixed Income Fund is a riskier investment compared to investing in traditional fixed income products such as U.S. Treasuries. Unlike U.S. Treasuries, the Fund’s underlying security is not backed by the full faith and credit of the United States government and does not trade in a highly liquid and active market.
As with all investment strategies, there are risks associated with its implementation. Applicable risks include, but are not limited to, market risk, inflation risk, credit risk, and government policy risk. There is no guarantee that investment objectives will be met and the entire investment may be lost.
Rochdale Structured Claims Fixed Income Fund is considered a long term investment with limited liquidity and should not be invested in by investors whose objectives conflict with these characteristics. The limited liquidity of the Fund, due to the absence of a public market and a current investor’s limited transfer options to other investors, results in the lack of available market prices during the life of the Fund. Valuation will be provided as detailed in the Private Offering Memorandum and may be inaccurate and may also affect the value and expenses of the Fund. The Fund invests in a single issuer note, making it a non-diversified fund and more susceptible than a diversified fund to any single economic, financial, insurance industry, political or regulatory occurrence that may affect annuities, insurance companies or the Special Purpose Entity (“SPE”) structure. Performance and likelihood of future payments depend on factors such as the business standing of the SPE and its affiliates, the insurance companies, ratings of the insurer, federal and state regulation as well as human error during the transfer process.
Rochdale Structured Claims Fixed Income Fund, LLC
Semi-Annual Report
March 31, 2012
Rochdale Structured Claims Fixed Income Fund, LLC
Semi-Annual Report
March 31, 2012
TABLE OF CONTENTS
Page | |||
Financial Statements | |||
2 | |||
3 | |||
4 | |||
5 | |||
6-13 | |||
14 | |||
15 | |||
Rochdale Structured Claims Fixed Income Fund, LLC
March 31, 2012 (Unaudited)
ASSETS: | ||||
Investments in Securities: 101.3% | ||||
Asset Backed Security: 100.5% | ||||
Crescit Eundo Finance I, LLC Note, 8.10%, Series 2009-A, February 15, 2040;(1)(2)(3) at value (cost $35,774,523) | $ | 35,774,523 | ||
Short-Term Investments: 0.8% | ||||
First American Government Obligations Fund, 0.02%(4) (cost $270,537) | 270,537 | |||
Total Investments in Securities (cost $36,045,060)(5) | 36,045,060 | |||
Interest receivable | 128,791 | |||
Prepaid expenses | 7,188 | |||
Total assets | 36,181,039 | |||
LIABILITIES: | ||||
Distribution payable | 255,650 | |||
Payable to Advisor(6) | 292,137 | |||
Accrued expenses and other liabilities | 45,110 | |||
Total liabilities | 592,897 | |||
NET ASSETS | $ | 35,588,142 | ||
ANALYSIS OF NET ASSETS | ||||
TOTAL MEMBERS’ PAID IN CAPITAL | $ | 35,588,142 | ||
Capital Units outstanding | ||||
(Unlimited number of Units authorized, no par value) | 38,994 | |||
Net asset value, offering and redemption | ||||
price per Unit (net assets/Units outstanding) | $ | 912.67 |
(1) | Illiquid security. |
(2) | Fair valued by Valuation Committee as delegated by the Fund’s Board of Managers. |
(3) | Restricted security. |
(4) | 7-Day yield. |
(5) | Tax cost of investments is the same. |
(6) | Includes offering costs payable which the Advisor paid on behalf of the Fund. |
The accompanying notes are an integral part of these financial statements.
2
Rochdale Structured Claims Fixed Income Fund, LLC
INVESTMENT INCOME: | ||||
Interest Income | $ | 1,459,610 | ||
EXPENSES: | ||||
Advisory fees | 44,910 | |||
Service fees | 44,910 | |||
Fund accounting and fund administration fees | 46,201 | |||
Registration expense | 3,985 | |||
Audit fees | 17,502 | |||
Custody fees | 1,500 | |||
Legal fees | 17,800 | |||
Directors fees | 8,100 | |||
Insurance expense | 3,599 | |||
Miscellaneous | 675 | |||
Total Expenses | 189,182 | |||
Add expenses recouped (see Note 4) | 62,312 | |||
Net Expenses | 251,494 | |||
NET INVESTMENT INCOME | $ | 1,208,116 |
The accompanying notes are an integral part of these financial statements.
3
Rochdale Structured Claims Fixed Income Fund, LLC
Six Months Ended | Year Ended | |||||||
March 31, 2012 (1) | September 30, 2011 | |||||||
FROM OPERATIONS | ||||||||
Net investment income | $ | 1,208,116 | $ | 2,518,536 | ||||
Net increase in members’ capital resulting from operations | 1,208,116 | 2,518,536 | ||||||
DISTRIBUTIONS TO MEMBERS | ||||||||
From net investment income | (1,208,116 | ) | (2,518,536 | ) | ||||
From return of capital | (666,625 | ) | (1,955,139 | ) | ||||
Total distributions to members | (1,874,741 | ) | (4,473,675 | ) | ||||
INCREASE (DECREASE) FROM TRANSACTIONS IN MEMBERS’ CAPITAL | ||||||||
Proceeds from sales of members’ capital units | 150,000 | 500,000 | ||||||
Payments for purchases of members’ interests | (161,072 | ) | (498,561 | ) | ||||
Net (payments for) proceeds of members’ capital units | (11,072 | ) | 1,439 | |||||
Total decrease in members’ capital | (677,697 | ) | (1,953,700 | ) | ||||
MEMBERS’ CAPITAL | ||||||||
Beginning of period | 36,265,839 | 38,219,539 | ||||||
End of period | $ | 35,588,142 | $ | 36,265,839 |
(1) | Unaudited. |
The accompanying notes are an integral part of these financial statements.
4
Rochdale Structured Claims Fixed Income Fund, LLC
Six Months Ended March 31, 2012 (Unaudited)
CASH FLOW FROM OPERATING ACTIVITIES | ||||
Net increase in members’ capital resulting from operations | $ | 1,208,116 | ||
Adjustments to reconcile net increase in members’ capital resulting from operations to net cash from operating activities | ||||
Principal repayment of note receivable | 650,139 | |||
Change in operating assets and liabilities | ||||
Interest receivable | 2,338 | |||
Prepaid expenses | 14,308 | |||
Payable to Advisor(1) | (5,777 | ) | ||
Accrued expenses and other liabilities | (15,963 | ) | ||
Net cash from operating activities | 1,853,161 | |||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Proceeds from sales of members’ capital units | 150,000 | |||
Capital withdrawals | (161,072 | ) | ||
Distributions | (1,943,102 | ) | ||
Net cash used in financing activities | (1,954,174 | ) | ||
Net change in cash and cash equivalents | (101,013 | ) | ||
CASH AND CASH EQUIVALENTS | ||||
Beginning of period | 371,550 | |||
End of period | $ | 270,537 |
(1) | Includes offering costs payable which the Advisor paid on behalf of the Fund. |
The accompanying notes are an integral part of these financial statements.
5
Rochdale Structured Claims Fixed Income Fund, LLC
Notes to Financial Statements (Unaudited)
1. | Organization |
Rochdale Structured Claims Fixed Income Fund, LLC (the “Fund”) is a Delaware limited liability company registered under the Investment Company Act of 1940, as amended, as a closed-end, non-diversified, management investment company. The Fund’s investment objective is to seek a steady level of current income with low volatility through investment in promissory notes secured by interests in receivables from insurance companies related to structured settlements.
Rochdale Investment Management LLC (the “Advisor” or “Rochdale”) is an investment advisor registered under the Investment Advisers Act of 1940, as amended, to serve as the Advisor for the Fund.
Each Member must certify that they are a qualified investor or “accredited investor” under Federal securities law and subscribe for a minimum initial investment in the Fund of $25,000. Brokers selling units may establish higher minimum investment requirements than the Fund and may independently charge transaction fees and additional amounts in return for their services in addition to receiving a portion of the sales charge. The Fund is an illiquid investment and no Member will have the right to require the Fund to redeem its units. The existence of the Fund is not expected to be perpetual, but will instead be self-liquidating over time or sold, with an expected life of between seven and fifteen years from inception.
2. | Significant Accounting Policies |
The following accounting policies are in accordance with accounting principles generally accepted in the United States and are consistently followed by the Fund.
Security Valuation
The Fund invested substantially all of its investable assets in the 8.10% Fixed Rate Note, Series 2009-A, which is represented by one certificate (“Note”) issued by a special purpose entity, Crescit Eundo Finance I, LLC.
The value of the collateral underlying the Note depends on a number of factors unique to the structured settlement industry. These include, but are not limited to, the nature and quality of the underlying settlements; the ratings and creditworthiness of the annuity providers who are obligated under the terms of the underlying settlements, the terms which are, in turn, subject to court orders (or acknowledgment letters in the case of owned annuities) to remit payments to entities, including Settlement Funding, LLC, that are wholly-owned by Peach Holdings, LLC; the physical security of the documents that evidence the underlying settlements; and the extent to which the Fund may be assured that the Fund’s security interest in the collateral is properly perfected in accordance with the protections afforded secured creditors under Article 9 of the Uniform Commercial Code.
6
Rochdale Structured Claims Fixed Income Fund, LLC
Notes to Financial Statements (Unaudited)
2. Significant Accounting Policies (continued)
Security Valuation (continued)
The Fund’s Board has approved fair value procedures pursuant to which the Fund will value its investment in the Note. The fair value procedures recognize that the Note is illiquid and that no market currently exists for it, save for the potential that the Advisor may be able to effect a negotiated sale of the Note held by the Fund. The valuation shall be updated no less frequently than quarterly. These updates shall be based on various factors, as deemed appropriate by the Pricing Committee, including without limitation, the following:
(i) | Comparisons with other fixed income opportunities available in the credit markets and spreads, on a risk adjusted basis such as, without limitation: |
(a) | Swap rates: the variable rate available in a swap contract for the fixed rate payable under the Portfolio Note; |
(b) | Interest Rates: the Fed Funds rate (i.e. that amount the Federal Reserve charges banks for overnight borrowing) and other prevailing interest rates in the U.S.; |
(c) | Credit Ratings: the weighted average rating of the Annuity Providers issuing the annuity contracts which constitute the Receivables; and |
(d) | Subjective Factors: relative liquidity, creditworthiness and underlying collateral. |
(ii) | Information obtained by the Advisor from the issuer of the Portfolio Notes relating to the financial position of such issuer and relevant affiliates; |
(iii) | Cash flows payable by Annuity Providers under the Transaction Related Agreements; |
(iv) | Credit Ratings assigned to the various Annuity Providers; |
(v) | The occurrence of any significant market or company specific event that may affect the issuer, its affiliates, their capital structure (as contemplated under the terms of the transaction related documents) or the structured settlement industry; and |
(vi) | Reported changes, if any, in the quality of the underlying collateral as a result of changes in such ratings, the creditworthiness of the issuer, its affiliates or the Annuity Providers or specific factors that may affect the value of collateral. |
7
Rochdale Structured Claims Fixed Income Fund, LLC
Notes to Financial Statements (Unaudited)
2. Significant Accounting Policies (continued)
Security Valuation (continued)
The Fund follows fair valuation accounting standards which establish an authoritative definition of fair value and set out a hierarchy for measuring fair value. These standards require additional disclosures about the various inputs and valuation techniques used to develop the measurements of fair value and a discussion in changes in valuation techniques and related inputs during the period. These standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy is organized into three levels based upon the assumptions (referred to as “inputs”) used in pricing the asset or liability. These standards state that “observable inputs” reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from independent sources and “unobservable inputs” reflect an entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability. These inputs are summarized in the three broad levels listed below:
Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access.
Level 2 - Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Level 3 - Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in these securities.
8
Rochdale Structured Claims Fixed Income Fund, LLC
Notes to Financial Statements (Unaudited)
2. Significant Accounting Policies (continued)
Security Valuation (continued)
The following is a summary of the inputs used to value the Fund’s investments at March 31, 2012:
Description | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | ||||||||||||
Note | $ | - | $ | - | $ | 35,774,523 | $ | 35,774,523 | ||||||||
Short-Term Investment | 270,537 | - | - | 270,537 | ||||||||||||
$ | 270,537 | $ | - | $ | 35,774,523 | $ | 36,045,060 |
There were no significant transfers in or out of Level 1, 2 or 3 of the fair value hierarchy during the reporting period, as compared to their classification from the most recent annual report.
The following is a reconciliation of the beginning and ending balances for assets and liabilities measured at fair value using significant unobservable inputs (Level 3) during the six months ended March 31, 2012:
Investment in Security | |||||
Balance, September 30, 2011 | $ | 36,424,662 | |||
Realized gain/(loss) | – | ||||
Change in unrealized appreciation/depreciation | – | ||||
Purchases | – | ||||
Principal payments | (650,139 | ) | |||
Balance, March 31, 2012 | $ | 35,774,523 |
In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-04 “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements” in Generally Accepted Accounting Principles (“GAAP”) and the International Financial Reporting Standards (“IFRS”). This requirement amends FASB ASC Topic 820, Fair Value Measurements and Disclosures, to establish common requirements for measuring fair value and for disclosing information about fair
9
Rochdale Structured Claims Fixed Income Fund, LLC
Notes to Financial Statements (Unaudited)
2. Significant Accounting Policies (continued)
Security Valuation (continued)
value measurements in accordance with GAAP and IFRS. This requirement is effective for fiscal years beginning after December 15, 2011 and for interim periods within those fiscal years. Management is currently evaluating the impact of these amendments and does not believe they will have a material impact on the Fund’s financial statements.
Restricted securities include securities that have not been registered under the Securities Act of 1933, as amended, and securities that are subject to restrictions on resale. The Fund may invest in restricted securities that are consistent with the Fund’s investment objective and investment strategies. In some cases, the issuer of restricted securities has agreed to register such securities for resale, at the issuer’s expense either upon demand by the Fund or in connection with another registered offering of the securities. Investments in restricted securities are valued at fair value as determined in good faith in accordance with procedures adopted by the Board of Managers. It is possible that the estimated value may differ significantly from the amount that might ultimately be realized in the near term, and the difference could be material. At March 31, 2012, the Fund was invested in the following restricted security:
Security | Acquisition Date | Principal Amount | Cost | Price per Share | Value | % Net Assets | ||||||||||||||||
Crescit Eundo Finance I, LLC Note | February 24, 2010 | $ | 35,774,523 | $ | 35,774,523 | $ | 100 | $ | 35,774,523 | 100.5 | % |
Organization Expenses
Expenses incurred by the Fund in connection with the organization were expensed as incurred. The Advisor reimbursed the Fund for these expenses, subject to potential recovery (see Note 4).
Fund Expenses
The Fund bears expenses incurred in its business. The expenses of the Fund include, but are not limited to, the following: management fees, legal fees; accounting and auditing fees; custody fees; costs of computing the Fund’s net asset value; expenses of preparing, printing, and filing reports and other documents with government agencies; expenses of Members’ and Board meetings; Member record keeping and Member account services, fees, and disbursements; insurance premiums; fees for investor services and other types of expenses as may be approved from time to time by the Board.
10
Rochdale Structured Claims Fixed Income Fund, LLC
Notes to Financial Statements (Unaudited)
2. Significant Accounting Policies (continued)
Federal Income Taxes
The Fund intends to be treated as a partnership for Federal income tax purposes. Each Member is responsible for the tax liability or benefit relating to such Member’s distributive share of taxable income or loss. Therefore, no federal income tax provision is reflected in the accompanying financial statements.
The Fund has adopted accounting standards regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The Fund has concluded that there is no impact on the Fund’s net assets or results of operations. These standards require the Fund to analyze all open tax years, as defined by the statute of limitations, for all major jurisdictions. Open tax years are those open for exam by taxing authorities and include the 2010 and 2011 tax years. During the six months ended March 31, 2012, distributions in the amount of $1,208,116 were from ordinary income for tax purposes.
Offering Costs
Offering Costs were charged to Members’ capital in proportion to the number of units sold during the offering period (see Note 4).
Subsequent Events
The Fund has adopted financial reporting rules regarding subsequent events, which requires an entity to recognize in the financial statements the effects of all subsequent events that provide additional evidence about conditions that existed at the date of the balance sheet. Management has evaluated the Fund’s related events and transactions that occurred subsequent to March 31, 2012 (see Note 8).
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
3. | Investment Management |
The Fund has an investment management agreement with Rochdale. The Advisor is responsible for providing investment advisory management, certain administrative services and conducts relations with the service providers to the Fund.
11
Rochdale Structured Claims Fixed Income Fund, LLC
Notes to Financial Statements (Unaudited)
3. Investment Management (continued)
The Fund will pay the Advisor an investment management fee at an annual rate equal to 0.25% of the Fund’s month-end net assets. The investment management fee will accrue and be payable monthly.
4. | Expense Reimbursement |
The Advisor has contractually agreed to waive and/or reimburse the Fund’s expenses to the extent needed to limit the Fund’s annual operating expenses to 1.40% of net assets. To the extent that the Advisor reimburses or absorbs fees and expenses, it may seek payment of such amounts for three years after the year in which the expenses were reimbursed or absorbed. The Fund will make no such payment, however, if its total annual operating expenses exceed the expense limit in effect at the time the expenses were reimbursed or at the time these payments are proposed.
The expense reimbursement agreement allows the Advisor to request recoupment of Covered Fund Costs, as defined in the agreement (including Offering Costs advanced by the Advisor) only if the distribution to Members with respect to the year for which the recoupment is sought would (after taking into account the amount of recoupment) equal or exceed the Minimum Annual Distribution, 7.00% compounded monthly per annum per Unit. The Fund and the Advisor agree that the Advisor may request recoupment of expenses absorbed and repayment of offering costs advanced by the Advisor in the prior three years in years in which the Minimum Annual Distribution is achieved so long as the Fund’s actual annual expenses plus the amount of any requested recoupment with respect to such year, does not exceed 1.40% of net assets.
For the six months ended March 31, 2012, $62,312 was recouped by the Advisor. At March 31, 2012, the remaining cumulative amount available for recoupment amounted to $118,458. This amount may be recouped by September 30, 2013.
5. Shareholder Servicing Arrangement
The Fund will pay a fee to the Advisor (or its affiliates) at an annual rate of 0.25% of the Fund’s month-end net assets, including assets attributable to the Advisor (or its affiliates). Services provided include, but are not limited to, handling Member inquiries regarding the Fund (e.g., responding to questions concerning investments in the Fund, and reports and tax information provided by the Fund); assisting in the enhancement of relations and communications between Members and the Fund; assisting in the establishment and maintenance of Member accounts with the Fund; and assisting in the maintenance of Fund records containing Member information.
12
Rochdale Structured Claims Fixed Income Fund, LLC
Notes to Financial Statements (Unaudited)
6. Distribution to Members
The Fund intends to make distributions to Members on a monthly basis in aggregate amounts representing substantially all of its net investment income, if any, during the year. The Fund also intends to distribute monthly proceeds from any principal paydowns on the Note, which will be designated as a return of capital to Members. Although the Fund does not expect to realize long-term capital gains except under extraordinary circumstances (such as the sale of all or a substantial portion of the Note), if it does earn such gains, they will be paid out once each year (unless otherwise permitted by the 1940 Act). The Fund will make distributions only if authorized by the Board and declared by the Fund out of assets legally available for these distributions.
7. Investment Transactions
For the six months ended March 31, 2012, excluding short-term securities and U.S. Government securities, there were no purchases of investments and sales of investments were $650,139. There were no purchases or sales of U.S. Government securities during the six months ended March 31, 2012.
8. Subsequent Event
On April 25, 2012, the Advisor and City National Bank (“City National”) announced that they had reached an agreement pursuant to which City National will acquire 100% of the issued and outstanding stock of the Advisor’s Parent Company. This transaction (the “Transaction”) is expected to be completed on or about June 30, 2012 (“Closing Date”). Following the Closing Date, the Advisor, together with certain other companies that, currently, are also wholly-owned by the Advisor’s parent company, will continue to conduct their businesses as wholly-owned subsidiaries of City National. While the Transaction is expected to close on the Closing Date, consummation of the Transaction is contingent on the satisfaction of several conditions.
Management has evaluated the impact of this subsequent event and determined it will not have a material impact on the Fund’s financial statements.
13
Rochdale Structured Claims Fixed Income Fund, LLC
Period from | ||||||||||||||
February 24, 2010 (5) | ||||||||||||||
Six Months Ended | Year Ended | through | ||||||||||||
March 31, 2012 (1) | September 30, 2011 | September 30, 2010 | ||||||||||||
Net Asset Value, beginning of period | $ | 929.76 | $ | 979.88 | $ | 993.10 | ||||||||
Income from investment operations: | ||||||||||||||
Net investment income | 30.98 | 64.57 | 41.00 | |||||||||||
Total from investment operations | 30.98 | 64.57 | 41.00 | |||||||||||
Less Distributions: | ||||||||||||||
From net investment income | (30.98 | ) | (64.57 | ) | (41.00 | ) | ||||||||
From return on capital | (17.09 | ) | (50.12 | ) | (13.22 | ) | ||||||||
Total distributions | (48.07 | ) | (114.69 | ) | (54.22 | ) | ||||||||
Net asset value, end of period | $ | 912.67 | $ | 929.76 | $ | 979.88 | ||||||||
TOTAL RETURN - NET | 3.41 | % | (2) | 6.92 | % | 4.21 | % | (2)(6) | ||||||
RATIOS/SUPPLEMENTAL DATA | ||||||||||||||
Members’ Capital, end of period ($000’s) | $ | 35,588 | $ | 36,266 | $ | 38,220 | ||||||||
Portfolio Turnover | 0.00 | % | (2) | 0.00 | % | 1.72 | % | (2) | ||||||
Internal Rate of Return (3) | 6.92 | % | 6.92 | % | 5.89 | % | ||||||||
Ratio of Net Investment Income to Average Net Assets: | ||||||||||||||
Before waivers/reimbursements or recoupment | 7.07 | % | (4) | 7.05 | % | 6.92 | % | (4) | ||||||
After waivers/reimbursements or recoupment | 6.72 | % | (4) | 6.71 | % | 6.92 | % | (4) | ||||||
Ratio of Expenses to Average Net Assets: | ||||||||||||||
Before waivers/reimbursements or recoupment | 1.05 | % | (4) | 1.06 | % | 1.20 | % | (4) | ||||||
After waivers/reimbursements or recoupment | 1.40 | % | (4) | 1.40 | % | 1.20 | % | (4) |
(1) | Unaudited. |
(2) | Not Annualized. |
(3) | Net of all incentive allocations and fees since inception of the investment. |
(4) | Annualized. |
(5) | Commencement of operations. |
(6) | Represents total return on a net asset value basis. Using the initial offering price of $1,000.00, including offering costs of $6.90, total return for the period was 3.49%. |
Total return is calculated for all Members taken as a whole and an individual Member’s return may vary from these Fund returns based on the timing of capital transactions.
The expense ratios are calculated for all Members taken as a whole. The computation of such ratios based on the amount of expenses assessed to an individual Member’s capital may vary from these ratios based on the timing of capital transactions.
The accompanying notes are an integral part of these financial statements.
14
Rochdale Structured Claims Fixed Income Fund, LLC
March 31, 2012 (Unaudited)
Investment Breakdown
(as a % of total investments)
(as a % of total investments)
The accompanying notes are an integral part of these financial statements.
15
Rochdale Structured Claims Fixed Income Fund, LLC
Proxy Voting Policies and Procedures
You may obtain a description of the Fund’s proxy voting policies and procedures and information regarding how the Fund voted proxies relating to portfolio securities without charge, upon request, by contacting the Fund directly at 1-800-245-9888; or on the EDGAR Database on the SEC’s website at www.sec.gov.
Portfolio Holdings Disclosure
The Fund will file its complete schedule of portfolio holdings with the SEC at the end of the first and third fiscal quarters on Form N-Q within sixty days of the end of the quarter to which it relates. The Fund’s Forms N-Q will be available on the SEC’s website at www.sec.gov, and may also be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-202-942-8090.
Item 2. Code of Ethics.
Not applicable for semi-annual reports.
Item 3. Audit Committee Financial Expert.
Not applicable for semi-annual reports.
Item 4. Principal Accountant Fees and Services.
Not applicable for semi-annual reports.
Item 5. Audit Committee of Listed Registrants.
Not applicable to registrants who are not listed issuers (as defined in Rule 10A-3 under the Securities Exchange Act of 1934).
Item 6. Investments.
Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this Form.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable for semi-annual reports.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable for semi-annual reports.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
The registrant’s nominating committee charter does not contain any procedures by which shareholders may recommend nominees to the registrant’s board of managers.
Item 11. Controls and Procedures.
(a) | The registrant’s President/Chief Executive Officer and Treasurer/Chief Financial Officer have reviewed the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) as of a date within 90 days of the filing of this report, as required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934. Based on their review, such officers have concluded that the disclosure controls and procedures are effective in ensuring that information required to be disclosed in this report is appropriately recorded, processed, summarized and reported and made known to them by others within the registrant and by the registrant’s service provider. |
(b) | There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. |
Item 12. Exhibits.
(a) | (1) Any code of ethics or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy Item 2 requirements through filing an exhibit. Not Applicable. |
(2) A separate certification for each principal executive and principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith.
(3) Any written solicitation to purchase securities under Rule 23c-1 under the Act sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable during this period.
(b) | Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Furnished herewith. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Rochdale Structured Claims Fixed Income Fund, LLC
By (Signature and Title) /s/ Garrett R. D’Alessandro
Garrett R. D’Alessandro, President
Date 6/11/12
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title) /s/ Garrett R. D’Alessandro
Garrett R. D’Alessandro, President
Date 6/11/12
By (Signature and Title) /s/ William O’Donnell
William O’Donnell, Treasurer
Date 6/05/12