Filed Pursuant to Rule 424(b)(3)
File No. 333-220480
ANGEL OAK STRATEGIC CREDIT FUND
(the “Fund”)
January 10, 2024
Supplement to the Prospectus dated May 31, 2023, as supplemented to date
This supplement provides updated information beyond that contained in the Prospectus and should be read in conjunction with the Prospectus.
Effective May 31, 2024, the portfolio manager information in the “Management of the Fund – Investment Personnel” section of the Fund’s Prospectus is deleted in its entirety and replaced with the following:
Investment Personnel
The Adviser’s investment team includes:
Matthew R. Kennedy, CFA, is a Head of Corporate Credit and Senior Portfolio Manager of the Adviser and a Portfolio Manager of the Fund. Mr. Kennedy has over 20 years of capital markets and asset management experience. Prior to joining the Adviser in 2016, Mr. Kennedy spent seven years as a portfolio manager with Rainier Investment Management, LLC, where he served as Director of Fixed Income Management and was responsible for managing the Predecessor High Yield Fund among other clients. Mr. Kennedy began his investment career in 1995 at GE Financial Assurance, where he served as a Senior Analyst and made investment recommendations for investment grade, high yield, and private placement portfolios. From 1991 through 1994, he was a CPA and Auditor at Deloitte & Touche. Mr. Kennedy is a member of the CFA Institute and the Seattle Society of Financial Analysts. He holds the Chartered Financial Analyst designation. Mr. Kennedy received his Bachelor of Arts degree in Business Administration, with specializations in Finance and Accounting, from Washington State University.
Berkin Kologlu is a Senior Portfolio Manager of the Adviser and a Portfolio Manager of the Fund. Mr. Kologlu has over 20 years’ experience in fixed income products and focuses on building and managing strategies within the Collateralized Loan Obligation (CLO) market. He spent the previous six years as an Executive Director at UBS, covering structured products and client solutions. Prior to UBS, Mr. Kologlu worked at Bank of America, where he focused on the structuring and marketing of CLOs and synthetic CDOs backed by corporate credit. Before Bank of America, Mr. Kologlu worked in Turkey as a commercial banker, where he was responsible for lending to large cap corporations. He received his MBA from Duke University’s Fuqua School of Business and his B.S. in Civil Engineering from Bogazici University in Istanbul, Turkey.
Sreeniwas (Sreeni) V. Prabhu is Managing Partner, Co-CEO, and Chief Investment Officer of the Adviser and a Portfolio Manager of the Fund. Prior to co-founding the Adviser in 2009, Mr. Prabhu was the Chief Investment Officer of the $25 billion investment portfolio at Washington Mutual Bank for three years and was also part of the macro asset strategy team at the bank. Prior to joining Washington Mutual Bank, Mr. Prabhu worked for six years at SunTrust Bank in Atlanta, where he was responsible for investment strategies and served as head portfolio manager for the $3 billion commercial mortgage backed securities portfolio. He began his career at SunTrust in 1998 as a bank analyst focused on asset/liability management and liquidity strategies. Mr. Prabhu holds a B.B.A. in Economics from Georgia College and State University and an M.B.A. in Finance from Georgia State University.
Namit Sinha is a Managing Director and Chief Investment Officer of the private strategies of the Adviser and a Portfolio Manager of the Fund. Mr. Sinha has over 15 years of experience in fixed income products including structured credit. Prior to Angel Oak, Mr. Sinha spent four years as Senior Vice President at Canyon Capital and established the residential loan trading business in addition to covering its structured products operations. Prior to joining Canyon, Mr. Sinha worked at Nomura as Executive Director of Mortgage Trading and was involved in the acquisition and financing of non-performing loans, reperforming loans, non-qualified mortgages, and prime jumbo loans. Prior to that, Mr. Sinha worked at both Lehman Brothers and Barclays as a non-agency whole loan trader. Mr. Sinha holds an M.S. from Rutgers University, and a Bachelor of Technology degree from the Indian Institute of Technology Bombay in Mumbai, India.
Clayton Triick, CFA, is a Senior Portfolio Manager of the Adviser and a Portfolio Manager of the Fund. Mr. Triick focuses on security and portfolio analytics. Prior to joining Angel Oak in 2011, Mr. Triick worked for YieldQuest Advisors, where he was a member of the investment committee focusing on interest rate risk, currency risk, and commodity of the portfolios alongside directly managing the closed-end fund allocations within YieldQuest portfolios and individual accounts. His investment experience spans across multiple sectors of fixed income since 2008. Mr. Triick holds a B.B.A. in Finance from the Farmer School of Business at Miami University. He also holds the Chartered Financial Analyst (CFA) designation.
The Fund’s Statement of Additional Information provides additional information about the portfolio managers, including their compensation structure, other accounts managed and ownership of Shares of the Fund.
Please retain this Supplement with your Prospectus for future reference.
Filed Pursuant to Rule 424(b)(3)
File No. 333-220480
ANGEL OAK STRATEGIC CREDIT FUND
(the “Fund”)
January 10, 2024
Supplement to the Statement of Additional Information (“SAI”) dated May 31, 2023, as supplemented to date
This supplement provides updated information beyond that contained in the SAI and should be read in conjunction with the SAI.
Effective May 31, 2024, the portfolio manager information in the “Management – About the Portfolio Managers” section of the Fund’s SAI is deleted in its entirety and replaced with the following:
About the Portfolio Managers
Matthew R. Kennedy, Berkin Kologlu, Sreeniwas V. Prabhu, Namit Sinha, and Clayton Triick are the Portfolio Managers of the Fund. As of October 31, 2023, the Portfolio Managers were responsible for managing the following types of accounts for the Adviser, other than the Fund(s) for which they serve as a portfolio manager:
Matthew R. Kennedy
| | | | | | | | | | | | | | | | | |
| Number and Assets of Other Accounts | Number and Assets of Accounts for which Advisory Fee is Performance Based |
| Registered Investment Companies | Other Pooled Investment Vehicles | Other Accounts | Registered Investment Companies | Other Pooled Investment Vehicles | Other Accounts |
| 4 | 2 | 0 | 0 | 1 | 0 |
| $759.26 million | $157.03 million | $0 | $0 | $110.66 million | 0 |
Berkin Kologlu
| | | | | | | | | | | | | | | | | |
| Number and Assets of Other Accounts | Number and Assets of Accounts for which Advisory Fee is Performance Based |
| Registered Investment Companies | Other Pooled Investment Vehicles | Other Accounts | Registered Investment Companies | Other Pooled Investment Vehicles | Other Accounts |
| 4 | 2 | 5 | 0 | 1 | 0 |
| $2.77 billion | $157.03 million | $457.23 million | $0 | $110.66 million | 0 |
Sreeniwas (Sreeni) V. Prabhu
| | | | | | | | | | | | | | | | | |
| Number and Assets of Other Accounts | Number and Assets of Accounts for which Advisory Fee is Performance Based |
| Registered Investment Companies | Other Pooled Investment Vehicles | Other Accounts | Registered Investment Companies | Other Pooled Investment Vehicles | Other Accounts |
| 5 | 17 | 0 | 0 | 14 | 0 |
| $3.03 billion | $2.44 billion | $0 | $0 | $2.03 billion | $0 |
Namit Sinha
| | | | | | | | | | | | | | | | | |
| Number and Assets of Other Accounts | Number and Assets of Accounts for which Advisory Fee is Performance Based |
| Registered Investment Companies | Other Pooled Investment Vehicles | Other Accounts | Registered Investment Companies | Other Pooled Investment Vehicles | Other Accounts |
| 9 | 15 | 0 | 0 | 13 | 0 |
| $3.46 billion | $2.38 billion | $0 | $0 | $2.01 billion | $0 |
Clayton Triick
| | | | | | | | | | | | | | | | | |
| Number and Assets of Other Accounts | Number and Assets of Accounts for which Advisory Fee is Performance Based |
| Registered Investment Companies | Other Pooled Investment Vehicles | Other Accounts | Registered Investment Companies | Other Pooled Investment Vehicles | Other Accounts |
| 9 | 2 | 4 | 0 | 1 | 0 |
| $3.41 billion | $157.03 million | $275.94 million | $0 | $110.66 million | $0 |
Compensation: The Portfolio Managers receive an annual base salary from the Adviser. Each of the Portfolio Managers is eligible to receive a discretionary bonus, which is based on: profitability of the Adviser; assets under management; investment performance of managed accounts; compliance with the Adviser’s policies and procedures; contribution to the Adviser’s goals and objectives; anticipated compensation levels of competitor firms; effective research; role and responsibilities; client satisfaction; asset retention; teamwork; leadership; and risk management. Mr. Prabhu has an ownership interest in the Adviser and the Adviser’s parent company and may receive distributions from the Adviser, which may come from profits generated by the Adviser. Some Portfolio Managers have profit interest units in the Adviser’s parent company in addition to their salary, bonus, and benefits package. These units participate in firm-wide profits and also convey capital value in the event of certain scenarios.
Potential Conflicts of Interest: Actual or apparent conflicts of interest may arise when a portfolio manager has day-to-day management responsibilities with respect to more than one fund or other account. More specifically, portfolio managers who manage multiple funds and/or other accounts may experience the following potential conflicts: The management of multiple accounts may result in a portfolio manager devoting unequal time and attention to the management of each account. Investment decisions for client accounts are also made consistent with a client’s individual investment objective and needs. Accordingly, there may be circumstances when purchases or sales of securities for one or more client accounts will have an adverse effect on other clients. The Adviser may seek to manage such competing interests by: (1) having a portfolio manager focus on a particular investment discipline; (2) utilizing a quantitative model in managing accounts; and/or (3) reviewing performance differences between similarly managed accounts on a periodic basis to ensure that any such differences are attributable by differences in investment guidelines and timing of cash flows. The Adviser also maintains a Code of Ethics to establish standards and procedures for the detection and prevention of activities by which persons having knowledge of the investments and investment intentions of the Fund may abuse their fiduciary duties to the Fund.
If a portfolio manager identifies a limited investment opportunity that may be suitable for more than one client, the Fund may not be able to take full advantage of that opportunity due to an allocation of filled purchase or sale orders across all eligible accounts. To deal with these situations, the Adviser has adopted procedures for allocating portfolio transactions across multiple accounts.
With respect to securities transactions for clients, the Adviser determines which broker to use to execute each order. However, the Adviser may direct securities transactions to a particular broker/dealer for various reasons including receipt of research or participation interests in initial public offerings that may or may not benefit the Fund. To deal with these situations, the Adviser has adopted procedures to help ensure best execution of all client transactions.
From time to time, the Adviser may make investments at different levels of an issuer’s or borrower’s capital structure (including but not limited to investments in debt versus equity). In managing such investments, the Adviser will consider the interests of the Fund’s shareholders in deciding what actions to take with respect to a given issuer or borrower. These potential conflicts of interest may become more pronounced in situations in which an issuer or borrower experiences financial or operational challenges, or as a result of a Fund’s use of certain investment strategies, including small capitalization, emerging market, distressed or less liquid strategies.
Finally, the appearance of a conflict of interest may arise where the Adviser has an incentive, such as a performance-based management fee, which relates to the management of one but not all accounts for which a portfolio manager has day-to-day management responsibilities.
Potential Restrictions and Issues Related to Material Non-Public Information: The Adviser and its affiliates may acquire confidential or material non-public information, and as a result, the Adviser may be restricted from trading in certain securities and instruments. The Adviser will not be free to divulge, or to act upon, any such confidential or material non-public information and, due to these restrictions, the Adviser may be unable to initiate a transaction for the Fund’s account that it otherwise might have initiated. As a result, the Fund may be frozen in an investment position that it otherwise might have liquidated or closed out or may not be able to acquire a position that it might otherwise have acquired.
The following shows the dollar amount ranges of the portfolio managers’ beneficial ownership of shares of the Fund as of October 31, 2023:
| | | | | |
| Portfolio Manager | Dollar Range of Equity Securities in the Fund |
| Matthew R. Kennedy | None |
| Berkin Kologlu | None |
| Sreeni V. Prabhu | None |
| Namit Sinha | None |
| Clayton Triick | None |
Please retain this Supplement with your SAI for future reference.
