Protect the Value of Your Investment in UDF IV

Support the Board and Management Team that Are Taking Action to Build on the Trust’s Track Record of Delivering Enhanced Shareholder Returns

Suburban Community

Your United Development Funding IV (“UDF IV” or the “Trust”) Board of Trustees and management team have acted, and continue to act, to protect and promote the interests of the Trust’s shareholders.

We have navigated extraordinary challenges and will continue to focus on safeguarding the Trust’s assets and maximizing shareholder value while building on the Trust’s long history of cash distributions.

NexPoint Real Estate Opportunities, LLC and its affiliates (collectively, “NexPoint”), which have a track record of acting against the interests of UDF IV shareholders, submitted nominations for a controlling slate of dissident trustees for election at the 2024 Annual Meeting of Shareholders later this year. This is simply the latest step in NexPoint’s ongoing, self-interested campaign, which we believe is aimed at extracting the value from the Trust at the expense of all other shareholders.

NexPoint Has Attempted to Take Over Management of the Trust for the Past 5+ Years, Causing Significant Disruption to the Trust’s Operations and Undermining Our Shareholders’ Investment
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NexPoint has launched numerous frivolous lawsuits against the Trust – including a defamation suit – forcing the Trust to waste resources that could otherwise be used for the benefit of shareholders.
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In 2020, NexPoint launched a hostile tender offer, which it extended 13 times, to purchase Trust shares at the bargain basement price of $1.10 per share, or approximately a 90% discount to the Trust’s book value per share at the time.
Despite NexPoint’s Malicious Attacks on the Trust, the UDF IV Board and Management Team Have Safeguarded the Value of the Trust’s Portfolio and Continued to Drive Shareholder Returns
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The Board has declared cash distributions of approximately $38 million, or approximately $1.24 per share, to shareholders since reinstating distributions in the third quarter of 2019. Cash distributions declared since inception total approximately $186 million, equating to approximately $6.06 per share.
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The Trust has continued to actively and professionally manage its portfolio, including originating 9 new loans since 2020 for a total commitment of over $70 million. Importantly, 8 of these new loans funded new phases of projects for which the Trust has existing loans in its portfolio. These new loans are expected to accelerate the performance of such existing project loans. To date, one of these 9 loans has already been paid in full, and another loan is expected to be repaid in full within the next 30 days.
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The Trust engaged an independent accounting firm that audited the Trust’s 2022 financial statements and is currently auditing the Trust’s 2023 financial statements, which are expected to be made available to Trust shareholders in the third quarter of 2024.

Importantly, the $1.24 per share in distributions to shareholders that we have declared is far more than NexPoint was willing to offer shareholders for their Trust shares.

White proxy papers

UDF IV will be mailing proxy materials to shareholders in due course, which will include the WHITE proxy card and additional details regarding the Board of Trustees’ recommendation of nominees for election to the Board at the 2024 Annual Meeting of Shareholders.

Over the next several months, you will likely continue to receive materials from NexPoint with fictitious claims regarding the Trust as well as our Board and management team. We expect that NexPoint will continue to twist the facts and rehash old events in an attempt to fearmonger and deceive you into supporting their misguided and malicious campaign. Please discard any mailings and other proxy cards that are sent to you from NexPoint or its affiliates.