Funding Circle’s fund unfazed by Trump as income quadruples
FUNDING Circle SME Income Fund’s board does not expect Donald Trump’s victory in the US presidential election or a “hard Brexit” to affect the performance of the investment trust, which saw its income quadruple during the last half-year.
“Macroeconomic conditions in the UK and the US, being the company’s key geographical exposures, remain reasonably benign, and we see no likelihood of a material change in monetary policy or economic conditions in the short term, consistent with the views of other commentators and analysts,” said chairman Richard Boleat.
“At the time of writing, the board does not see the impact of either the Republican victory in the US presidential election or a “hard Brexit”, being the two key geopolitical risks applicable to our key markets, as being likely to have a material short term effect on our return performance or credit risk.”
The Dow Jones closed at a record high on Thursday, due to the President-elect’s pledge to cut taxes and ramp up infrastructure spending. But economists have given mixed predictions on the net positive or negative of Trump’s policies once they are fully fleshed out.
Boleat’s comments were made as part of the investment fund’s half-year results announcement, which was released late on Friday afternoon. The London-listed fund, which gives investors access to a wider portfolio of peer-to-peer lender Funding Circle’s loans, posted total income of £5.37m for the six months to 30 September 2016, up from £1.28m half-year-on-half-year.
It said that it has successfully deployed £151.9m of its total capital of £161.2m. The investment trust said it is now “focussed on delivering controlled and consistent risk adjusted performance and dividend flows to investors from our current loan portfolio”.
The fund floated on the London Stock Exchange last November, raising £150m by selling shares at £1m each. Since then it completed an additional capital raise of £15m and completed a structured finance transaction with the European Investment Bank in June.
It issued quarterly dividends of 1p and 1.625p per share respectively during the half-year period.
It plans to open the fund to new equity issuance from the end of January 2017.