Ranger Direct eschews possibility of property loan write-offs
US-FOCUSED peer-to-peer investment trust Ranger Direct Lending has brushed off any concerns over defaults in its portfolio.
The London-listed fund, which focuses on secured business lenders mainly in the US, revealed in its first-quarter portfolio update that $15.7m (£12.1m) out of its $500m loan investments are in default.
87 per cent of defaults were in real estate loans, equating to $13.6m, but the company revealed it has had no write-offs in this sector so far.
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“The investment team watches these closely and is confident that these defaults will not turn into write-offs, because there are defined payoff plans for each borrower and the average loan-to-value of these real estate investments is 59 per cent,” the report said.
“The company has not had a real estate loan write-off since inception.”
There are $889,000 of unsecured consumer loans with default status, five per cent of which the fund said are fully secured against loss by the underlying lending partner.
The remaining $1.2m in defaults is made up of secured investments in business, equipment and factoring loans.
Meanwhile, the investment trust’s net asset value (NAV) returned 2.28 per cent in the first quarter of 2017 and 0.74 per cent in March.
The fund is currently trading at a 21.6 per cent discount to NAV.
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