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Peer2Peer Finance News | August 25, 2019

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P2P fund share issues boost investment trust sector

P2P fund share issues boost investment trust sector
Marc Shoffman

FUNDRAISINGS by Honeycomb and the Funding Circle SME Income Fund (FCIF) helped push share issues to record levels in the investment trust sector for the first half of 2017.

Secondary issuances raised £3.3bn in the first six months of the year, trade body the Association of Investment Companies has revealed, up from £1.8bn at the same time in 2016.

FCIF raised £142m in conversion shares in April, the largest total in the specialist debt sector, while the Honeycomb investment trust raised £105m through a ordinary share issue.

The FCIF’s C shares, which invest in loans on the Funding Circle peer-to-peer platform, are currently trading at a premium to net asset value (NAV) of 2.6 per cent, compared with 4.8 per cent in the ordinary share class.

Alternative finance-focused Honeycomb is trading on a premium to NAV of 17.5 per cent.

“It has been a strong first half of the year for the investment company sector, with assets reaching an all-time high,” Ian Sayers, chief executive of the AIC, said.

“Secondary issuance reached a record level and the number of new launches has picked up demonstrating substantial demand for investment companies.

“It’s interesting to note that much of the issuance, both new and secondary, took place in high-yielding, alternative asset classes such as debt, property and infrastructure.

“This reflects the suitability of the closed-ended structure for investing in these types of illiquid assets and continued investor demand for income.”

Read more: Alternative finance funds beat the sector average for dividend yield