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Peer2Peer Finance News | November 22, 2017

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Legal dispute hits Ranger Direct’s returns

Legal dispute hits Ranger Direct’s returns
Marc Shoffman

RANGER Direct is expecting a resolution by the end of November to its long-running dispute with one of its holdings Princeton.

The investment trust, which backs secured business loans mainly in the US, has an investment in Princeton giving it exposure to direct lending platform Argon Credit, which went bankrupt in December.

In April 2017, Ranger Direct said it had taken an impairment of $8.87m (£6.9m) on its original exposure to Princeton due to a decline in cashflow from the Argon portfolio. This represented four per cent of assets.

But since then the fund has been unhappy with the information provided from Princeton and how it calculated a writedown of $11.7m on the Argon portfolio, opening the doors to arbitration proceedings.

“The proceedings will be heard by a three-arbitrator panel, and the outcome will be binding on each of the parties,” Ranger Direct said in an update.

“A favourable arbitration outcome may result in the company recouping some or all legal fees incurred in connection with the proceedings.

“Furthermore, as part of the initial stages of the proceedings, the arbitrator has issued an order that requires any proceeds, net of expenses, received from the Argon bankruptcy to be paid by Princeton to Ranger on a monthly basis.”

Read more: P2P trusts reap rewards by changing focus

The order also requires Princeton to notify Ranger Direct of any additional investment it makes in Argon Credit beyond a set benchmark and any action that would distribute or dispose of the asset as well as any transactions that would alter the capital structure of the fund.

It comes as Ranger Direct reported that the legal proceedings had pushed its net asset value (NAV) return down from 0.78 per cent to 0.41 per cent.

Rangerr Direct is currently on a discount to NAV of 28.8 per cent as of this morning.

Meanwhile, the Daily Telegraph’s influential Questor investing column has tipped another alternative finance-focused fund, P2P Global Investments, as a sell just seven months after recommending it as a “speculative buy.”

The investment trust is now on a discount to NAV of 17.1 per cent.

Read more: Ranger Direct eschews possibility of property loan write offs