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Peer2Peer Finance News | December 13, 2017

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Increasing defaults push down Ranger Direct’s August returns

Increasing defaults push down Ranger Direct’s August returns
Marc Shoffman

RANGER Direct Lending saw its net asset value (NAV) return improve slightly in August but it was again pushed down by the ongoing Princeton legal dispute as well as underperformance in its peer-to-peer platform holdings.

A monthly update from the alternative finance-focused investment trust for August showed its NAV had grown 0.80 per cent before applying a loss reserve of 0.38 per cent to prepare for future write-offs, leaving performance at 0.42 per cent.

This took the NAV up slightly from 0.41 per cent in July.

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

“The legal expenses for the Princeton arbitration reduced returns by 11 basis points for the month of August,” the report said.

“As previously stated in the company’s June NAV report, two platforms are producing lower returns than expected. The first is a US consumer lending platform that has shown a recent increase in late payments and defaults.

“The second platform that is underperforming is a platform that originates short-duration business cash advances.

“The platform has had a couple of initial loans pools that have exceeded their anticipated default rates which caused us to increase loss reserves.”

The remaining active platforms are providing returns in line with expectations and the investment trust is also currently in due diligence with new platforms that may provide additional capacity with targeted net returns on or above 12 per cent, the update said.

The investment trust is currently trading on a discount to NAV of 28.6 per cent.

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