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Peer2Peer Finance News | January 18, 2019

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Property loans dominating defaults in Ranger Direct fund

Property loans dominating defaults in Ranger Direct fund
Marc Shoffman

ALMOST 10 per cent of the current loans in the Ranger Direct Lending portfolio are late or in default, with most coming from its real estate exposure, the investment trust has revealed.

A portfolio update from the alternative-finance focused fund, representing performance up to June 2017, showed of 9,368 current investments, 583 were late and 303 were in default.

The majority of defaults were in real estate, making up $17.2m (£13m) of the $20.7m defaulted loans overall.

There currently are $1.3m of unsecured consumer loans with default status and the remaining $2.2m is made up of small business loans, equipment and factoring and secured investments.

Late payments made up $3.5m of loans.

The investment trust said it has backed 15,270 loans overall, worth $600m, of which 5,016 have completed, representing $236m.

The investment trust’s performance has been hit by the ongoing Princeton legal dispute as well as underperformance in its peer-to-peer platform holdings.

A monthly update for August showed its net asset value (NAV) had grown 0.8 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.

It is currently in talks with other platforms to boost capacity and is also in the process of reducing its stake in individual providers and realigning its portfolio away from unsecured loans.

The investment trust is currently trading at a discount to NAV of 28.7 per cent.

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