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Peer2Peer Finance News | July 21, 2019

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Funding Circle SME fund size to double following C share merger

Funding Circle SME fund size to double following C share merger
Marc Shoffman

THE FUNDING Circle SME Income Fund (FCIF) is set to double the value of its assets after announcing plans to convert its conversion shares into the ordinary portfolio on 20 December.

The investment trust, which invests in loans on the Funding Circle platform, revealed in its half-year report that the move will increase the fund’s size to around £310m.

Currently the ordinary shares are worth £165.3m and the C shares, launched in April, are worth £142.3m.

In comparison, P2P Global Investments has total assets of £777.9m and VPC Specialty Lending has £337m.

The FCIF interim report showed its net asset value (NAV) total return between April and September 2017 was 3.9 per cent and declared a dividend per ordinary share of 3.25p.

This took the last four quarterly dividends declared to 6.5p per share, in line with the dividend target of 6p to 7p.

Read more: The next evolution

The fund was invested in 5,828 loans at the end of September, with 80 per cent in the UK, 17 per cent in Europe and three per cent in continental Europe.

“We are pleased with the Company’s continued solid performance in the half year,” Richard Boléat, FCIF chairman, said

“Later this month the highly successful £142m C share issue that was raised earlier this year will convert into ordinary shares, thereby increasing the fund’s value to in excess of £300m.”

Numis backed the latest update.

“This will come as welcome news to shareholders given that many of the listed peers in the direct lending sector have suffered performance issues over the last 18 months,” a Numis analyst note said.

It noted that the fund has delivered on its return targets to date, in contrast to most of its peers.

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