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Peer2Peer Finance News | January 24, 2018

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Ranger Direct prepares for bigger losses from Argon bankruptcy

Ranger Direct prepares for bigger losses from Argon bankruptcy
Marc Shoffman

RANGER Direct Lending (RDL) is taking an additional gross reserve of $9.1m (£6.7m) against its indirect investment in bankrupt direct lending platform Argon.

The alternative finance 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.

RDL has been in an ongoing legal dispute over Princeton’s level of exposure to Argon.

Read more: Increasing defaults push down Ranger Direct returns

The fund announced on Friday it has received extra information from Princeton that has prompted it to increase how exposed its portfolio would be to Argon’s bankruptcy.

It already took a gross reserve of $10.4m in November and says its net asset value (NAV) would be pushed down by around 3.8 per cent for October due to the impairments.

RDL is currently trading at a 34 per cent discount to NAV.

It has been hit by underperformance in its peer-to-peer platform holdings as well as its ongoing Princeton legal dispute, and said in a stock market announcement in November that it is looking at new partners to assist the current management.

Analysts Numis suggested this move could reassure investors.

“We believe strengthening of the management team would be welcomed by investors, given that the ill-fated Princeton investment has raised questions over the manager’s due diligence process,” a Numis analyst note released on Friday morning said.