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Peer2Peer Finance News | April 23, 2019

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Ranger Direct sees late loans and defaults decline

Ranger Direct sees late loans and defaults decline
Marc Shoffman

THE PROPORTION of late or overdue loans in the Ranger Direct Lending (RDL) investment trust portfolio fell in the final three months of 2017.

A fourth quarter update from the alternative finance-focused fund showed that out of its 7,297 current investments, 472 were late and 374 were in default, representing 846 loans or 11.6 per cent of the portfolio.

The London-listed fund had $28.5m (£19.9m) of loans in default as of the end of 2017, $22.4m of which were in real estate.

The remaining defaults were in consumer loans, small business lending and factoring.

Although real estate made up the highest value of defaults in the fourth quarter of 2017, the sector represents just 19 defaults out of 96 current loans.

In contrast, out of 6,622 consumer loans, 304 were in default as of the end of 2017.

RDL reported that its investment portfolio declined 7.7 per cent during the fourth quarter, pushed down by its dispute with its Princeton holding, otherwise it would have been down 0.18 per cent.

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.

Princeton filed for bankruptcy last month, hours before its arbitration hearing with RDL over its exposure to bankrupt lender Argon Credit was due to end.

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

The investment trust also said in a stock market announcement last November that it is looking at new partners to assist the current management.

It is currently trading at a discount to net asset value of 17.6 per cent.

Read more: Increasing defaults push down Ranger Direct returns