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Peer2Peer Finance News | August 24, 2019

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VPC Specialty Lending’s NAV hits six-month high

VPC Specialty Lending’s NAV hits six-month high
Kathryn Gaw

VICTORY Park Capital Specialty Lending (VPC) reported its highest net asset value (NAV) return in six months, thanks to the improved performance of its balance sheet investments.

The alternative finance-focused investment trust reported a net revenue return of 0.73 per cent in March 2019, up from 0.46 per cent in February.

“During the month, the company continued to see positive revenue and capital returns as the balance sheet investments continue to perform,” VPC said.

Read more: VPC Specialty Lending reports small capital loss in February

VPC has been winding down its underperforming peer-to-peer lending portfolio since late 2016, after losses triggered substantial writedowns. Instead, it has moved more of its capital into balance sheet investments, arguing they typically offer higher returns with less leverage, while the lending platform takes on more risk as it usually takes first loss on loans.

The trust hit the headlines at the end of April when it emerged that fund manager Neil Woodford had divested his entire stake in the trust. He has been under pressure to offload liquid assets to make up for underperformance in his flagship fund.

Woodford’s shares were “placed with a mix of existing and new shareholders,” VPC said.

Following Woodford’s exit, US-based Weiss Asset Management purchased a 5.44 per cent of VPC’s shares on behalf of its Brookdale Global Opportunity Fund and Brookdale International Partners subsidiaries.

Between 1 April and 2 May, VPC repurchased 9,549,811 shares as part of its ongoing share buyback programme.

By the end of March 2019, the trust had a market capitalisation of £253m, and it was trading at a 20.12 per cent discount to NAV.

Read more: VPC to use share buybacks to tackle trust discount