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Peer2Peer Finance News | June 26, 2019

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Funding Circle investment trust secures backing for closure

Funding Circle investment trust secures backing for closure
Marc Shoffman

SHAREHOLDERS in Funding Circle’s dedicated investment trust have backed winding down the fund.

An extraordinary general meeting (EGM) was held this morning, where it was agreed that the investment objective and policy of the fund be modified to facilitate a managed wind-down.

It has also changed its name from the Funding Circle SME Income Fund, to the SME Credit Realisation Fund Limited.

The board of the investment trust said it wants to return capital to shareholders in a timely manner, while maximising the value it can get from the company’s investments.

Shares will remain listed and tradeable as long as practicable during the wind-down, the board said. It will switch from its current strategy of making regular share repurchases to a quarterly redemption cycle. As the proceeds from asset sales build up, the directors will have the discretion to return capital to shareholders on a pro rata basis, and can make ad hoc returns if there is excess cash.

Read more: Funding Circle lowers projected returns

The fund, which launched in 2015, announced plans to close in April

It has been hit by hedging costs and the impact of new IFRS accountancy reporting requirements.

The fund is believed to have gradually represented less investment on the Funding Circle platform in recent years as it has attracted other institutional backers.