VICTORY Park Capital (VPC) has cut its whole loans portfolio from seven platforms to two, as part of a new strategy to focus on balance sheet lending.
In its latest quarterly letter, VPC revealed plans to amortize its whole loan investments having previously invested in a range of US- and UK-based platforms including Avant, Funding Circle, Prosper and Upstart.
The firm will now buy whole loans from just two peer-to-peer platforms, one of which is UK-headquartered Funding Circle.
“As at the end of the third quarter, the company held whole loans from seven platforms,” the company said in its quarterly letter.
“The loans from two platforms will be fully amortized shortly and the company has largely stopped purchasing from three others, leaving only two platforms from which the company is actively purchasing loans.
“As the whole loan investment portfolio continues to amortize down, we have reinvested the capital into balance sheet investments.”
At the end of 2015, VPC held 27 per cent of its capital in balance sheet investments. By 30 September 2010, this figure had risen to 51 per cent.
“We expect the trend of deploying more capital to balance sheet investments to continue, subject to any limitations caused by continued weakening of the pound,” the letter continued.
“VPC’s pipeline of additional investments in existing balance sheet investments remains strong and at the same time VPC has identified certain balance sheet investments to be funded in the fourth quarter and thereafter.”
In the third quarter of the year, VPC posted a revenue return of 2.03 per cent, offset by a 1.17 per cent reduction in capital, which resulted in a net return of 0.86 per cent.