P2P GLOBAL Investments’ (P2PGI) exposure to US consumer loans has dropped below 50 per cent of net asset value (NAV) for the first time, as the fund overhauls its portfolio to boost below-target returns.
The London-listed investment trust said in its January factsheet, released on Wednesday afternoon, that it had sold a non-core portfolio of US consumer loans as it plans to allocate assets to other lending sectors with better returns.
Read more: How P2P funds have fared over the past year
The fund returned 0.24 per cent of NAV growth in January, its 32nd consecutive month of positive NAV returns since inception. However, this is far below its target return of between six and eight per cent.
“The investment manager is dissatisfied with the net returns achieved by the trust and is currently undertaking a review of additional steps that might be taken to improve results,” it said.
As Peer-to-Peer Finance News previously reported, P2PGI is shifting its focus away from US consumer loans towards the UK, SME loans, trade and asset-backed finance.
Read more: P2PGI shifts focus to asset-backed loans
The fund, which is managed by MW Eaglewood – a subsidiary of hedge fund giant Marshall Wace – has 48.4 per cent of its portfolio in US consumer loans, as of January 2017.
This is still P2PGI’s largest asset class, followed by European consumer loans at 16.5 per cent.
The fund said that it may sell of more of its US portfolio and is currently negotiating three new transactions.
“Loan availability in secured lending via a number of newer platforms, coupled with progressively more attractive funding gives the investment manager confidence of improving returns into the future as these deals are executed,” it said.
MW Eaglewood has permanently waived its management fee on leverage since the start of the year, in order to boost shareholder returns.