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Peer2Peer Finance News | September 23, 2019

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VPC increases exposure to balance sheet loans

VPC increases exposure to balance sheet loans
Marc Shoffman

VPC SPECIALTY Lending bolstered its exposure to balance sheet lending in January as it continues to shift its focus from marketplace loans.

The investment trust’s latest monthly report for January 2017 revealed balance sheet loans made up 58 per cent of its net asset value, compared with 24 per cent in marketplace lending.

New balance sheet investments for the month included Cognical, owner of American lease-to-own finance provider Zibby, and Mexican online lender Kueski. There are more in the pipeline, the report said.

Its cash position reduced from 13 per cent to eight per cent after the proceeds of a sale of a Funding Circle UK loan portfolio were used to fund balance sheet investments.

The investment trust, which invests mainly in the US, now has holdings in 24 platforms, 19 of which were balance sheet investments, and has equity stakes in 18 platforms.

Read more: Most P2P investment trust boards have ‘skin in the game’

Of the total return made by the fund, 5.6 per cent came from investment in balance sheet loans in the 12 months to January 2017, while marketplace loans accounted for 0.8 per cent, the report showed. Equity investments contributed 1.09 per cent.

Balance sheet loans alone have returned 14 per cent.

VPC’s NAV has returned 7.18 per cent since inception in March 2015 up to the end of January 2017. In the 12 months to the end of February 2017, its NAV has returned 3.08 per cent and its fund is currently on a discount to NAV of 20.3, one of the biggest among P2P-focused funds.

Meanwhile, investors are also set to receive an interim dividend of 1.5p per share for the three months to 31 December.

This is in line with dividends paid last year in June, August and November but below the 2p per share issued in February 2016.