VICTORY Park Capital (VPC) Specialty Lending Investments has announced that it has sold the majority of its Funding Circle US and Upstart marketplace loans.
The London-listed investment trust said that the loans sold represented 3.65 per cent and 1.48 per cent respectively of the company’s net asset value (NAV) as of 31 March.
The sales tie into the company’s strategy of relocating capital away from marketplace – or peer-to-peer – lending investments into balance sheet investments, which it said have consistently generated higher returns with less volatility.
VPC announced in November 2016 that it was winding down its P2P lending portfolio, after losses triggered substantial writedowns.
Taking into account the loan sales, the company’s balance sheet investments accounted for 63 per cent of the NAV as of 31 March 2017, as compared to 17 per cent for the marketplace loans.
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“The company expects to re-invest substantially all of the sale proceeds into balance sheet investments, as well as other strategic uses,” it said in a stock exchange announcement on Friday.
“The company will continue to seek tactical opportunities to further reduce its exposure to marketplace loans where it is accretive to shareholder value.”
The firm said it will retain its non-performing Funding Circle US and Upstart loans, which represented 0.68 per cent and 0.21 per cent respectively of NAV as of 31 March 2017.
It said it has already been provisioned against these loans in line with its reserving policy.