HONEYCOMB investment trust has doubled its net assets in the 12-month period ending 30 June 2017.
According to the company’s half-year report released on Thursday, net asset value (NAV) including income was £304,749,000, up from £150,925,000 a year earlier. Likewise, market capitalisation was £350,135,000 on 30 June 2017 compared with £152,250,000 on 30 June 2016.
NAV per share came in at 1,018.3p, up from 1,006.2p a year earlier, bringing the total NAV since inception to 13.16 per cent.
The alternative finance-focused fund’s investments include holdings in business lender Iwoca and the Green Deal Finance Company, which recently raised money on ethical peer-to-peer lending platform Abundance.
“The board has been pleased with the continued progress during the first half of the year,” said Robert Sharpe, chairman of Honeycomb. “Continued strong performance of investments made in 2016 and careful selection of new attractive risk-adjusted assets has resulted in the company performing well during the period.”
The trust completed two major share offerings in the first half of 2017. The first raised £200m of gross proceeds, and a second share issue in May raised £105m. These were followed by the purchase of an unsecured personal loan portfolio on 9 June, and a portfolio of secured consumer loans in early July.
Around the same time, Honeycomb increased the size of its committed debt facility to £80m. This was £30m drawn by 30 June 2017, and it is expected to be further drawn in the second half of 2017 to fund further investment opportunities.
Sharpe said that he was happy with the trust’s performance to date, and remained optimistic for the future, despite fierce competition and Brexit uncertainty.
“Despite the competitive consumer finance marketplace, we believe that the retrenchment of mainstream lenders from specialist markets presents an opportunity to engage with customers in markets which are underserved by traditional lenders and platforms,” said Sharpe.
“We further believe that through targeting verticals that require a specialist understanding, more detailed underwriting, or where the vertical pre-selects higher quality borrowers, attractive risk-adjusted returns can be delivered with low volatility throughout the cycle.
“We continue to closely monitor the political and economic uncertainty created by Brexit, however clear conclusions cannot yet be drawn. There remains intensified competition however credit losses within the portfolio remain stable. We remain vigilant.”
He added that the company will be keeping an eye on upcoming regulatory changes which might impact the liquidity of the business, and said that the board “remains confident of the long-term prospects for the company”.