PEER-TO-PEER investment trust P2P Global Investments (P2PGI) has reported “gradual signs of improvement” in its first-half results, as its manager prepares for a merger with Pollen Street Capital.
The London-listed fund on Thursday posted 2.34 per cent NAV growth over the period and a dividend per share of 23p.
This compares to 2.37 per cent NAV growth in the first half of 2016 and 4.1 per cent NAV growth for the whole of last year.
P2PGI has undergone a major strategy shift over the past year, shifting away from low-yielding unsecured US consumer loans towards more asset-backed and specialist finance in Europe.
It has also been buying back shares to satiate investors. In the first half of 2017, it bought back 2,600,271 shares at an average share price of 824.25p, creating an uplift of 5.58p per share for shareholders. It said it intends to continue with its current buyback policy.
“The underlying performance of the company in the first half of 2017 showed some gradual signs of improvement relative to the final half of 2016,” it said in a stock exchange announcement.
“The company has continued to reposition its exposure away from unsecured US consumer assets through the first half of 2017 and it is expected that the reduction in exposure to these assets will reduce the drag on performance due to FX, leverage and hedging costs.
“Exposure to US unsecured consumer assets has reduced from 55.4 per cent as at 31 December 2016 to 39.3 per cent as at 30 June 2017. Further reductions to make way for more attractive specialist assets are expected in the second half of 2017.”
Following a company review, P2PGI’s investment manager MW Eaglewood unveiled plans to merge with Pollen Street Capital in May.
Pollen Street, which manages the alternative investment-focused Honeycomb Investment Trust, will take control of MW Eaglewood to create one of Europe’s largest alternative finance-focused investment managers with assets of around £2bn.
Cruikshank said that the merger should be completed by the end of the year, subject to regulatory approval.
“It is expected that [P2PGI] will benefit from the combined capabilities, people, expertise, technology and relationships of both firms,” said Cruikshank. “The company has stated that it will progressively transition the portfolio into more attractive specialist assets and it is expected that the transition may take up to 18 months to achieve.”