VPC unveils improved returns as it continues portfolio shift

VICTORY Park Capital (VPC) Specialty Lending Investments reported improved returns in the third quarter, as it continues to reposition its portfolio towards balance sheet lending.

The alternative finance-focused investment fund said on Thursday that it delivered a net revenue return of 2.35 per cent over the period. This was offset by a net capital return of -1.15 per cent, amounting to a net total return of 1.2 per cent.

This is an improvement on the second quarter, when the net revenue return of 1.84 per cent was offset by a net capital return of -2.42 per cent, for a net total return of -0.58 per cent.

However, VPC said that the performance of its investment portfolio still remains “sharply polarised”, with its balance sheet investment returns faring far better than its marketplace returns, at 2.57 per cent and -0.39 per cent respectively.

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The London-listed trust announced late last year that it was winding down its underperforming marketplace lending portfolio, after losses triggered substantial writedowns.

Balance sheet investments accounted for 71 per cent of net asset value by the end of the third quarter of 2017, up from 66 per cent at the end of the second quarter and 51 per cent at the end of last year.

Earlier this week, the company said in a portfolio update that it had offloaded the majority of its loans from US consumer lender Avant, as part of the change in strategy.

In a separate monthly report for September, also released on Thursday, VPC said that the proceeds from the Avant sale will be channelled into balance sheet loans, with the investment manager currently evaluating nine new opportunities.