THE Honeycomb Investment Trust saw its net asset value (NAV) dip slightly in February to 0.59 per cent.
The alternative finance focused fund said in a monthly update that its NAV was slightly lower than the 0.66 per cent reported in January due to the shorter month and income being accrued daily.
It is the second month that Honeycomb reported its returns under IFRS 9 rules that take account of any expected credit losses when valuing loans. The NAV return would have been 0.63 per cent under the previous disclosure standards.
As at the end of February the majority, 59 per cent, of the portfolio was invested in consumer loans with small and medium sized enterprises (SMEs) and property making up the remaining 41 per cent, the update said.
“The portfolio continues to perform well with strong underlying income yield and low bad debts. The company’s investment assets increased to £393m in the month, an increase of £41m on January, driven by strong originations in structured facilities and portfolio assets combined with the predictable flow of organic originations,” Honeycomb investment manager Pollen Street Capital said.
“The growth in assets was funded through drawdowns on debt facilities and the company finished the month with £97.5m of debt or 33 per cent debt to equity ratio and expects to continue to draw down on additional debt to fund new opportunities.”
Pollen Street Capital said it has a pipeline of £750m of loans in development across the consumer, SME and property sectors.
The investment trust is currently on a premium to NAV of 13.8 per cent.