RANGER Direct Lending (RDL) saw its net asset value (NAV) fall in February for the third month in a row, as the company’s legal battles continue to hit profits.
The alternative finance-focused investment trust posted a monthly NAV net return of 0.31 per cent in February, down from 0.43 per cent in January and 0.48 per cent in December. In its latest monthly update, RDL revealed that legal expenses from a dispute with its Princeton holding amounted to 23bps over the course of the month, while the Princeton income not accrued/reserved was 15bps. Without these legal expenses, RDL’s February NAV increase would have been 0.69 per cent, in line with the company’s targets.
The London-listed fund has been involved in a legal dispute with Princeton since last year, regarding its exposure to bankrupt lender Argon Credit. On 9 March 2018, Princeton filed a voluntary petition of bankruptcy, just before the two companies were due to enter into arbitration. According to RDL, the bankruptcy petition has the effect of staying the first phase of the arbitration and also stopping a ruling on the segregation of Princeton’s assets.
“The company is actively engaging in the Princeton bankruptcy process and has filed several motions with the bankruptcy court,” read the RDL commentary.
“These motions include a motion to dismiss Princeton’s bankruptcy petition in its entirety or in the alternative to appoint a bankruptcy trustee.
“Also, the company filed motions seeking certain relief from the bankruptcy stay to proceed with the arbitration, as well as a motion seeking the court to compel Princeton to appear for an examination and to produce documentation to aid in the audit of the annual financial statements of the company. These motions are presently scheduled to be heard by the bankruptcy court in April 2018.”
RDL continued to diversify away from US-based lending platforms in February, with UK-based lenders now making up seven per cent of the company’s portfolio. As at 28 February 2018, the cash and net platform receivables were $15.64m (£11.16m) or approximately 7.2 per cent of NAV.