Balance sheet loans help push VPC to record NAV return

VICTORY Park Capital Specialty Lending (VSL) produced its strongest net asset value (NAV) total return since inception last month, the investment trust has revealed.

The alternative finance-focused fund revealed its NAV for April was 0.95 per cent, up from 0.62 per cent in March.

This was mainly driven by a 0.94 per cent improvement in its balance sheet investments, but marketplace loans – an area it has been withdrawing from – also contributed a 0.03 per cent return to the NAV.

VSL also announced an increase in its dividend to 2p per share in the first quarter, up from 1.8p previously.

The fund said 2p per share would now be its new dividend target.

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During the month the £286m trust increased its allocation from 80 per cent to 82 per cent, while exposure to marketplace loans remained at three per cent.

“It is positive to see the dividend increase which puts the fund on a 10.1 pe cent yield,” a Numis analysts’ note said.

“The fund is trading on a 12 per cent discount, which we believe reflects the disappointing performance record and a higher risk profile than some of its peers.

“In particular, the balance sheet approach leads to a focus on early-stage platforms and high interest rate/high default platforms, with a bias towards US consumers.”

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