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Peer2Peer Finance News | September 23, 2019

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Excess cash eats into Honeycomb’s NAV returns

Excess cash eats into Honeycomb’s NAV returns
Marc Shoffman

THE HONEYCOMB Investment Trust saw its net asset value (NAV) returns slow in May after hitting a new high the month before.

The alternative-finance focused fund posted a NAV return of 0.56 per cent, down from 1.36 per cent in April.

A stock market update from the listed fund on Thursday also revealed new accountancy reporting standards – meaning funds have to take account of potential losses in their portfolio – have had a 0.7 per cent impact on the NAV return since inception in January 2016, putting it at 20.46 per cent.

Honeycomb said May’s results were hit by carrying excess cash following the £100m capital raise in April, but says the money will soon be used.

“The pipeline remains strong with a number of new opportunities expected to close in June which will utilise the cash balances,” Honeycomb said.

“The company has committed debt facilities in place of £150m plus an ability to upsize with the expectation of increasing the debt to equity ratio towards the target.”

Honeycomb raised £100m through a share sale in April following an oversubscribed £105m fundraising in May 2017.

The investment trust is currently trading on a premium to NAV of 11 per cent.