VICTORY Park Capital Specialty Lending (VSL) has reported a record third quarter and is buying back shares as it believes they are materially undervalued.
The alternative finance-focused fund, which mainly invests in balance sheet lenders in the US and UK, said on Tuesday that it produced a total net asset value (NAV) return of 3.21 per cent during the third quarter.
It posted a gross revenue return of 4.34 per cent and a total net revenue return of 3.08 per cent. These returns and the NAV return are inception-to-date record highs for the company, it said.
VSL has posted a total NAV return of 7.46 per cent in the year to date, producing a quarterly 2p dividend that it expects to continue going forward.
“The third quarter of 2018 has seen the company deliver its strongest NAV return since inception while maintaining a disciplined approach to credit underwriting and structuring,” VSL said in a quarterly update.
“Macro conditions remain favourable, but we do not take this for granted and believe our portfolio is well-positioned to withstand any economic volatility that may occur in the coming years.
“We are comfortable with the underlying exposure, which is concentrated in high-quality consumer assets.”
VSL’s share price has been grown by 2.82 per cent this year to date, but has fallen by 19.8 per cent since inception.
Shares were trading at 79.2p as of early afternoon on Tuesday.
“We continue to believe that the company’s shares are materially undervalued,” VSL said. “As such, we will seek to buy back additional shares at a discount to NAV.”