VICTORY Park Capital Specialty Lending Investments (VSL) saw its net asset value (NAV) return halve in September, hit by a decline in the share price of one of its holdings.
The London-listed fund, which predominantly invests in balance sheet loans, reported a monthly NAV return of 0.51 per cent.
Capital returns for the month were down 0.9 per cent, primarily driven by the decrease in Elevate Credit’s stock price, it said.
However, the company produced a gross revenue return of 1.01 per cent – its sixth consecutive month of gross revenue return over one per cent, due a strong performance in its balance sheet investments.
Last month, VSL reported a record third quarter and announced that it was buying back shares as it believed that they were materially undervalued.
In November, it repurchased an additional 1.97 million shares at an average price of 78.8p per share as part of the share buyback programme.
Liberum analysts said that VSL’s performance has “materially improved” in 2018.
VSL’s shares are trading at a 14.3 per cent discount to NAV but Liberum expects this discount to narrow, given the improved performance and 10.1 per cent dividend yield.
VSL begun winding down its peer-to-peer lending portfolio in late 2016, as it saw more lucrative opportunities in balance sheet loans.