VPC Speciality Lending (VSL) has secured a new $75m (£58m) loan from Capital Source, a division of Pacific Western Bank, to boost its returns.
The alternative finance-focused fund said on Monday that the gearing facility, which can be increased to $125m if needed, should enhance its returns and reduce cash drag from its hedging programme.
The London-listed fund said at first it will draw $25m from the facility, which will be used to fund new and existing balance sheet investments.
By the end of the year it expects “to be substantially fully invested, including the initial amount drawn under the CapSource facility”, it said.
VSL has reported a strong performance in 2018. In the second quarter of this year, it recorded its strongest quarterly return since its inception in March 2015 and since then, it has continued to grow its net asset value (NAV) each month.
Over the past two years, VSL has made a strategic decision to move away from peer-to-peer loans in favour of balance sheet loans, as they typically offer higher returns with less leverage.