P2P Global Investments’ (P2PGI) net asset value (NAV) return slowed in May due to remaining exposure in collapsed invoice financing platform Urica.
The London-listed alternative finance-focused investment trust posted a NAV return of 3.41 per cent on an annualised basis, or 0.28 per cent for the month, down from 5.2 per cent and 0.44 per cent in April.
P2PGI said the result was “significantly impacted” by a one-off writedown of receivables relating to Urica, which put itself into liquidation last year after a fraud attack in France.
The NAV return prior to the writedown was 6.3 per cent on an annualised basis, or 0.53 per cent for the month, which was in-line with recent strong performance, the company added.
P2PGI’s share price tumbled in July last year after the company wrote off an equity investment of about £5.5m in Urica, which equated to 0.74 per cent of NAV.
In addition to equity investment, P2PGI had also provided a revolving credit facility to Urica that was secured against English and French invoice receivables.
This capital exposure had been amortising and any remaining exposure had been expected to be collected in full, P2PGi said.
But last month, French courts accepted a claim by domestic tax authorities after a statutory deadline against one of the debtors, where a material recovery had been expected.
As such, and taking into account a manager’s assessment of the debtor’s assets, it is now considered unlikely that any material recovery will be achieved.
P2PGI’s writedown means that the company no longer has any material credit exposure to Urica, although some administration remains relating to its closure, which is expected to be completed later this year.
Since its launch in May 2014, P2PGI has grown its total NAV return to 22.9 per cent. But it has also seen its share price performance slump by 14.4 per cent over the same period.
The investment trust is currently trading on a discount to NAV of 11.4 per cent.
A Numis analyst note described the news as “disappointing” but added that the impact of the write-off was relatively small, at 0.25 per cent of net assets.
It added that P2PGI had the potential to deliver more consistent returns as the legacy portfolio continues to be wound down and it is transitioned to secured and specialist assets, typically in the UK.