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Peer2Peer Finance News | September 19, 2019

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P2PGI blames writedowns and Funding Circle bad debts for poor July

P2PGI blames writedowns and Funding Circle bad debts for poor July
Kathryn Gaw

P2P GLOBAL Investments has blamed writedowns in the value of two equity stakes and bad debts from Funding Circle for a “disappointing” performance in July.

The alternative finance-focused investment trust delivered a 0.33 per cent NAV return for the month of July, down from 0.48 per cent the previous month. This brought the trust’s year to date return to 2.88 per cent, and 23.93 per cent since inception.

In a note to investors, the trust’s managers admitted that “performance in the month was disappointing.”

Read more: P2PGI returns improve as it continues shift away from P2P assets

“While performance of the continuing portfolio remains strong and in line with target, the returns were impacted by a write down in value in two legacy listed equity assets of £1.26m driven by movements in the share price of two legacy listed investments,” said the investment manager.

“Further, the performance of Funding Circle assets was poor with a significant step up in bad debts. The investment manager stopped originating with this platform in 2018.

“Lastly, one-off transaction costs for migrating some of the foreign currency hedging relationships (to diversify hedging counterparties) and foreign exchange movements also had a small impact on returns.”

P2PGI recently announced that it had sold its interests in Castlehaven Finance, an alternative development and bridging finance lender in Ireland, to Avenue Capital Group for €250m (£226.4m).

“The company has a strong pipeline of opportunities to enable a steady redeployment in line with its strategy of partnering with high quality specialist lenders to deliver attractive returns,” the investment manager said in the monthly factsheet.

Several weeks ago, it emerged that P2PGI and Honeycomb Investment Trust reportedly ended talks around a £1bn merger due to fears over the combined company’s exposure to troubled fund manager Neil Woodford. The talks were proposed by Pollen Street Capital, which manages both trusts, and would have seen P2PGI take over Honeycomb’s portfolio.

Read more: P2PGI posts weaker NAV return due to remaining exposure to Urica