Honeycomb reveals its portfolio is emerging from forbearance

Honeycomb Investment Trust has said that most of its underlying loans are now out of forbearance.

A July update from the alternative finance-focused fund revealed its portfolio continues to perform well amid the coronavirus pandemic.

“The majority of underlying customer loans, both owned directly and financed through structured facilities, are now out of Covid-19 forbearance,” the update said.

“We are also seeing non-bank lenders tentatively re-enter the lending market with restricted scorecards as the economy has started to re-open.”

Read more: Honeycomb returns rise despite Covid crisis

The update also revealed that Honeycomb disposed of £44.6m of consumer unsecured whole loans to Tandem Bank.

This reduced Honeycomb’s exposure to unsecured consumer whole loans to under nine per cent of investment assets from 16 per cent in June.

Tandem Bank has also acquired Honeycomb holding Allium Lending Group and the investment trust has taken a stake in the challenger brand as part of the deal.

Honeycomb’s net asset value (NAV) return for July was 0.61 per cent, down from 0.75 per cent in June.

“The NAV return continues to improve month on month with provision charges reducing as many customers end their forbearance plans and return to full payments across all sectors,” the update said.

It comes as Honeycomb’s investment manager Pollen Street Capital (PSC) last month signalled that it may try to initiate a merger with Pollen Street Secured Lending (PSSL) again.

PSSL is also currently managed by PSC and is awaiting a decision, due next week, on whether Waterfall Asset Management will make a cash offer for the investment trust.