Victory Park Capital Specialty Lending (VSL) has told investors that it is “optimistic” about future performance, after reporting net asset value (NAV) growth of 4.86 per cent for the third quarter of the year.
The alternative finance focused investment trust has now posted eleven successive quarterly gross returns of three per cent or more.
In a statement to the market, VSL said that the quarterly results were “positive news” and pointed towards a strong future for the company.
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“We remain optimistic about performance heading into year end,” said VSL. “Given the short duration and significant seasoning of the balance sheet investment portfolio since the onset of the Covid-19 pandemic, loans originated prior to the crisis have significantly de-risked and our structural protections have proved resilient.”
Analysts at Numis pointed out that VSL’s rates of payment deferral have already reverted to pre-Covid levels, while the performance of borrowers who had taken deferrals has continued to exceed best case expectations. Numis added that the portfolio is “significantly de-risked” and therefore “well positioned should further stress materialise.”
“There have been no defaults in the portfolio this year and the majority of payment deferrals have returned to normal payment schedules,” added Numis.
“The company made significant new deals during the pandemic that should make it well placed to continue to generate risk-adjusted returns.
“The board continues its buyback programme and we expect it to come under continued pressure to narrow the discount. The shares are trading on a 26 per cent discount which we believe offers value given that much of the portfolio is via structured facilities with some first-loss protection and payments have continued to be received in-line with expectations.”
In its latest quarterly review, VSL confirmed that it made almost nearly $600m (£450m) of new investments since the crisis began in March 2020.
“The intent is to increase exposure gradually and reinvest cash at attractive rates of returns as new investments scale over time,” VSL said.
“All these factors leave the company extremely well positioned to continue to deliver strong NAV returns for the foreseeable future.”