VSL achieves strong returns in December

Victory Park Capital Specialty Lending (VSL) achieved strong returns for investors in December and across 2020, despite a difficult market backdrop.

VSL revealed that its net asset value (NAV) return was up by 2.1 per cent to 95.72p in December, meaning that the investment trust saw a NAV total return of 11.1 per cent in 2020.

Broker Numis said in December that VSL’s returns were driven by the merger agreement of Katapult Holdings with FinServ Acquisition – a fintech-focused special vehicle acquisition company. This provided an uplift of 1.17 per cent to VSL’s NAV.

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The alternative finance-focused fund will receive cash and newly issued shares in FinServ, subject to a six-month lock-up. According to Numis, the deal is expected to close in the second quarter, and there is currently a 30 per cent liquidity discount on the shares.

Numis added that it was optimistic for the firm’s investors in 2021.

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In January, VSL announced it had agreed to combine with digital assets marketplace Bakkt Holdings, which is expected to complete in the second quarter.

Numis said the overall impact will take some time to be reflected in the NAV, but based on the current price of VPC Impact Acquisition it could lead to a rise of around 11 per cent in the NAV.

VSL’s shares are currently trading at 85.5p, reflecting an 11 per cent discount to the NAV. Numis has forecasted a NAV of £1.02, representing a 16 per cent discount.

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“VPC Specialty Lending delivered strong returns in 2020, given a difficult market backdrop,” Numis said in an email update to its investors.