Alternative finance-focused fund RM Secured Lending will rebrand to become RM Social & Environmental Infrastructure Income, following a switch in its investment focus.
The fund intends to focus on investing in social and environmental infrastructure assets across six target sectors: accommodation; healthcare; childcare and education; clean energy and renewables; waste management; and energy efficiency and carbon reduction.
Currently, social and environmental infrastructure assets make up 28 per cent of the fund’s portfolio, following a healthcare investment in April. By the end of 2021, the company said that it expects 50 per cent of its portfolio to be invested in social and environmental assets.
The company also updated the market on its proposed liquidity event.
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The board stated that “shareholders are overwhelmingly supportive of the company’s performance, particularly during the pandemic and its recovery, as well as the updated investment focus and strategy,” and added that there was very limited appetite from those shareholders to participate in a liquidity opportunity. The lack of interest led the board to decide to put the next liquidity opportunity to shareholders in three years’ time.
Liberum analysts said that the switch in investment focus could broaden the fund’s potential investor base and provide more opportunities to scale and enhance share liquidity over time.
“The portfolio is performing well and although we continue to closely monitor those assets which have been most impacted by the pandemic, we expect these to continue to improve in line with peers,” said Norman Crighton, chairman of RM Secured Direct Lending.
“We are excited about the depth of opportunity to grow the portfolio with our refreshed strategy and believe that the target returns and positive social impact from our investments will also broaden our appeal to new and different investors.
“Our priority remains to restore the trading of the company back to a premium to net asset value (NAV) and increase the size of the company. The investment manager has an excellent pipeline of high quality assets that will enable us to grow the portfolio, delivering returns for our investors and delivering positive impact to society.”
The company also confirmed that the portfolio exposure to the coronavirus business interruption loan scheme (CBILS) has risen to 22 per cent of NAV with £8m of further drawings expected this month.