The closed ended fund has seen a shift in investment strategy with its new manager and a placing of its GLIF shares.
SQN Capital Management has been appointed as investment manager with effect from 1 April 2017 of the £52m SME Loan fund, according to regulatory filings, although the current manager Amberton will be retained as a sub-adviser to the fund’s existing portfolio of loans.
The firm, which is based in New York, is an independent asset manager that specialises in alternative credit and currently has just over US$1bn of assets under management, including the London-listed £596m SQN Asset Finance Income Fund.
SQN will charge a fee of 1 per cent of the fund’s net assets, although this will reduce if/when assets grow above £250m. It will also receive a structuring fee of up to 1 per cent of new investments.
The portfolio will also see a secondary placing from new institutional investors and wealth managers with the aim of significantly broadening the shareholder base and, as a result, the market liquidity in its shares. SQN will acquire 3.3 million placing shares, representing 6.3 per cent of issued share capital.
However, following a review of the portfolio of loans, SQN identified a number of performing loans in the portfolio that are inconsistent its proposed future investment strategy, according to the firm. GLIF has agreed to acquire these loans for cash at their aggregate face value (including accrued interest) as at 10 March 2017 of £5.27m. Completion of the sale of these loans is expected to take place on or around 14 March 2017.
Richard Hills, Chairman of the Company, said: "On behalf of the Board and myself, we are delighted that the Placing has been such a great success and was substantially oversubscribed and we would like to thank our existing shareholders for their continued support, and to welcome our new shareholders".
"Additionally we would like to welcome the Company's new investment manager, SQN. Without their help this transformational Placing would not have been possible and, as we turn to the future, we look forward to working with SQN to grow the fund".
When the SME Loan portfolio was launched in 2015 it set an annual dividend target of 8 per cent per annum. At present, the company pays a monthly dividend of 0.6p per share, equivalent to an annual dividend of 7.2p per share. In future, the Board anticipates rebasing the initial annual target dividend to 6.25p, increasing to at least 7p per share with effect from July 2018; and targeting an annual net asset value total return of at least 8 per cent. The company will continue to pay dividends monthly.
AltFi is returning to Amsterdam for its second annual Summit in the city. The inaugural event last year was a roaring success, with key figures from across Continental Europe's alternative finance and digital banking sectors highlighted. These included Jeroen Broekema, managing director of Funding Circle Netherlands, and Mieke van Engelen, head of innovative partnerships at ABN AMRO's standalone lending platform, New10.