Star fund manager buys large stake in Alternative Credit investment trust

By Daniel Lanyon on 11th May 2017

P2P/Marketplace LendingAlternative Credit

In recent years the well-known ‘perma-bear’ has become more interested in alternatives to fixed income.

Star fund manager buys large stake in Alternative Credit investment trust

In recent years the well-known ‘perma-bear’ has become more interested in alternatives to fixed income.

The long term manager of the Capital Gearing investment trust Peter Spiller has bought a substantial stake in the SME Loan Fund, totalling more than 8 per cent, according to documents filed to the London Stock Exchange.

Spiller, who has managed his closed ended fund for more than 35 years – making him the longest serving investment trust manager, is well-known for his capital preservation skills. He massively outperformed the 2007-9 financial crisis as well as the 2000-3 bear market. Since 2011 Alastair Laing has also been listed as co-manager.

The trust’s performance over the past 22 years (as as the data goes back) totals 812 per cent - bet of fees - compared to 463 per cent total return from the FTSE All Share index.

Performance of Capital Gearing vs the  FTSE All Share Index since 1995

Source: FE Analytics

The managers bought the stake in the fund, which undergoing a shift in strategy and name change, on 9 May. Spiller has long been a bond bull, at least until about two years ago when he began believing that the 30-year boom in fixed income was coming to an end.  The manager also has a reputation, often downplayed, for being something of an activist investor.

About 30 per cent Capital Gearing's portfolio is made up of other investment trusts and some of these, over the years, Spiller is said to have 'engaged' with their boards to improve corporate governance and boost returns.

The the £52m SME Loan fund will soon be called the SQN Secured Income Fund, after SQN Capital Management was appointed as investment manager with effect from 1 April 2017.  When it was launched in 2015 but was formerly called GLI Finance. As part of the shift under SQN it will start originating loans itself and break ties with GLI-backed platforms.

Comments