Private credit fund reveals on-target dividend, increases borrowing

By Daniel Lanyon on 13th April 2018

The Honeycomb portfolio is looking to a potential £750m pipeline.

Private credit fund reveals on-target dividend, increases borrowing

The £425m Honeycomb investment trust has released its latest 20p dividend consistent with its previous pay-outs and target annual rate.

Strong underlying income yield and low bad debts mean the portfolio continues to perform well, its investment manager Pollen Street Capital says.  It adds that its pipeline remains strong with more than £750m of lending opportunities "at various stages of development".

“Assets increased to £425m in the month an increase of £32m on February driven by continued strong originations in structured facilities combined with the predictable flow of organic originations,” the manager said in an update to investors this week.

Growth in assets is, it continued, being funded through drawdowns on debt facilities. The closed-ended fund finished the month with £127.3m of debt - or a 43 per cent debt to equity ratio  - and expects to continue to draw down on additional debt to fund new opportunities.

During March it increased its debt facilities to £150m as well as reducing the margin.

The closed-ended fund invests in private lending in both business and consumer markets and, despite high profile backers such as Neil Woodford and Mark Barnett at Invesco Perpetual, it keeps a fairly low profile.

Last year Pollen Street Capital announced that it was merging with MW Eaglewood - which in turn manages the £820m P2P Global Investments portfolio – becoming PSC Eaglewood.

Honeycomb last year raised £105m from investors in what was a heavily over-subscribed round.  Woodford was one investor increasing his stake.

GLI Finance also scored a £50m funding line from Honecomb back in January.

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