Honeycomb fund focuses on deployment after NAV bounce

By Daniel Lanyon on 22nd May 2018

Alternative Credit

The closed-ended portfolio has had a strong run since launching back in 2016, most recently boosted by its latest cash raise.

Honeycomb fund focuses on deployment after NAV bounceImage source: https://goo.gl/MoaSR7

The £441m Honeycomb Investment Trust has revealed its April numbers showing a net asset value return of 0.88 per cent for the month.

The returns in April, the firm’s highest since May 2017, were boosted by the £100m capital raise at a premium to NAV during April.

The underlying return, analysts at Liberum say, in the month would have been 0.63 per cent excluding the effects of the capital raise. 

Honeycomb’s investment manager says that the portfolio continues to perform well with strong cash collections and an above target net income yield and that it has £60m of cash and a £750m pipeline of potential lending.

Liberum says Honeycomb is on track to deliver another year of strong performance in 2018 following returns of 7.8 per cent and 9.1 per cent in 2016 and 2017, respectively.

“Honeycomb's NAV total return for the four months to April 2018 is 2.9 per cent. The shares currently trade on a 11.6 per cent premium to NAV (7.2 per cent dividend yield), reflecting the sector-leading performance since launch,” Liberum said.

The fund has a portfolio of both UK consumer loans as well as specialist debt originated by platforms such as Freedom Finance, which is the UK's largest personal loan broker, the Green Deal Finance Company, Pay4Later - a point of sale consumer credit platform - as well as challenger bank Shawbrook. Honeycomb is also running a book of loans it purchased from GE Money.

Pollen Street said that it is currently looking to deploy it latest cash raise through its pipeline:  "The focus for the coming months will be to execute on the pipeline of opportunities and deploy the raised capital," it said.

The fund launched back in December 2015 after raising £100m and has grown through secondary issuance. It has a dividend target of 8 per cent per annum on its issuance price, but this was increased to 10 per cent or greater on the issue price from Q3 2016 after the portfolio was substantially deployed.

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