The investment trust, one of best performing among its alternative credit peers, recently revealed its asset mix and bad debt losses.
Pollen Street Capital, the investment manager of the £497m Honeycomb investment trust, is currently planning to ramp up its exposure to SME lending in the fund, the firm has said.
Last week the firm revealed its asset mix and bad debt losses in its portfolio showing that it had £294m of consumer loan exposure representing 60 per cent of its credit portfolio which in turn makes up the vast majority of the total fund. Property loans represent most of the rest of the credit assets 33 per cent) at £159m.
SME lending, however, makes up just £36m - or 7 per cent - of the portfolio but Pollen Street says it is eyeing increasing its exposure owing to "an attractive opportunity". It added that it has recently signed up a new partner.
Its existing book of SME loans have an income yield of 7.3 per cent with bad debts of 0.1 per cent giving risk adjusted yield of 7.2 per cent.
Honeycomb looks set 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, analysts at Liberum and Numis say.
The fund’s net asset value (NAV) total return for H1 2018 was 4.5 per cent (3.8 per cent after adjusting for the effect of IFRS 9).
Now in its sixth year, the AltFi London Summit returns on 18th March 2019 to 155 Bishopsgate. Last year proved to be a crucial turning point for the key players building the future of finance. Leading platforms launched oversubscribed IPOs, digital banks proliferated and mainstream financial institutions started their own disruptive propositions. With 2019 certain to be another landmark year, more questions will be asked by regulators with investor interest in disruption also poised for more rapid growth.