P2P Global Investments continues buybacks, discount narrows

By Daniel Lanyon on Thursday 30 June 2016

Alternative Lending

The P2P Global Investments trust has bought back its owns shares for the third day running this week amid the Brexit-induced volatility in global stock markets.

AltFi broke the news on Tuesday that the largest investment trust offering exposure to the P2P/marketplace lending space had used the harsh sell off in global markets to defend its discount of 20.3 per cent and buy back its own shares. The move has so far worked as the discount today is now 17.3 per cent.

The share price of the investment trust sold off on the news that UK had voted to leave the European Union last Friday, albeit less than the broader market. As a member of the FTSE 250, the trust will be included in buying and selling of passive funds/ETFs which will effect its share price.

Performance of share price over 1 month

Source: Google

While the fund’s management bought just a small amount on Monday of 23,421 ordinary shares, it has followed on Tuesday with a further purchase of 45,693 and 87,662 yesterday. This means 156,776 ordinary shares are currently held by the company as treasury shares. There are a total 86,306,803 ordinary shares in issue.

Buy-backs have been a hot issue for investors in the investment trust. Many urged it to buy back shares to defend the share price from moving to a wide discount following its slide from a near 18 per cent premium in 2015.

The lead manager of P2P GI Simon Champ made the argument in an exclusive interview with AltFi recently he believed the fund’s cash pile of £400m was better spent on negotiating strategic loan purchases from platforms rocked by the Lending Club fiasco than it was from buying back shares.

A spokesman for P2P GI said: “As part of our discount management policy, the board has the discretion to order the manager to buy back shares opportunistically and decided it was the right thing to do during the exceptional dislocation which occurred after the UK referendum result.

“However, our main focus continues to be the multi-year opportunities in market place lending which we are seeing now and which offer attractive returns to shareholders.”

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