The £221m Ranger Direct Lending fund has adopted the Liberum AltFi Returns Index (LARI) as its benchmark to show its performance against the broader UK lending market over time.
Ranger Direct Lending is a closed-ended portfolio listed on the London stock exchange launched in May 2015. It is focused on investing in loans originated by direct lending platforms that are generally secured against assets with a typically low duration of around two years.
The Liberum AltFi Returns Index (LARI) measures the returns generated from p2p and marketplace lending in the UK. Index values are time-weighted and published as aggregate annualised returns. As such the series expresses what an equal time-weighted exposure to every loan made by the eligible UK platforms would have returned over the preceding 12 month period.
The Index is updated on a monthly basis. Index calculations are based on aggregated data from the four largest UK platforms by origination volume: Zopa,Funding Circle,Ratesetter and MarketInvoice. Together these four platforms represent over 70 per cent of the market in the UK and 60 per cent in the whole of Europe.
Bill Kassul, principal at Ranger Capital, who are the investment managers of the fund, says the LARI will allow greater transparency of returns in the fund for investors.
'"We are delighted to be able to offer our investors the context provided by a benchmark of other alternative lenders. This allows our clients to measure our investment returns, providing them a context to assist in their assessment of our performance," he said.
Rupert Taylor of AltFi Data said: "The LARI offers a representation of the returns delivered by the European alternative lending sector. By benchmarking their own returns against this index Ranger can provide investors with context against which to compare their investment performance. It also allows allows Ranger to demonstrate their accountability - they recognise that they can be held to account against a relevant benchmark. Their investors should find this reassuring and it should represent best practice amongst the emerging alternative credit fund universe."
According to AltFi Data, Ranger Direct Lending initially underperformed the broader UK marketplace lending space, in terms of its Net Asset Value (NAV), as measured by the LARI in its first twelve months but it has since come roaring back and is now some way ahead of other similar funds in 2016 so far.
Performance of Ranger Direct Lending NAV vs LARI since launch
Source: AltFi Data
Its latest dividend was its largest ever, and came after its fourteenth consecutive month of positive returns in its net asset value (NAV). The fund is current sitting on a yield of 8.8 per cent. It is also on discount to NAV of 11.4 per cent.
The fund is managed by Jack Antonini, Kenneth Scott Canon, Mark Dawson, William Kassul, Wes McKnight and Gary Melara. Ranger Direct Lending has a 1 per cent annual management charge and it also charges a performance fee.