Direct lending investment trust yielding 6% seeking to raise further cash

By Daniel Lanyon on Tuesday 4 April 2017

Alternative Lending

As the Hadrian's Wall Secured Investments fund nears its first birthday, its managers are on track to deliver the target yield.

As the Hadrian's Wall Secured Investments fund nears its first birthday, its managers are on track to deliver the target yield. 

The Hadrian's Wall Secured Investments fund is intending to raise capital ‘in the near future’, in light of a strong pipeline of new loan opportunities, according to analyst reports, with further details set to be released later in April.

The closed-ended fund raised £80m versus a targeted £150m in a listing of an investment trust on the London Stock Exchange  in June last year. The fund is targets a yield of 6 per cent and a total return of 7-8 per cent by offering exposure to alternative credit loans to UK SMEs secured by underlying assets and collateral. Loans target mid-market sized firms with annual revenue between £1m-£25m.

The managers have now committed 96 per cent of its IPO proceeds, £52.6m has been invested with an additional £22.2m committed to loans that are expected to close before the end of April.

The loans are spread across sectors including manufacturing, social housing, energy, autos and healthcare. Investments are secured on underlying assets and the weighted average yield on the portfolio is 8.95 per cent, with a weighted average loan term of 4 years. The company anticipates achieving its target dividend rate of 6 per cent pa (6p) for Q2 2017.

"The company continues to see a strong pipeline of new loan opportunities. In order to be able to capitalise on these opportunities the company is intending to raise additional capital in the near future and expects to release further details in April," Hadrian's Wall said.

Hadrian's Wall Secured Investments is backed by Old Mutual Global and Paul Craig, who heads OMGI's Cirilium ranger of fund of funds, has taken up a board positon on Hadrian's Wall.

Its target market sits between the likes of P2P Global Investments and VPC Speciality Lending investment trusts which tend to have a majority of focus towards consumers - and larger institutional direct lenders which tend to lend to firms with annual revenues above £100m.

Loans are secured by a range of assets, including equipment, plant and machinery, real estate and trade receivables.

The trust is led by Marc Bajer, Joseph Dlutowski and Mike Schozer. Marc Bajer and Mike Schozer were previously CEO and president of Assured Guaranty Corp, respectively, While Jospeh Dlutowski was chairman and owner of CapQuest, a UK Consumer Debt firm.

Fees are 1 per cent per annum of invested assets until the fund is 90 per cent invested, after which it will become 1 per cent of net asset value [NAV].

Sign up for our newsletters

Your daily 7am download of all things alternative finance and fintech.

Fintech and alternative finance headlines with an exclusive Editor's Note each week. Delivered Monday at midday.