The RM Secured Direct Lending fund has a 'strong' pipeline of potential opportunities, according to its managers.
The £59m RM Secured Direct Lending investment trust has raised £30m through a C share issue.
The new shares will start trading on 25 October 2017. They will convert into ordinary shares when either 85 per cent of assets having been invested or after six months from admission. Following conversion, the market cap of the fund will increase from £59m to £89m.
The fund, which launched in December 2016, invests in secured debt of UK SMEs and mid-market corporates and is currently trading on a 2.6 per cent premium.
At 30 September, the portfolio has commitments to 21 loans with an average yield of 8.26 per cent and 3.74 year average life. It is managed by James Robson and Pietro Nicholls of RM Capital Markets. Fees are 0.5 per cent pa of net assets, although this increases to 0.875 per cent if net assets are above £75m. In the first three years, 50 per cent of the management fee will be paid in shares (there is no performance fee).
The investment managers say they have a substantial pipeline of active lending opportunities across real estate, property bridging, healthcare, clean energy and infrastructure
Some of its current loans are to firms such as Voyage Care, the UK's largest provider of critical care to people who have severe learning disabilities and related disorders, Praetura Asset Finance, Solarplicity, a UK green energy provider, Strawberry Star, a property development company.
Norman Crighton, Chairman, said: "The proceeds of the C Share issue will be used to invest in the substantial pipeline of opportunities sourced by the team at RM Capital. These potential investments are across a range of sectors, are supported by strong security packages and have good visibility of cash flows."