The investment trust is shifting away from P2P and marketplace loan exposure.
The VPC Specialty Lending investment trust has sold out of its exposure to Avant loans alongside an equity stake in a lending platform as it continues to allocate money away from marketplace and otehr loans toward balance sheet lending platforms.
It sold the vast majority of its Avant marketplace loans, excluding the securitisations, in early October. The loans sold represented 7.6 per cent of fund’s Net Asset Value (NAV) as at 31 August 2017.
The VPC fund’s portfolio performance in the three months to end of September has “remained sharply polarised” with "strong" balance sheet investment returns contrasting with "weak" marketplace returns, VPC says.
During the third quarter of 2017 the fund saw further reallocation of capital from marketplace loans to balance sheet investments, a strategic objective. By the end of the third quarter of 2017, balance sheet investments accounted for 71 per cent of NAV, up from 66 per cent at the end of the second quarter and 51 per cent at the end of 2016.
The fund has also sold the majority of its equity exposure in zipMoney, an Australian point of sale credit provider, taking advantage of “significant share price appreciation” following the recent announcement of a strategic investment by Westpac.
The sale price equates to a 3.9x multiple of the original investment, following a 20-month holding period, the firm says.
In the third quarter of 2017, VPC Speciality Lending Investments delivered a net revenue return of 2.35 per cent, an improvement from 1.84 per cent in the second quarter. This, however, was offset by fall in its capital return of 1.15 per cent, for a net total return of 1.2 per cent.
The fund holds investments in debt instruments of 27 platforms 22 of which were structured as balance sheet investments. In addition, the Company held equity stakes in 21 Portfolio Companies.