Honeycomb fund looks to raise £100m

By Daniel Lanyon on 19th April 2018

Alternative Credit

The investment trust wants to take advantage of increasing demand for non-bank assets and its own double-digit premium.

Honeycomb fund looks to raise £100m

The £425m Honeycomb investment trust is looking to raise a further £100m in a C share issuance today, according to regulatory filings.

Demand for private debt and alternative credit assets remains high with several trusts recently raising new cash or expressing the desire to do so in the near future

Sitting on a hefty 12.3 per cent premium to net asset value, the Honeycomb trust has a somewhat concentrated shareholder base, say analysts at Numis Securities.

“Unusually, the issue closes today, but this reflects the fund’s concentrated, institutional shareholder base with c.80 per cent of shares capital held by four shareholders. According to Bloomberg, the largest shareholders are 36.3 per cent Invesco, 24.6 per cent Old Mutual, 12.2 per cent Woodford, and 7.3 per cent M&G.”

Last year, Honeycomb raised £105m from investors in what was a heavily over-subscribed round.  Woodford was one investor increasing his stake.

The specialist-lending fund is focused on UK consumer (61 per cent), Property (35 per cent) and SME (4 per cent). Its latest 20p dividend is consistent with its previous pay-outs and target annual rate, currently offering a 7.7 per cent annual yield on its issue price.

Its investment manager Pollen Street Capital recently said that strong underlying income yield and low bad debts mean the portfolio continues to perform well. It also said that its pipeline remains robust with more than £750m of lending opportunities "at various stages of development".

GLI Finance also scored a £50m funding line from Honecomb back in January and during March it increased its own debt facilities to £150m.

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