The investment trust has not fully deployed its £100m cash raised in April but says its pipeline of opportunities remains strong.
The £454m Honeycomb investment trust, one of the largest alternative credit focused listed portfolios, has released its latest net asset value [NAV] showing the fund’s relatively high weighting to cash following a £100m capital raise in April nudged down the returns.
Honeycomb's NAV rose by 0.56 per cent in the month of May, down from 0.65 per cent the previous month. However, the returns in May would have been 0.65 per cent excluding the uninvested cash, according to analysts at Liberum.
“Cash on the balance sheet at the end of May was £54m (14 per cent of NAV) and a number of investments are due to close in June which would utilise the remaining cash,” Liberum said.
The fund also has £87.6m of drawn debt - a net debt to equity ratio of 8.4 per cent. Its investment manager, Pollen Street Capital, says the underlying portfolio is continuing to perform well “with strong cash collections and bad debts in line with budget”.
“The pipeline remains strong with a number of new opportunities expected to close in June which will utilise the cash balances. The Company has committed debt facilities in place of £150m plus an ability to upsize with the expectation of increasing the debt to equity ratio towards the target,” Pollen Street said in an market update.