By Daniel Lanyon on Monday 27 August 2018
The investment trust has also halted purchasing its own shares in as it targets a stable dividend.
The £332m VPC Specialty Lending investment trust has announced its second consecutive dividend of 2p per share this year, its target level, following a two year turnaround amid lower than expected returns, according to an investor update.
Following on from recording its highest monthly return to date for May of this year, and then beating this again in June, the closed-ended fund has declared an interim dividend of 2p pence per share for the three-month period to 30 June 2018.
The fund’s manager says that it aniticaptes the portfolio to start accruing performance fees in the coming months as NAV returns have substantially improved. A performance fee is conditional on the portfolio achieving a 5 per cent at least annual total return. Also, it says the the fund has not bought any of its own shares, a strategy to lower its discount, during August so far.
VPC Specialty Lending has been undergoing a transition – now mostly complete – to balance sheet lending exposure compared to a portfolio more concentrated on P2P lending exposure when it launched in 2015.
Two years ago it was sitting on a more than 30 per cent discount to its net asset value [NAV] whereas today it has now reduced this to 9.4 per cent. This is more or less its lowest level since May 2016. Since then it has seen a period of 18 months or so when its dividends were below its 2p target before announcing a dividend at that level for the first three months of 2018. The two consecutive dividends of 2p are an increase from its Q3 and Q4 2017 dividends of 1.8p pence per share.
The dividend will be paid on 20 September 2018 to shareholders on the register as at 31 August 2018. The ex-dividend date is 30 August 2018.