P2P Global sells US loans and chases ‘less volatile returns’

By Roger Baird on Tuesday 5 February 2019

Alternative Lending

The Investment trust sold a number of non-performing loans in December.

Investment trust P2P Global Investments said the value of the fund lifted in December as it focuses on “producing less volatile returns.”

It said its net asset value (NAV) rose by 0.78 per cent in the final month of the year, amounting to a total 5.2 per cent return in 2018, as the fund sold off a number of poorly performing loans, according to its December newsletter published today.

The UK-listed fund, which invests in credit assets raised from non-bank and other specialist lending, said it received cash from two sales of two non-performing loans “at a premium to carrying value”.

It added it sold a US mainstream consumer loan portfolio in the period, and began a new loan origination relationship with a real estate fintech platform in America.

The fund said it had completed its annual IFRS 9 economic provisioning review, which now “reflects greater global economic uncertainty offset by improved performance in the underlying portfolio”. However, it has been forced into a “small increase” of its portfolio provisions.

The fund, launched in 2014 initially raising £200m from investors, is attempting to run-off a number of unattractive loans it acquired earlier, and is instead “investing in small ticket lending opportunities with attractive risk and reward characteristics”.

In December, the fund reduced the run-off portfolio to 16 per cent of its overall assets, from 20 per cent a month earlier.

The trust - which buys consumer, small business and real estate loans, mainly in the US, Europe and Australasia - said its net assets, excluding income, stood at £721.7m at the end of the year.

It reported an unchanged dividend of 12p for the final quarter of 2018.

Analysts at Numis said: “The fund has made significant progress in repositioning its portfolio and has seen returns pick-up in recent months, although December’s performance is includes a number of positive one-off impacts.”


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