The investment trust is being wound down, following approval by a shareholder vote on the terms in June, and may be able to return cash more quickly by selling loans held in its near £300m portfolio of credit assets.
The £292m Funding Circle SME Income fund, currently being wound down, may undertake “opportunistic portfolio sales” of its loan assets, according to a stock market update.
In April the investment trust revealed that investors in the fund, which invests exclusively in loans originated across Funding Circle’s platform, were in favour of ceasing investment in new credit assets and being wound down with cash being returned to shareholders.
In an update last week it said further that it may also look to offload assets where there was an attractive opportunity to do so.
“The Board notes that given the nature of the Credit Assets as relatively short duration amortising loans, there is natural liquidity in the Company's Portfolio as these Credit Assets mature. In order to seek to distribute cash to Shareholders more quickly, the Company may also undertake opportunistic portfolio sales of the Credit Assets,” it said.
Whilst it did not specify whether this could include retail investors, it said that if the move is approved by shareholders the investment trust’s name would change to SME Credit Realisation Fund Limited and its shares would not be marketed to retail investors. Therefore it seems likely that the fund will look to an institutional investor for any potential sales.
Funding Circle said back in April that it was developing new single currency private funds for institutional investors as a new funding line and has already struck large deals with Aegon and Waterfall Asset Management.