Direct Lending fund hikes dividend as demand for non-bank loans grows

By Daniel Lanyon on Wednesday 14 August 2019

Alternative Lending

Strong performance in its portfolio means the firm has exceeded its six-month dividend target with an expectation for a full year record.

Direct Lending fund hikes dividend as demand for non-bank loans grows
Image source: Photo by from Pexels

The £122m RM Secured Direct Lending fund says it is looking to increase its dividend beating its target 6.5p level following a successful period for the fund in the first six months of 2019. 

Launched in 2016, the fund aims to fill the lending void from bank disintermediate - the pullback from certain bank lending markets since 2008. Typically its loans around the £1m to 15m size to mid-sized companies. 

It now has a loan book totalling £122m, up 18 per cent since the start of the year, with an increased average yield of 8.61%.

In this six month period, it made nine new investments and had 48 drawdowns on existing investments. Its NAV total return in the first half of 2019 was 4.9 per cent. Portfolio performance benefited from prepayment penalties on two loans in the period.

Norman Crighton, Chairman of the Company, said: "The Board is pleased to report another strong performance by RMDL for the first half of the year, supported by the breadth and diversity of its portfolio. 

“We remain confident in the Company's long-term outlook, having delivered an aggregate dividend of 3.625p, exceeding the half-yearly target."

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