Direct lending fund opts for wind-down

The news comes after Hadrian’s Wall Secured Investments had a rocky 2019 with its largest loan entering administration.

Hadrian’s Wall Secured Investments Limited’s (HWSIL) board has opted for a wind-down after reporting a 0.4 per cent reduction in net asset value (NAV) in December.

Since its launch in 2016, the SME-focussed direct lending portfolio aimed at mid-market loans, has had a NAV performance of -2.31 per cent, bringing the 2019 NAV total return to -10.48 per cent.

Following this reduction, the board has opted to return capital to its shareholders and wind-down proposals are expected to be put to investors at an EGM in the coming weeks. 

HWSIL uses a targeted investment strategy to invest in loans; it currently has two loans with a principal value of £17.1m and reserves against these two loans at £4m. 

The company has also reduced its revolving credit facility to £5m.

As a result of the company’s recent losses, they have also failed to meet their targeted annualised dividend of at lease six pence per share, only managing a dividend of 1.5 pence per Ordinary Share.

An analyst from Liberum commented: “The concern will be whether there will be further loss reserves against loans in the portfolio given the track record to date. 

“We believe the managed wind-down was the only viable option for the board.”