Alternative lending funds are continuing to perform strongly, with three of the biggest funds publishing February NAV targets in line with expectations.
Funding Circle SME Income Fund, RM Secured Direct Lending and Sequoia Economic Infrastructure Income published updates this month demonstrating their underlying credit performances were in line with previous targets.
Sequoia Economic Infrastructure Income generated a 0.4 percent NAV return in February, acording to figures from Liberum, but was impacted by a -0.36 percen reduction in asset valuations related to the fund’s public investments (24% of the portfolio). The portfolio was 92% invested at the end of the month, and the portfolio allocation to floating rate investments remains high at 61 percent, which should help to protect against rising interest rates.
RM Secured reported a NAV return in February of 0.5 percent, despite suffering from a -0.14 percent portfolio valuation reduction. Total dividends declared for 2017 were 4.2p per share, above its target price of 4 pence, and the company is targeting a 6.5 pence distribution in 2018.
Funding Circle SME Income Fund reported a 0.4 percent NAV return in February, with Liberum saying it believed it had been was partially impacted by cash drag from the recent Citibank funding transaction. The company’s NAV return over the past six months, at 2.8 percent, s lower than expected, but can be attributes to cash drag and a higher impairment rate in Q4 2017 in areas affected by Hurricanes Harvey and Irma.