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SMEF Sme Loan Fd

98.25
0.00 (0.00%)
Last Updated: 00:00:00
Delayed by 15 minutes
Share Name Share Symbol Market Stock Type
Sme Loan Fd SMEF London Ordinary Share
  Price Change Price Change % Share Price Last Trade
0.00 0.00% 98.25 00:00:00
Open Price Low Price High Price Close Price Previous Close
98.25
more quote information »

Sme Loan Fd SMEF Dividends History

No dividends issued between 28 Mar 2014 and 28 Mar 2024

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Posted at 27/4/2017 05:43 by spectoacc
@Makinbuks - agree it's a pity SQN have slipped up a bit re solar. Though previous C-issues have been so oversubscribed, I'd be surprised if they didn't get them away at SMEF too.

And if they don't, and don't get to a £250m mkt cap - we get our money back.
Posted at 12/4/2017 14:48 by spectoacc
True, although I bet they'll raise via a C-share issue, so cash drag on SMEF won't be so relevant. But they're unlikely to dive straight in I agree.
Posted at 12/4/2017 12:15 by spectoacc
RDL very different IMO - buys in secondary market, ie loans originated elsewhere. Is more like (the dire) P2P or VPC.

I guess could argue the original SMEF (ie the Amberton-originated, GLIF-sponsored) book is more similar to RDL, at least from the point of view of SQN, but would hope they went very thoroughly through it first. The fact they made GLIF take on some of the loans suggests that.

Also, if/when more funds are raised, they'll be managed directly by SQN - and SQN Asset Finance Income Fund trades at a thumping premium.

Still - none of this lot (and others similar) have been tested in a bear market. "Asset-backed" is one thing, but in a 2008/09 collapse it'll be interesting to see how they cope. Lack of gearing is a plus at least..

Scary thing about P2P & VPC is how they've performed even in a bull market.
Posted at 10/3/2017 09:02 by james188
There were much earlier transfers between SMEF and GLIF which included GLIF taking back some impaired loans. I believe that SMEF has closely monitored the quality of the portfolio and the performance (including recent loans acquired from GLIF platforms)has been good. As you say, SQN would also have conducted DD on the portfolio.
Posted at 10/3/2017 08:35 by spectoacc
Thanks for comments @james188, interesting to hear from someone who's been in SMEF from the start.

Hoping/expecting that SQN had a good look at the portfolio before agreeing to take it on - kitchen-sinking was my only concern. Am sure part of that process is why they made GLIF take on part of the book. The original SMEF book will become less important over time, particularly after SQN have raised more cash, as I'm sure they will do over the next year.
Posted at 08/3/2017 18:16 by james188
I have been a holder of SMEF since it launched and I am also a long term shareholder in GLIF. Actually, I am pleased with this deal from both those perspectives and relieved that it went through. The alternative would have been much worse.

SMEF never achieved anything like the intended size that was hoped for, although it has actually performed well in comparison to its peer group. This was partly down to the general malaise in the sector, but it is clear that investors have never been comfortable with the GLIF relationship, despite a number of tweaks to the original structure. As such,it was inevitable that the parties would need to go their separate ways.

A higher placing price would have been nice for GLIF, but it was really important that this placing was successful - and this for general credibility as much as to provide funds to pay off the expensive Sancus loan.

SQN provided an effective partial underwrite up to £7 million and so I think that the placing price had to be announced in advance. Probably not a coincidence that 90p per share was the written down value for the SMEF shares set out in the end June 2016 GLIF interims as part of a kitchen sinking exercise. It would have been hugely difficult for GLIF to accept a lower strike price. SMEF as managed by SQN has a different focus and so I also think that it made sense to exit some GLIF related loans - although it seems that some remain. It would be interesting to learn which ones - maybe those where the British Business Bank/Irish Strategic Investment Fund are co-lenders?

Time to move on.
Posted at 26/1/2017 11:31 by orinocor
Ha here is confirmation. The discount is 6.7% just now and NAV is 100.42p will be able to tender at 100.42p in March

----

Next oldest of these funds is SME Loan fund (SMEF). It has just passed its first birthday, generating a creditable 6.1% NAV return over the last 12 months. Loans to businesses make up 100% of SMEF’s portfolio and 82% of its lending is secured. Its currency exposure is hedged, it is not geared and, unlike most of its peers, it is not trying to boost returns by investing in platforms (a nice idea but a very different risk proposition).

I recently stepped down from the board of GLI Finance anymore and have no holding in SMEF, so I am not as biased as I might have been, but I like SMEF’s steady approach.

It is trading on a 5% discount but there’s an opportunity next year for investors to cash in part of their holding at a price close to asset value so this discount ought to narrow. SMEF also has relatively low management fees – 0.75% on the first £100 million of assets and 0.5% on the balance and no performance fee.


hxxp://citywire.co.uk/wealth-manager/news/trust-insider-the-winning-mandates-of-p2p/a957074
Posted at 12/1/2017 21:26 by yieldsearch
From the Nov 2016 factsheet:
"The “clean” NAV fell slightly from 101.24p to 100.93p due to a loan impairment that was accounted for during the month.
Across the AltFi sector, there is evidence of a growing number of defaults. Whilst loan impairments are always a feature of the sector, the Manager operates a strict manual credit underwriting process to minimise these, however the risk can
never be entirely removed."


From the dec 2016 factsheet
Loan impairments during the past two months within The SME Loan Fund are higher than experienced during the first twelve months following launch but should not be unexpected. A NAV total return of 0.09% this month was achieved after prudent application of new impairments totaling 0.67% of NAV. The Fund continues to have one of the lowest impairment rates within the sector.


I hope to be be wrong but it seems that impairment are starting to show up, i guess at the maturity of the underlying loans.
Amberton and SMEF could at least provide the deliquencies, pool credit rating migration, loan default, net loss rate so investors can actually assess the net net coupon they will eventually get. the type of information you can find on direct peer to peer website focusing on sme loans. and they could also tell which entity originated these loans, i believe they are buying those from third party p2p lender?

The dividend looks great currently but the NAV will reduce further if the impairment are increasing in the future. I would rather stick with a paragon type company tbh, the incremental dividend yield here seems likely to be eaten by impairments.
Posted at 09/1/2017 11:43 by orinocor
Outlook

The Company is well positioned with a solid track record and an attractive dividend yield. The Board will attempt to increase the Company’s assets over the coming year against a background of a sector that is growing at an extraordinary rate. Returns to Shareholders, as always, are the most important metric but we believe that a larger investment portfolio would lead to better risk adjusted returns and a lower expense ratio. The Board is confident that further progress can and will be made in the year ahead.
Posted at 09/1/2017 11:30 by orinocor
Growth and Corporate Activity

The Board aims to establish the Company as one of the leading funds in the AltFi sector and to grow current assets significantly in the years ahead. In the short term this is likely to be achieved by small, ongoing issues of shares to new or existing investors. Once the Fund has added to its existing performance record and demonstrated the ability of the Investment Manager to generate a consistently high yield on the shares, a larger fund raise may be possible. At all times the Board will take into account the interests of existing Shareholders before increasing the share capital of the Company.

The Company came into existence largely as a result of a spin-out of GLIF. This company held a portfolio of investments in platforms that match borrowers and lenders together, with a portfolio of loans that had been arranged through these platforms. Your Group’s portfolio was seeded with a significant number, but not all, of these loans. Hence the two companies now have clearly different investment strategies. GLIF invests primarily into the equity of the platforms and seeks to achieve capital growth as the value of these platforms rises while SMEF aims to
produce a high ongoing yield for its investors with limited capital growth.

In March 2016 the Somerston Group made a significant investment into SMEF by buying 15 million Ordinary Shares from GLIF. It is the wish of the Boards of SMEF, GLIF and Somerston that SMEF is a truly independent company. Recent name changes, referred to in more detail below, seek to reinforce this evolution. SMEF is investing in loans originated by platforms that our Investment Manager considers to have a high level of credit experience, that undertake significant due diligence and originate loans that are amply secured and attractively priced. We also require these platforms to be open and transparent with us in all their dealings. The platforms we use are constantly reviewed and the Board believes that it is in Shareholders’ interests to contain the number of platforms used, by concentrating investments in loans originated via platforms that come up to our expectations. At a general meeting held on 3 August 2016, the investment policy of the Group was amended to allow greater exposure to high quality, alternative finance loans.

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