Vpc Specialty Lending In... Share Discussion Threads

[brucie5] 06/12/2024 14:12

Added further. Must be mad.

[brucie5] 29/11/2024 14:53

Thanks Craigso, yes, I think I realise that. Though how to calculate the actual value of the interest being paid and tease that our from the effective capital return? I think I also realise that the seeming death spiral derives from the very fact that you highlight: best part of the loan book being sold off, leaving an increasingly undesirable rump. Hence my analogy of the old banger. I think the old school term for this style of opportunistic investing is cigar butt investing? I hasten to say it doesn't characterise the majority of my investments, but there again, most value propositions are 'good value' for a reason, though ideally, the reason given turns out to be not wholly rational.

[craigso] 29/11/2024 12:35

Hey Brucie,

The dividend yield isn't real. It's just distributions to shareholders of loans being repaid by borrowers. (which obviously stop providing returns to VPC once repaid)

This thread is worth a read through, but ultimately VPC has:

1. some PE assets that nobody thinks are worth much. For example a big holding is wefox which, if you follow CHRY, you know isn't looking great. And if Razor goes bust nobody would be surprised...

2. a loan portfolio where the better loans are being repaid and the dodgier ones are left behind.

30p isn't a terrible entry point for an investment within an appropriate tax wrapper, but it's going to be a long wait to get 40-50p back, assuming nothing major implodes...

[brucie5] 29/11/2024 10:30

Nibbled some more with some spare dividend cash. Feeling reckless like a boy racer at the wheel of old banger he's picked up for a tenner. The wheels could come off; but on the other hand...

[brucie5] 28/11/2024 10:30

It's so difficult to know when's the right time to buy a falling knife: the common wisdom is 'never!'. But in my experience there are times to buy sectors, if the value is there and market has simply decided to ignore. I note that WShak is buying SEIT down, which is another that I hold among a string of such. Debt and infrastructure ITS are simply out of fashion. Afaik, VSL used to be highly regarded before it decided to wind down and 'return value to shareholders'. Lols. If only they'd stuck to their regular knittting!

[solarno lopez] 28/11/2024 09:35

I wish I had your confidence Brucie5 as I am losing a packet

[brucie5] 28/11/2024 09:14

Nibbled some more last thing yesterday. @30.

[brucie5] 27/11/2024 14:05

Forgive me if this has already been pasted but it gives an intelligent perspective on the sector's woes... from one year ago!!! Since when all shares mentioned have proceeded south, which may been seen either as vindication of Stevenson's analysis, or proof positive that just because something is 'cheap' doesn't mean it's the sensible thing to buy!



According to this data set from the IC there hasn't been much/any recent director buying since 2021, but again, you may wish to correct me:



Obviously William Black going >3% quite recently is intriguing, hence my curiosity around what there is left to go 'wrong' at this price..?!

I dare say everyone here has already read Oakbloke's commentary from March this year and updated
in July. The fact that is has proven not to be 'on the money' does not imho prevent it from offering some useful background to the current malaise. My main difficulty is understanding the totality of the various moving parts.




Needless to say I'm watching carefully at this level and may well take a further nibble.

[brucie5] 27/11/2024 09:59

Hello again Craigso!
Would anyone care to tell me why, in detail, at 50% discount and dividend @26% and assets being gradually returned to investors, this is not in bargain territory, whatever the trajectory thus far?
I'm assuming the incompetence/accident proneness/misfortune of management has been somewhat written into the current share price and offering.
Reason I ask is that I hold, but am reluctant to add.
But why not?

[craigso] 22/11/2024 09:08

A strong dollar will be a feature of Trump 2.0 - his policies are going to be inflationary and US interest rates will stay higher for longer.

Both on the lending side and the FX side this will be good for VPC. No need to rush any more than they are already doing.

[redhill9] 21/11/2024 15:18

Except liquidating significant assets in a rush may further indicate how much the NAV has been overstated, there may not be much US$ cash reserves to convert to Sterling, and they may already have hedged as much as they can........

Just being realistic!

[rogerrail] 21/11/2024 14:07

Clutching at straws here, sterling has depreciated 6% v dollar since end of September, if it carries on like this the labour government will have achieved what the fund managers failed to do. Hoping they fund can liquidise significant assets whilst the pound is weak, convert cash reserves to sterling, and pick a good point to hedge what they can't.

[waterloo01] 19/11/2024 12:02

Well that's a disappointment re MPL.

Do we still have a stake in BAKKT Edit: See we only have a rump holding.

[cwa1] 19/11/2024 10:54

Clearing crypto post since removed

[papy02] 18/11/2024 21:02

Dunno what other investments he has, but the fact he had/has a declarable holding in MPL (a clear scam) doesn't encourage me to pay attention to his purchase here.

[waterloo01] 18/11/2024 17:04

Hope he knows something more than we do!

[cc2014] 14/11/2024 09:01

I think the problem is pretty simple as we've agreed before Specto.

QE and government policy has supported zombie companies since 2008ish. With the reversal of that stimulus the zombie companies are getting found out.

Regrettably there are very of them, Homebase being yesterday's example.

We are entering the phase now where these companies can't survive even with rolling the debt as they are loss making plus we are no longer playing "pass the parcel" as ready buyers for anything regardless of the weakness of the balance sheet have disappeared.


I'm afraid the poor fund managers who bought anything at the top of the market a few years ago are getting found out. And so are investors who were unable to sift the good from the bad. It's a necessary thing to get back to a properly functioning economy

[spectoacc] 14/11/2024 07:21

Wish I didn't get the feeling that this is always how it works - debt funds, infrastructure, renewables, REITs. NAV is "Not Asset Value".

[marksp2011] 14/11/2024 07:18

Nicholasblake
I hold a variety of debt/credit funds.- some others have taken a share price hit others have steamed ahead. Of the 8 I hold 1 has taken a serious NAV hit and this is it.

Personal view is that the NAV and thus the fees have been consistently overstated and over paid.

It fees should be paid on the share price to align fund manager and owner interests

[nicholasblake] 13/11/2024 20:33

@marksp2011 The loans were never bank quality and maturity was an intention rather than a thou shall not pass event. Add in FunTech investors all pulling out of the sector at same time and not probably a lot the managers could do when their debtors say they can’t pay and ask for an extension.

[solarno lopez] 13/11/2024 19:17

Are you saying the managers are muppets ?

[williamcooper104] 13/11/2024 19:01

Yep - Oct 2022 was well into the rate rise bear market So you do wonder