Vpc Specialty Lending In... Share Discussion Threads

[redhill9] 15/9/2020 18:49

Only just realised the July update from VSL is available. All seems good to me. Their "Highlights" below but they also mention all income for July was collected in August, with 31 July NAV of 90.95p.

Monthly Investment Highlights

The Company generated a total NAV return of 1.30% for July 2020. The revenue return was 0.95% and the capital return was 0.35% for the month;

The gross revenue return generated during the month continued to be in line with expectations; and

The capital return was primarily driven by the unrealised gain on the Company’s Elevate (NYSE: ELVT) equity investment and the accretion from the share buyback programme.

[redhill9] 28/8/2020 17:30

Just announced another 100k buyback...... That makes a neat 1,000,000 for the month at a total cost of £646,000 which should be comfortably over £200k less than NAV.

Out of interest, since late May when the current round of buybacks started, VPC have purchased 20.4m shares at cost of £13.6m representing almost 6.7% of their shares on the market at that time. Average price paid was 66.7p compared to average NAV of, say, 89p so c.£4.6m of NAV "released" to remaining shareholders.

[redhill9] 28/8/2020 16:19

SpectoAcc, There's been 8 share buybacks in August with 7 of them for 100k shares (the other was for 200k). I'm guessing there might be another one for 100k announced about 5pm today......;}

[spectoacc] 28/8/2020 15:51

Well called @redhill ;)

"Date of purchase: 27 August 2020


Number of Shares purchased: 100,000 Shares


Highest price paid per Share: 63.00 pence

Lowest price paid per Share: 63.00 pence

[redhill9] 27/8/2020 11:55

Thanks SpectaoAcc, he's added to my filter list.

Agree re chucko1 post.

[spectoacc] 27/8/2020 11:39

At least a dozen @redhill9, this last one has come up as Filtered too :)) All the same troll.

@chucko1 - good summary in post 560, thanks.

[petethepict] 27/8/2020 11:33

You're dead right, guys, spectoacc has been on my filter list for years. Bit of an old fool and nasty with it, as I remember.

[redhill9] 27/8/2020 11:08

Probably. He's one of the group of half a dozen I put on filter as being all the same person.

[1tcm1] 27/8/2020 10:55

Here is the list of shares upon which spectoacc has been making fatuous comments in precisely the last 3 months. 50 in all!

It seems like many more than that doesn't it? Aren't we lucky to be having such a compendious nutter-troll to help us with our investment decisions?

AEWU,
AIRE,
AJOT,
ALM,
AVCT,
BCPT,
CRS
CYN,
DSM,
EDIN,
EPIC,
ERO,
ESP,
FAIR,
HCFT,
HOT,
HWSL,
IPO,
JEFI,
JZCP,
KKVL,
KKVX,
KMR,
LXI,
MMIT,
MVI,
NRR,
NSI,
PE,
RLE,
RSE,
RSG,
RUTH,
SHED,
SIR,
SPDI,
SPPC,
SQN,
SREI,
SSIF,
STP,
SUPP,
SWG
TFG,
UAI,
UTL,
VIN,
VSL,
W7L
WHR,

[chucko1] 27/8/2020 10:54

Well, I managed to sell a quarter of what I bought yesterday - that was until the oaf who flogged 100k trampled all over my strategy! But I am happy to hold at 12.3% yield - now 12.7% with the ex-div 2p drop.

But 100k is nothing for VSL to buy each day - they can do this indefinitely, should they wish, and as I have argued before, even if they run themselves off (not really necessary) you can enjoy an IRR of 25% or more.

Or an IRR of around 16.5% over 5 years if they do not run-off and they write off 4x their previously announced credit reserves. And trade at about a 10% discount thereafter.

[redhill9] 27/8/2020 09:48

The company have been buying shares in 100k chunks recently.

Edit: apologies, I misread SpectoAcc's post

[spectoacc] 27/8/2020 09:13

Down more than the XD seems a tad harsh, but someone swept 100k off the bid at 63p earlier.

[spectoacc] 21/8/2020 12:24

Interesting comment in last paragraph, thanks. Valid points, but surely having been bitten outside core market previously, they'll be more careful this time...maybe.

And a heck of a lot in the discount even if they did go a bit wrong.

[davebowler] 21/8/2020 09:29

Stifel;

ICG Longbow – Manager on track to be fastest in de-risking legacy portfolio

VPC Specialty Lending – New loans extend international reach

Blackstone GSO – Webinar highlights

Key Points
ICG Longbow – Manager on track to be fastest in de-risking legacy portfolio

Since the Covid lockdown, all of the property debt funds (ICG Longbow, Real Estate Credit and Starwood European Real Estate) have been trading at double digit discounts. In this new environment, it is clear that all three managers will become more discerning in their underwriting standards and loan selection given the wide-ranging impact of the virus on businesses. We view new loans that have been committed post-February as potentially being more robust than the pre-Covid portfolio, as these new standards are incorporated into the investment process. ICG Longbow as the smallest and most concentrated of the three funds (typically this would be viewed as a negative) has committed just under 20% of the portfolio post-February which is materially higher than its larger diversified peers. This is a significant positive in our view, and at least on a fundamental basis should mean ICG Longbow trades closer to NAV than its peer, whereas currently it has the widest discount of -24% and a historic dividend yield of 8%.


With regards to new loans, the manager states that declining LIBOR has relatively little impact on their potential return profile as they are guided by underlying project returns and an equitable split between debt and equity. While return potential has certainly gone up following lockdown, the manager will continue to target between 8-10%, but will also look to reduce risk (i.e. upgrade quality of portfolio). We think both points are valid and sensible. We reiterate our Positive recommendation. (Analyst: Sachin Saggar).


VPC Specialty Lending – New loans extend International reach

This week VPC released the Q2 letter. We were looking for two key elements. The first was the extent of de-leveraging that has taken place. While there is no clear metric disclosed we note the gross portfolio has fallen from c.£430m at 31/03/20 to c.£380m at 30/06/20, largely through the fund repaying company level debt. The second element was new investments and whether capital has been deployed into securities versus private loans (previously flagged). We have mixed feelings on the announcement of one new UK loan, one Asian and a potential third in Australia. While we can understand the desire to expand outside of the US, the fund’s track record abroad has been mixed with a UK loan to Borro encountering difficulties and the recent announcement of the UK subsidiary of Elevate being placed into administration (although no NAV impact is expected). The expansion into Asia and potentially Australia is another matter, as culture, time differences and logistics are clearly more complex. In our experience, rapid expansions outside your home market are fraught with issues and many funds have tended to stumble. (Analyst: Sachin Saggar).

[redhill9] 20/8/2020 14:42

Yes, I just added today. I'm a little puzzled why the market hasn't caught-on to this share. The yield and discount combined make this very attractive.

Certainly there is risk but the share price seems to have bags of room built in for that, plus the portfolio has the flexibility for the management to en-cash substantially if required.

[chucko1] 20/8/2020 13:03

I added a few yesterday. As time goes by, the NAV mathematically pulls higher. "Boring" is better for this share than almost any other I can think of!

Think "bonds".

[redhill9] 20/8/2020 09:53

Dividend maintained as expected indicating a yield of around 12.4% at the current share price with the dividend seemingly more than covered by revenue income in the quarter.

Together with the discount to latest NAV of c.28%, there does seem a fair margin of comfort in the current share price.

[spectoacc] 20/8/2020 07:56

Only seems 5 minutes since the last one.

[cwa1] 20/8/2020 07:55

For the record:-

DIVIDEND DECLARATION

The Board of Directors of the Company has declared an interim dividend of 2.00 pence per share for the three-month period to 30 June 2020. The dividend will be paid on 17 September 2020 to shareholders on the register as at 28 August 2020. The ex-dividend date is 27 August 2020.

The Company has elected to designate all of the interim dividend for the three-month period to 30 June 2020 as an interest distribution to its shareholders, thereby "streaming" income from interest-bearing investments into dividends that will be taxed in the hands of shareholders as interest income. No income tax will therefore be deducted at source from this, or from future interest distributions.

[redhill9] 18/8/2020 10:56

rambutan2, thanks for that Staude link.

Interesting read from a VPC perspective - Staude seem to be taking credit for the increase in VPC share price at 30 June since the lows in April as being due to their campaign, which rather ignores the overall market recovery in that period! A tad disingenuous?

[rambutan2] 17/8/2020 22:29

Yes, cautiously optimistic. Well worth a read:

[rambutan2] 17/8/2020 21:43

Of historic interest:

[redhill9] 17/8/2020 14:24

Q2 newsletter just published.

hxxps://vpcspecialtylending.com/announcements/

All seems on track, tone could be described as cautiously optimistic I think. Dividend declaration due in about a few days with, I'd guess, continuation of the 2p per quarter.