Vpc Specialty Lending In... Share Discussion Threads

[waterloo01] 03/8/2021 07:21

Decent uplift in NAV from the SPAC

[badtime] 02/8/2021 18:28

Hit the 90p mark ...now to see if it holds

[rambutan2] 30/7/2021 21:29

I've added recently having updated my view of VSL from being just high inc (albeit much safer than the mkt seems to believe) to that of being more of a barbell strategy ie 75% hi inc, 25% hi growth in a really interesting and otherwise difficult to access sector (fintech) which the manager seems to be at the heart of. All quite exciting. Below, a couple of recent snippets:

NEW YORK, June 14, 2021 – Apollo Global Management, Inc. (NYSE: APO) (together with its consolidated subsidiaries “Apollo”) today announced that entities, clients and funds managed by its affiliates (the “Apollo Funds”) have committed to invest up to $500 million in senior secured credit facilities originated by Victory Park Capital (“VPC”), a global investment firm with an extensive track record in asset-backed credit origination for emerging and established companies.

The new lending relationship between the Apollo Funds and VPC will focus on asset-backed lending (ABL) to companies that aggregate third-party sellers on Amazon and other e-commerce sites. VPC is a first mover in providing credit facilities to the industry’s leading players in this emerging, high-growth market...

[epistrophy] 30/7/2021 12:30

Just a note of caution. The VIH price is well supported at present because holders can still redeem for $10 when the merger closes. Post merger it will be much more volatile (likely in the downward direction... unless there is another crypto boom!)

[badtime] 30/7/2021 09:42

Happy days...thanks for posting all the info

[davebowler] 30/7/2021 09:27

Liberum;
Equity positions drive 3.9% NAV return in June

Mkt Cap £237m | Share price 85.2p | Prem/(disc) -19.8% | Div yield 9.4%

Event

VPC Specialty Lending Investments' NAV per share at 30 June 2021 was 106.2p, representing a 3.9% NAV total return in the month. The YTD NAV total return is 15.2% primarily due to large NAV uplifts in January (+7.1%) and June (+3.9%). June's performance was driven by gross revenue returns of 1.0% and capital returns of 3.9%.

The factsheet has not yet been published but the uplift from capital returns in June was partly due to VPC Impact Acquisition Holdings III’s (VPCC) agreement to combine with Dave Inc, a banking app that launched in 2017. Following the transaction, Dave will become a publicly traded company with an expected equity value of $4bn. The cost of VSL's investment is $1.25m and the implied transaction value of the position is $7.7m. This would represent a 1.6% NAV increase. VSL will hold the Class A shares at a 30% discount to reflect illiquidity and closing risks. The discounted value of $5.4m implies a 1.0% NAV increase. VSL currently owns 1.0m Class B Shares and 0.8m private placement warrants in VPCC. The transaction is expected to close in Q3 2021.


Liberum view

June was another strong month of NAV performance for VSL, driven by capital returns. The last 12 months has been an active period for equity investments, with the manager agreeing a number of SPAC deals. The Dave Inc transaction value implies a high multiple on capital invested for VSL, demonstrating the favourable economics for SPAC sponsors in the US. VSL's equity investments have contributed meaningfully to NAV performance in Q4 2020 and 2021. The majority of the equity upside in 2021 relates to unrealised gains from another SPAC transaction (VIH's merger with Bakkt), but several equity investments have also been realised over this period (including positions in Bread and Elevate Credit). Approximately 20% of VSL's NAV is invested in equity positions. Despite the strong performance from both the debt and equity investments, the discount remains relatively wide (c.20%). One course of action worth considering is a commitment to returning a percentage of realised profits from the equity investments to shareholders in order to address this.

[chucko1] 30/7/2021 08:38

Even if you do not own this for the equity investments, the net monthly returns are stable and high, and the discount of 20% is terrific value still. If they end up continuing to make good on the equity side, especially beyond the end of the year, they would be able to lock in a lot of this value.

It's interesting to note how stable VIH has been at a tad below $10. The same as the strike price of the options they own.

The update suggests a lot of other equity participations have done well. This management have not put a foot wrong - not even a toe. I put this down to the decision makers generally being traders and risk managers, not lawyers or accountants.

[spectoacc] 30/7/2021 07:11

VSL still knocking it out the park:



Net Asset Value

The Company is pleased to provide its monthly net asset value per share ("NAV") update.


As at 30 June 2021, the unaudited estimated NAV (Cum Income) per Ordinary Share (ISIN GB00BVG6X439) was 106.19 pence.



Performance

The Company also announces the cumulative NAV total return performance as at 30 June 2021 as follows:


Monthly Return - 3.87%

[brucie5] 23/7/2021 15:35

Thank you. 19% discount, and I'm in for a few.

[ramellous] 23/7/2021 14:26

It updates automatically on the H.L site.

[brucie5] 23/7/2021 14:21

Thanks for all the excellent coverage here. Can you please advise on where/how to get up to date info on the current discount, which I understand to be c. 18%? Thanks.

[davebowler] 14/7/2021 08:59

Stifel -
By and large these funds should be on investor’s radar as they offer good potential returns while also
being cheap. VPC Specialty Lending is a clear outlier as it trades at a -16% discount while offering the
highest potential return. These could also be further boosted if its second SPAC closes a deal as the
first and third are in the midst of closing a transaction. We were surprised to see CVC European Credit
providing such a healthy yield as it has been boosted by leverage and the fund also provides quarterly
tenders at close to NAV. In December 2020, the gross yield to maturity was significantly lower at 6.6%
with no gearing and hence there is a marked change in the investment profile of the vehicle.

[chucko1] 06/7/2021 17:22

If true [seller out], that would be significant. It previously hit 92p once VIH hit about $20. 84p is a rather large discount even with VIH now at $10. Bear in mind the further (smaller) SPAC success (announced a few weeks back) and I would argue that even the new higher price (today's close) of 85.5p is not expensive. 9.5% yield also offers a fair reward for the risk taken.

As I have argued before, I see an excellent management team as largely underpinning this value.

[spectoacc] 06/7/2021 15:34

Not much trade on it today, but the recent seller seems done.

[davebowler] 28/6/2021 09:18

Liberum;
Mkt Cap £234m | Share price 84p | Prem/(disc) -17.8% | Div yield 9.5%

Event

VPC Specialty Lending Investments' NAV per share at 31 May 2021 was 102.2p, representing a 1.0% NAV total return in the month. The YTD NAV total return is 11.0% primarily due to a large NAV uplift in January. May's performance was driven by gross revenue returns of 1.0% and capital returns of 0.5%. The uplift from capital returns was driven by Sunbit Inc's Series D funding round and the closing of the Katapult Holdings merger on 9 June. The position was previously held at a 30% discount to the value implied by the share price to reflect illiquidity and deal closing risks.

We note the potential for further capital gains in June. VPC Impact Acquisition Holdings III (VPCC), a SPAC sponsored by an affiliate of VSL's investment manager, has entered into a definitive agreement to combine with Dave Inc, a banking app that launched in 2017. Following the transaction, Dave will become a publicly traded company with an expected equity value of $4bn. The cost of VSL's investment is $1.25m and the implied transaction value of the position is $7.7m. This would represent a 1.6% NAV increase. VSL will hold the Class A shares at a 30% discount to reflect illiquidity and closing risks. The discounted value of $5.4m implies a 1.0% NAV increase.

[rambutan2] 25/6/2021 04:25

Board gets backed at the AGM:

[rogerrail] 24/6/2021 14:11

Yes, keeps on paying.

[cwa1] 24/6/2021 09:19

Very nice dividend arrived this morning

[chucko1] 21/6/2021 13:15

Wow! - it must be a sign.

[colonel a] 21/6/2021 11:38

Barclays are letting me buy again.

[badtime] 14/6/2021 21:20

Welcome MRF ..at last...smile

[chucko1] 14/6/2021 12:07

I think the management are extremely competent.

[redhill9] 14/6/2021 12:01

It is the "modern" part of the portfolio that makes me cautious about adding, although the yield remains very tempting. The SPAC activity could over the next few years either be worth a lot or very little and may prove to be a distraction from the core business of generating lots of reliable dividends, which was my original reason for investing in VPC. On the other hand, the management do seem to know what they are doing........

[my retirement fund] 14/6/2021 11:12

Taken my first stake this morning, I understand it gives a good return.

[chucko1] 14/6/2021 10:15

Include the fact that the "modern" part of the portfolio has basically zero additional value assigned to it relative to the share price prior to the first announcement of SPAC activity a few months back. And the underlying loan portfolio keeps pumping out decent net income.

The only thing not to like is common to possibly most stocks out there - new variants side-stepping (partially, or worse) vaccines. But they saw good portfolio performance pre-vaccine anyway, so even that would not be anywhere near as difficult for the share price as it was a year or more ago. Actually, it is to like as it is another opportunity of buying from weak hands!