Vpc Specialty Lending In... Share Discussion Threads

[waterloo01] 05/10/2021 13:08

Director 1st purchase is always reassuring.

[rambutan2] 30/9/2021 03:29

Factsheet:

[chucko1] 29/9/2021 10:12

I sold a few into the share price rise on this. The NAV has become more volatile owing to the SPAC stuff etc. However, I still have a lot and the 19% discount fully compensates for the higher equity uncertainty (which may go bananas anyway, although potential rising yields may destroy a lot of value before the profits can be realised).

I have 8% of my equity portfolio in this.

[davebowler] 29/9/2021 09:17

Liberum;
Equity upside drives 20% YTD NAV return

Mkt Cap £245m | Share price 88p | Prem/(disc) -19.1% | Div yield 9.1%

Event

VPC Specialty Lending Investments' NAV per share at 31 August 2021 was 108.7p, representing a 3.9% NAV total return in the month. The YTD NAV total return is 19.8% primarily due to large NAV uplifts in January (+7.1%), June (+3.9%) and August (+3.9%). August's performance was driven by gross revenue returns of 1.0% and capital returns of 3.8%.

The factsheet has not yet been published but the uplift from capital returns in August was partly due to VPC Impact Acquisition Holdings II’s (VPCB) agreement to combine with FinAccel, the parent company of Kredivo, a buy now pay later platform in Indonesia. Following the transaction, FinAccel will become a publicly traded company with an expected equity value of $2.5bn. The transaction is expected to close in Q3 2021. The cost of VSL's investment in VPCB is $1.25m and the implied transaction value of the position is $12.0m. This would represent a 2.6% NAV increase before fees. VSL will hold the Class A shares at a 40% discount to reflect illiquidity and closing risks. The discounted value of $7.9m implies a 1.6% NAV increase before fees.


Liberum view

August 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 FinAccel transaction value implies a high multiple on capital invested for VSL (6.3x at the discounted value), demonstrating the favourable economics for SPAC sponsors in the US. In total, we calculate a 7.1x gross unrealised multiple on the $5.4m invested across the four SPACs.

VSL's equity investments have contributed meaningfully to NAV performance in Q4 2020 and 2021. In addition to unrealised gains on SPAC transactions, several equity investments have been realised over this period (including positions in Bread and Elevate Credit). Approximately 25% 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.19%).

[spectoacc] 29/9/2021 08:12

Another cracking monthly return, taking NAV to over 108p.

[waterloo01] 07/9/2021 17:59

UK tax news makes the move from paying a dividend to paying interest all the more shrewd.

[ramellous] 05/9/2021 09:46

Not letting me post link but look up Marketrealist.com

VPC Impact Acquisition Holdings (VIH), the SPAC that’s taking cryptocurrency exchange Bakkt public, was trading higher on Sep. 3. Why is VIH stock going up, and should you buy the stock on speculations of a short squeeze?

[spectoacc] 04/9/2021 18:49

Could be a nice bonus - not that VSL need it to justify going up again post-XD.

[epistrophy] 04/9/2021 14:17

It was up to about $12.50 in out of hours trading. I'm not really convinced it will short squeeze, but there was an awful lot of volume yesterday so who knows.

[chucko1] 04/9/2021 10:55

VIH has not really moved much. Up a little.

Were it to go mad, they are still locked in for another few months - in theory. But they could find some sort of hedge I would think.

[epistrophy] 03/9/2021 20:55

The SPAC VIH is now trending on WallStreetBets as a short squeeze candidate. Not sure how relevant this is to the investment case, but it is entertaining to watch.

[rambutan2] 31/8/2021 15:47

Noted:

E-commerce roll-up companies are big in the United States, and Wonder Brands wants to be that for Latin America.

The Mexico-based company closed on $20 million in seed funding, co-led by ALLVP and Mountain Nazca, with participation from CoVenture, Victory Park Capital, GFC, QED (Fontes), Korify Capital and Endeavor Catalyst.

Wonder Brands co-founders Nicolás Gonzalez Luna and Federico Malek came together to start the company in January 2021 to acquire digital brands in the MercadoLibre and Amazon ecosystem. It then leverages its technology to scale their operations and grow sales by taking care of the marketing, analytics, supply chain management and working capital needs of the companies. It focuses on companies in the areas of home and garden, sports and fitness, beauty and personal care.

[rambutan2] 31/8/2021 15:36

"During the month, the Company invested in one new balance sheet investment"

[rambutan2] 31/8/2021 15:31

As at 31 July 2021, the unaudited estimated NAV (Cum Income) was 106.57 pence:

[colonel a] 31/8/2021 14:06

Not a bad NAV increase.

[jong] 26/8/2021 09:55

XD today (2p per share paid on 23 Sept)

[chucko1] 19/8/2021 09:29

5yrs is 75.4% (11.9% ann.) with divs reinvested in VSL stock. 52.8% (8.9% ann.) with divs reinvested in the money markets (i.e. your bank!).

HL seems pretty bad at these sorts of calculations. This is a shame as for a high yielding stock like VSL, the differences are highly significant.

[ramellous] 19/8/2021 07:52

5yr total return according to HL charts is just over 60%

[spectoacc] 19/8/2021 07:47

I'd love to see a chart of VSL with reinvested qtrly 2p's :)

[cwa1] 19/8/2021 07:41

19 August 2021

VPC Specialty Lending Investments PLC

( the " Company")

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 2021. The dividend will be paid on 23 September 2021 to shareholders on the register as at 27 August 2021. The ex-dividend date is 26 August 2021.

The Company has elected to designate all of the interim dividend for the three-month period to 30 June 2021 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] 03/8/2021 10:25

The final sentence is interesting, particularly as VPC committed to reducing the discount at the time of the continuation vote last year.

[davebowler] 03/8/2021 09:33

Liberum;

VPC Impact Acquisition Holdings II (VPCB), a SPAC sponsored by an affiliate of VSL's investment manager, has entered into a definitive agreement to combine with FinAccel, the parent company of Kredivo, a buy now pay later platform in Indonesia. Following the transaction, FinAccel will become a publicly traded company with an expected equity value of $2.5bn.

VSL currently owns 1.0m Class B Shares and 0.8m private placement warrants in VPCB, held at cost of $1.25m. The transaction implies a value of $10 per Class A share. 70% of VSL's Class B shares will convert into Class A shares with an undiscounted implied transaction value of $7.2m. The remaining 30% of the Class B shares have an implied value of $3.1m. These shares have a 5 year vesting period but are fully vested if the VWAP reaches defined levels for 10 out of 20 trading days at any time (defined levels range from $12.50 to $15.00 per share). VSL will hold the Class A shares at a 40% discount to reflect illiquidity and closing risks. The discounted value of $6.2m implies a 1.5% NAV increase.

The private placement warrants have a strike price of $11.50 per share and expire five years after the closing of the transaction. The options will be valued using a Black Scholes model and the initial value is $1.7m.

The Class A shares will be subject to a two-year lockup and the transaction is expected to close in Q4 2021/Q1 2022.


Liberum view

In the recent June monthly report, the company announced that the valuation policy for warrants issued by SPACs has been amended. This follows a statement from the SEC's Division of Corporate Finance. VSL had previously held its private placement warrants at zero. The valuation policy is now as follows:

Post-IPO - all shares will be held at cost.
Deal announcement and post-close lock-up periods - Founders and sponsor shares will be valued at the closing price as of the valuation date, with a discount applied and amortised throughout the duration of the process to account for deal closing risk and liquidity.
Private placement warrants - valued utilising an option pricing model/Black Scholes model.
The transaction value implies a high multiple on capital invested for VSL (6.3x at the discounted value), demonstrating the favourable economics for SPAC sponsors in the US. VSL's equity investments have been highly accretive to NAV in Q4 2020 and 2021. In total, we calculate a 7.1x gross unrealised multiple on the $5.4m invested across the four SPACs. We calculate a total 7.6% NAV increase from the SPAC transactions in 2021 after fees. Several other equity investments have also been realised over this period (including positions in Bread and Elevate Credit) and we note other investments such as wefox are demonstrating strong operating performance. Approximately 25% of VSL's NAV is invested in equity positions. We believe the company should consider committing to return a percentage of realised profits from the equity investments to shareholders in order to help address the discount.

[ramellous] 03/8/2021 07:35

SINGAPORE] FinAccel, the parent company of Indonesian fintech startup Kredivo, agreed to go public in the US through a merger with a blank-cheque firm that values the combined companies at US$2.5 billion.
FinAccel is merging with VPC Impact Acquisition Holdings II, a special purpose acquisition company sponsored by Chicago-based Victory Park Capital Advisors LLC, the companies said in a statement on Tuesday.
The deal will include a private investment in public equity, or PIPE, of US$120 million from investors including Marshall Wace, Corbin Capital, SV Investment, Maso Capital and Victory Park Capital. Separately, exiting backers Naver, Square Peg Capital and Jungle Ventures agreed to invest US$55 million of equity.

[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