Vpc Specialty Lending In... Share Discussion Threads

[smidge21] 12/9/2022 08:08

Thanks Waterloo, had missed this.

It would be useful to see thinking into why the deep discount persists; what is it about the underlying assets or the management approach that causes concern to prospective investors. The exposure to highly volatile SPACs will surely be one factor. Is it the short duration of the book of assets? Many portfolios of unlisted assets are seeing widening discounts

Personally, I care little about the discount, seeing it as a buffer against today's risk-strewn markets but I recognise that institutional players have shorter horizons.

[spectoacc] 12/9/2022 07:56

Very interesting, thanks. Seems sensible, albeit this sort of thing really irritates:

"...Recommend convening an informal meeting of the Company’s institutional and
professional shareholders to agree the best way forward."


AKA stitch it up in advance, no input from the large number of private shareholders, no matter how many VSL they hold.

[waterloo01] 12/9/2022 07:37

Interesting

Re: Consultation with the Company’s shareholders and Board on potential alternative proposals to the discount-dependent tender offer in 2023

[jong] 08/9/2022 09:59

XD today. 2p per share payable on Thursday 6th Oct.

[chucko1] 08/9/2022 09:53

I do not believe that ALL that is happening is that they are selling assets to a connected buyer at par. Or at least, in any meaningful size.

No one would set up a fund in that fashion where a majority of assets are different to the denomination of the underlying fund (as is this case). These are experienced people who would not expose themselves to the added costs of selling and buying assets merely for the purpose of managing their FX hedging.

The idea of buying, say, USD assets when the GBP is strong only to sell them as and if it weakens is a non-starter. It sounds good, in that you are selling when the USD is strong, and buying when weak (so benefitting from the FX). But of course, the FX hedge itself takes all of that away by design, so all you are left with are the frictional costs of buying and selling illiquid assets.

REPOing the assets - now that is quite possible. I sell to you at par and agree to repurchase at par, and you keep the high coupon in the meantime.

[rambutan2] 07/9/2022 21:38

smidge21, thanks for the FX info. I remember that they recently raised $2.4bn for a fund with a similar strategy to VSL. So, an obvious buyer I suppose.

[smidge21] 07/9/2022 07:54

thx, and yet assets are being transferred to raise liquidity - FX banks are not in the business of fine tuning - especially for small scale hedgers - which is what VSL is.

With assets being transferred, the question is, which ones? Most likely is that it will be the longer duration assets - any other fund which is in accumulation mode isnt going to want an asset with a short outstanding term. Which implies is that periods of sharp FX hedge losses will necessarily shorten the average life of the book

[chucko1] 06/9/2022 19:56

The short average life of the portfolio defends against just about everything. 15% on 2/3 of the portfolio amounts to posting 10% additional collateral to the hedge providers.

In 8 months, that represents a period of about 1/3 the average life. In other words, 1/6 of the portfolio could expect to be "realised" in this period - just about 15%, coincidentally.

Were the FX changes to occur more rapidly, this would present different problems, but I cannot see that the hedge providers would not extend credit lines for a lengthier period given the portfolio dynamics.

The people running this will be all over these issues.

[smidge21] 06/9/2022 18:18

I own lots of VSL and I have been liaising with the fund manager on FX issues.

VSL is two thirds invested in USD assets; the rest are spread across EUR and Latam (based on latest fund report). Non-UK, non-equity assets are routinely hedged back to £ using instruments that have to be settled on a monthly timetable – it used to be daily.

This year £ has fallen 15% vs the USD and this would cause considerably liquidity issues for any fund invested in illiquid assets (they cant easily be sold to settle the FX contracts).

VSL gets around this by transferring, at par, underlying assets (from VSL) to other funds in the Group that are in investment mode. This is a liquidity bonus that similar funds don’t enjoy. What might happen if there weren’t other happy buyers of assets in-house is unclear.

If £ were to rise significantly, then the opposite would happen. Rather VSL would buy new assets as they became available.

[waterloo01] 01/9/2022 16:18

2p interest ex date 8th Sept and one assumes a similar amount of buying with the NAV update release.

[waterloo01] 01/9/2022 14:00

Looks good. Consistent 10% return and a 25% discount to NAV.

[rambutan2] 01/9/2022 13:54

July nav etc:



I noted that since April, the weighted average coupon on the balance sheet loans has risen approx 1% to 11.61%, whilst the weighted average remaining life of them has fallen approx 3.5mths.

[brucie5] 25/8/2022 09:43

Almost a 10% dividend according to Stocko. I wonder how posters here see the economic macro impacting the underlying businesses, which supply the dividend?

[cwa1] 25/8/2022 07:32

As expected...

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 2022. The dividend will be paid on 6 October 2022 to shareholders on the register as at 9 September 2022. The ex-dividend date is 8 September 2022.

[bluemango] 22/8/2022 21:18

Thanks. Logical explanation.

[scrwal] 22/8/2022 19:56

They have always done the divi cycle on a thursday since I've been holding - rns, xd 7 days later and paid 28 days after that.
Div is paid Mar/Apr Jun Sept Dec the xd is normally last thursday in a month.
You can see the divi history under the VSL financials.

[bluemango] 22/8/2022 16:42

Thanks scrwal. Seems we are interested in similar stocks - eg I hold this, DEC & SBLK, Also in more mainstream ones such as PHNX, CSN. And the more unknown VTA and STCM. All high yielding.

Anyway I digress. Can you tell me please how you know it's Thursday for the dividend announcement here? I've looked for a financial calendar for VSL but couldn't find one. Where do you get your info on dates please?

[scrwal] 22/8/2022 15:21

The rns should be this thursday , xd 1 Sept and paid 29 Sept. Last divi was late because they needed agm approval for things.

[dodger777] 22/8/2022 07:57

Ex dividend date last years was the 26th august with a declaration on the 19th. I hope they are not going to be late again with the dividend.

[rambutan2] 01/8/2022 23:08

June nav info:

[cousinit] 25/7/2022 14:49

Miton Global Opps/Nick Greenwood.

He was interviewed on Jonathan Davis's podcast. Essentially said very few marginal buyers in a lot of trusts so any material sellers just end up pushing prices lower as market makers only attempt to move small quantities of stock without walking down their bid.

[chucko1] 25/7/2022 13:58

Well, perhaps. It is beginning to look like another of those "what was I thinking by not buying a load down in the depths?"

Sorry, it escapes me - who/what are MIGO?

[cousinit] 24/7/2022 21:54

Sounds like MIGO picked up a chunk of the 2.6m shares from a forced seller