Vpc Specialty Lending Investments Plc

-1.10 (-1.43%)
Share Name Share Symbol Market Type Share ISIN Share Description
Vpc Specialty Lending Investments Plc LSE:VSL London Ordinary Share GB00BVG6X439 ORD GBP0.01
  Price Change % Change Share Price Shares Traded Last Trade
  -1.10 -1.43% 75.80 225,111 16:35:13
Bid Price Offer Price High Price Low Price Open Price
75.80 76.00 77.80 76.00 77.80
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Trust,ex Ed,religious,charty -1.28 -22.12 - - 210.93
Last Trade Time Trade Type Trade Size Trade Price Currency
16:35:13 UT 2,500 75.80 GBX

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Date Time Title Posts
25/5/202319:06VPC Specialty Lending Victory Park 1,450

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Posted at 25/5/2023 17:55 by fisherpaul64
Likewise voted no.VSL has been running this show pretty well and selling when assets are at deflated prices does not make sense. Have been through a couple of corporate wind ups and neither were good news for share holders but very good news for the Directors. Hope this management team are more honest. Concerns. Firstly VSL does not sell assets on at a huge discount to other companies they have a vested interest in. Secondly that the Directors do not bring in external consultants or rehire themselves at vastly inflated rates eroding the money to be redistributed. As for time lines who knows but expect the 80:20 rule. 80% will be sold in next 24 months, the rest who knows when unless it's a fire sale.
Posted at 16/3/2023 12:38 by scrwal
The share price is somewhat irrelevant unless you are buying. The wind-down is almost certain to take place so realisable nav is more important for a holder now.
Posted at 16/3/2023 11:02 by dodger777
Just a slow drip south again for the share price 🙄
Posted at 03/1/2023 19:55 by smidge21
My hunch is this:

As at end March 22, the company reported that "the weighted average remaining life of the asset backed lending investments is 24 months". Over the summer, the turbulence caused by the currency hedge most likely saw longer duration assets sold (to in-house buyers looking to place money for the medium term), this would see the average asset life fall. The post Truss recovery in £ would have returned some cash - this may well not have been fully invested. The result is a very short dated asset pool, likely to run off within the projected two-year wind-down timetable that has been floated. VSL is likely awash with cash and so capital returned to investors is likely to be heavy over 2023. The dividend flow may soon dry up while the share price should start to creep to NAV.


Posted at 27/10/2022 12:00 by ctrader3
The Telegraph

Rishi Sunak will help this fund’s returns – and it’s on offer at a bargain price
Richard Evans - 5h ago

If Rishi Sunak’s mere arrival in 10 Downing Street really does push down how much the Government pays to borrow, which is what seems to be happening, it will be positive for the listed fund we cover today – and others that offer “bond‑like” income.

To briefly recap the reasons, discussed here several times in recent weeks, investors expect income‑producing assets to yield more than the “risk‑free” return from government bonds or gilts (the term “risk‑free” assumes that the bonds are held to maturity, so price fluctuations become irrelevant, and does not cover the risk posed by inflation).

So when that risk‑free return goes up, as it did very sharply indeed after the mini‑Budget, the market ensures that less safe bond‑like investments continue to yield more than gilts. It does this, of course, by marking down prices. Hence the damage done to property, infrastructure and bond funds in recent weeks.

Now that this process has gone into reverse with the prospect of financial stability from the new administration, we can expect a recovery in the share prices of listed funds that invest in these assets.

One such is VPC Specialty Lending Investments. It makes loans to businesses, mostly American, which typically lend the money on to their own customers. These businesses are often tech start‑ups such as online providers of car loans and other types of short‑term consumer lending.

That type of lending may strike readers as quite risky, but VPC ensures that its own level of risk is considerably lower.

“We secure our loans against the loan books of our customers,” Gordon Watson, lead manager of the trust, tells Questor. “But we also lend only 80pc‑90pc of the value of those loans, which means there is a buffer before we suffer any loss should a customer experience a default.

“On top of that, we have a dedicated risk team and monitoring system that reviews the companies we lend to on a daily, weekly and monthly basis. We have had a few defaults, but in many cases we were able to recover much of what was owed.”

This steady source of income has enabled the trust to pay a consistent annual dividend of 8p a share since 2018. At the current share price of 78.5p this equates to a yield of 10.2pc – comfortably more than the 3.6pc offered by gilts due to be repaid in five years.

Better still, VPC has the scope to make more interest on its loans. They are all “floating rate”, which means its customers pay more as interest rates generally rise, but the trust’s loans are also typically of short duration, such as two years, so as it receives its capital back when existing loans mature it has the ability to relend the money at higher rates.

The trust does acknowledge, however, that an environment of rising rates does make defaults in its clients’ loan books more likely, which could affect its returns.

Nick Greenwood, who manages the Migo Opportunities investment trust, has about 1pc of his fund’s money in VPC.

“It is good at what it does,” he says. “It offers quite a large dividend, although this was even more attractive when interest rates were 1pc instead of 4pc; that change takes away a bit of a prop for the shares because people were buying these trusts when they were starved for yield elsewhere. There was a big premium relative to gilts, which has now gone.

“But over the longer term fundamentals will come back into play, by which I mean that investors will begin to appreciate the scope for trusts such as this one to raise their dividends.”

He points out that VPC’s 25pc‑plus discount has attracted the attention of two hedge funds, which eye the chance of a big profit if, for example, some of the trust’s assets can be realised at par value and returned to investors. Thanks to the short duration of its loans, this could be a simple enough process.

“You have a decent yield, the chance of dividend growth and a potential catalyst for narrowing the discount,” Greenwood says. “I was lucky enough to buy my stake at prices as low as 71p, but had I not done so I would be inclined to invest at the current price too.”

Questor says: buy

Ticker: VPC

Share price at close: 78.5p

Posted at 13/9/2022 10:44 by jeff h
VPC Specialty Lending faces investor demand for 100% exits

VPC Specialty Lending (VSL), the high-yielding backer of loan platforms, has come under renewed pressure from shareholders to do more about its yawning share price discount.

Metage Capital and Staude Capital, which last year teamed up with Asset Value Investors (AVI) for a battle over discount controls at hedge fund Third Point Investors (TPOU), have called for the £210m VSL to offer investors a chance to take all their money out at asset value every five years.

The five-yearly 100% exit opportunity would replace the 25% tender offer the 10% dividend yielder has said will take place if its shares trade more than 5% below net asset value in the three months before next year’s annual general meeting.

Shares in the investment trust, which two years ago won a Citywire award for best-performing specialist debt fund, currently trail at a 28% discount to NAV, which Metage and Staude say means shareholders do not receive the full return of the company’s stable credit portfolio.

VSL shares jumped 6% yesterday in response to an open letter published by Metage and Staude, who have been shareholders in the company since 2016 and 2017 respectively.

Before this, the stock had fallen 11% this year but provided a total shareholder return of nearly 60% over five years, less than the 70% return generated by the underlying portfolio of loans and shares in peer-to-peer lending platforms.

The activist investors, who hold around 3% of VSL, according to Refinitiv data, say they have had discussions with other shareholders, which include Schroders, Premier Miton, AXA and Newton.

These revealed investors’ concern that VSL’s 2p quarterly dividends were not covered by earnings and that further share buybacks by the board to reduce the discount would lead to ‘creeping control’ by the fund manager, Victory Park Capital. The Chicago-based credit specialist owns 20%, according to Refinitiv.

Giving shareholders a five-year exit would make the fund manager’s dominance on the register less of a concern, say the rebels, who have proposed the fund be split into realisation and continuation pools to divide investors who want out from those who want to remain invested.

They believe the board, chaired by Graeme Proudfoot, will outline its thoughts on the planned tender offer having engaged with their proposal and consulted with other shareholders. Given the different ideas being discussed, they called for an informal meeting of investors to thrash out the best way forward.

‘This will avoid unnecessarily incurring the cost of drafting formal documentation without having widespread support amongst shareholders,’ they said.


Posted at 21/5/2022 18:40 by astralvision
Does redhill's post 1074 contain the detail you were looking for waterloo01?Redhill post 1074As we are now into 2022 it may be worth reminding ourselves of the conditions around the continuation vote in June 2020. As a means of encouraging shareholders to vote in favour of continuation, VSL made three key commitments: (i) One year NAV (Cum Income) Return The Board will now propose an ordinary resolution to approve the continuation of the Company as an investment company at the Company's AGM in 2021 if the Company's NAV (Cum Income) Return (calculated as set out in the Company's annual report and accounts) for the period from 1 April 2020 to 31 March 2021 is less than 4%, as compared to less than zero in the initial proposal. If the resolution is not passed the Directors will, within 3 months of the date of the resolution, put forward proposals to shareholders to the effect that the Company be wound up, liquidated or unitised; (ii) Three year NAV (Cum Income) Return The Board will now offer shareholders an exit opportunity for up to 100% of the shares in issue immediately following the Company's AGM in 2023 if the Company's NAV (Cum Income) Return (calculated as set out in the Company's annual report and accounts) for the period from 1 April 2020 to 31 March 2023 is less than 24%, as compared to 18% in the initial proposal; and (iii) Discount to NAV If the average discount to NAV at which the shares trade over the 3 month period ending on 31 March 2023 is greater than 5%, as compared to a 4-week period and a 15% discount in the initial proposal, the Board will now offer shareholders an exit opportunity for up to 25% of the shares in issue immediately following the Company's AGM in 2023. For the avoidance of doubt, this exit opportunity will not be offered in the event the 100% exit opportunity in condition (ii) has been triggered. Point (i) is history as the 4% NAV increase was achieved, and point (ii) of a three year NAV increase of 24% is still in play but looks likely to be achieved. However it is point (iii) that is of particular interest as, despite strong share price growth since the commitment, reducing the average discount to no more than 5% in the three month period to 31 March 2023 looks to me like quite a stretch. I’ve been very content to hold VSL as long as the 8p dividend (current yield c.8.6%) looks sustainable but additionally we appear to be in a position of either the share price has to increase significantly over the next 11 to 14 months to reduce the discount or we get the prospect of a capital return of 25% of shares at full NAV as compensation. I also see this point (iii) as to some extent underpinning the dividend in the immediate term as any reduction would certainly impact the sp, which would make reducing the discount to 5% in that timescale unachievable. Does anyone see it differently?
Posted at 03/2/2022 10:27 by davebowler
VPC Specialty Lending Investments

Resilient income and accretive SPAC investments lead to 28% FY 2021 NAV return

Mkt Cap £264m | Share price 94.8p | Prem/(disc) -16.9% | Div yield 8.4%


VPC Specialty Lending Investments' NAV per share at 31 December 2021 was 114.1p, representing a -4.0% NAV total return in the month. December's performance was driven by a gross capital return of -5.4%. Gross revenue returns remained strong at 1.1%. The overall NAV return in 2021 was 27.6%.

The primary cause of the NAV reduction in the month was a significant decline in the share price of Bakkt Holdings (-5.6% NAV impact), a digital asset marketplace. We note the share price has continued to fall post year end (-51% in 2022). There was considerable activity across the other equity investments:

VPC Impact Acquisition Holdings III (VPCC) has completed its business combination with Dave Inc, a banking app that launched in 2017. VSL holds common shares and warrants in VPCC. 60% of the common shares are valued at the year-end price of $10.25 less a 20% discount. The share price has risen by 36% in 2022 to date.
Beforepay, one of VSL's private investments, closed its IPO in Australia in January. VSL's holding is subject to two lock-up periods. An illiquidity discount will be applied to the valuation.
VSL realised gains on a number of equity investments in December, including Sunbit ($1.8m gain) and Kueski ($4.4m gain).
Liberum view

2021 was VSL's strongest year for NAV performance. The increase from SPAC and other equity investments has been a key contributor to this, with a gross uplift of 23% (pre-fees). Crucially, the company's balance sheet investments have generated consistent monthly returns of c.1%. We believe the fund remains very attractively valued, despite the volatility in the equity investments. We do, however, believe the company needs to more clearly articulate its long-term strategy for the equity investments in terms of allocation and potential distributions.

Posted at 16/11/2021 09:58 by redhill9
Interesting that when the BKKT share price soared to around $42 about a month ago the VSL share price increased by almost 10%, but while over recent weeks the BKKT share price has halved to just over $20 the VSL share price is unmoved.

Perhaps BKKT provided a jolt to market of VSL's potential?

Posted at 26/10/2021 09:41 by davebowler
Material NAV uplift from Bakkt’s 234% share price increase

Mkt Cap £252m | Share price 96.8p | Prem/(disc) -24.8% | Div yield 8.8%


Bakkt's share price rose by 234% yesterday following its partnership agreement with Mastercard. Under the agreement, businesses and banks will be able to buy and hold cryptocurrency and issue branded crypto debit and credit cards. Bakkt is a digital asset marketplace launched in 2018 by Intercontinental Exchange. It will provide custodial services under the agreement with Mastercard. Bakkt launched three years ago enabling institutions and consumers to buy, sell, store and spend digital assets. VSL invested $2.7m in a SPAC that acquired the business and the book value of VSL's investment was $21.5m at 30 June 2021 (5% of NAV).

Liberum view

We estimate a NAV increase of c.17% for VSL based on the latest share price for Bakkt and assuming a c.20% discount to account for the lock-up period. Under the valuation policy, the equity investments in SPACs are held at a discount after the deal announcement and through post-close lock-up periods. The transaction closed earlier this month and the lock-up period for VSL's shares is one year. The shares have risen by 7% this morning and we expect the discount to narrow from the current 25% pro-forma discount.

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