Exclusive: Harsh Patel exits Victory Park Capital

By Daniel Lanyon on Thursday 18 August 2016

Alternative Lending

VPC’s man in London is moving on from the firm and the VPC Specialty Lending trust.

Victory Park Capital’s Harsh Patel has left the asset management firm with immediate effect.

Patel was the sole UK/Europe representative for Victory Park’s closed ended fund, the VPC Specialty Lending trust, which is listed on the London Stock Exchange.

A spokesman for Victory Park Capital said: “Harsh has left the company to pursue other opportunities. VPC thanks him for his time at the company and wishes him well with his future endeavours.”

"The Company is looking for a replacement and will provide an update in due course. In the meantime, the team in Chicago committed to delivering the strategy," he added.

Patel, who was Principal at Victory Park, previously ran a multi-billion dollar portfolio of alternative debt at Abu Dhabi Investment Council as well as previously working for Citi Group as a credit analyst.

He told AltFi that he was still under a non-compete agreement with his former employer and declined to say where he was going next although he expects to go public with the move in the autumn.

Ewan Lovett-Turner, an analyst at Numis Securities, says the move should not be a major concern for investors in the fund as most of the investment management comes out of its US base.

“I’m not overly concerned. The main point of interest for the fund is its move to more balance sheet lending exposure," he said.  

The £382m VPC Specialty Lending investment trust, whose investment managers are based in Chicago, USA, has most of its exposure to the US although about a quarter is in the UK/Europe.  

Currently, the fund’s exposure across platforms is: 22.8 per cent in Avant; 11.6 per cent in Funding Circle UK; 10.6 per cent in Borro; 10 per cent in Prosper; and 9.8 per cent in Funding Circle US loans. The overall portfolio has a weighted average coupon of 16.25 per cent (18.64 per cent marketplace and 12.96 per cent balance sheet) and life of 20 months. It provides exposure to 567,466 loans with an average size of $3,943.

However, VPC recently announced that it would be moving more of its capital into balance sheet lenders.

The trust was launched back in March 2015 and like many of its peers such as P2P Global Investments, it initially moved to a hefty premium. However, due to a ramp up in bearishness in markets in general in 2016 and more specific concerns around p2p and maketplace lending, it now sits on a near 20 per cent discount.

According to AltFi Data, VPC Speciality Lending had outperformed the broader UK marketplace lending space, as measured by the Liberum AltFi Returns index (the LARI) since its launch back in March 2015 until recently.

Performance of VPC Speciality Lending NAV since launch vs LARI

Source: AltFi Data

The trust is on a discount of 18.1 per cent to net asset value, which converts to 12-month backward looking yield of 9.8 per cent.

Sign up for our newsletters

Your daily 7am download of all things alternative finance and fintech.

Fintech and alternative finance headlines with an exclusive Editor's Note each week. Delivered Monday at midday.

AltFi's new weekly US newsletter breaking down the ins and outs of America's burgeoning fintech sector. Delivered Monday 9am EST/ 6am PST.