Honeycomb raises full £105m in new heavily oversubscribed cash raise

The closed-ended fund launched its latest cash raise just last week but has already seen high demand.

The £222m Honeycomb investment trust has raised its full fundraising allocation, placing 10 million new ordinary shares in the firm worth £105m.

 The Placing Shares are to be issued at a price of £10.50 per Placing Share. The Placing was oversubscribed and demand has to be scaled back as a result.

Pollen Street Capital, the investment manager, says it expects that the shares will see admission effective from 8.00 a.m. on 2 June 2017.

On Admission, the Company's issued share capital will comprise 29,926,110 ordinary shares, with the corresponding same number of voting rights. No shares are held in Treasury.

The trust is one of the newest and most low profile closed ended funds offering exposure to direct lending that is also listed on the London Stock Exchange. Nonetheless, its managers clearly are ambitious. Aside from the healthy new cash raise, Pollen Street Capital recently merged with MW Eaglewood although the new firm will retain the Pollen Street moniker. 

The fund has portfolio of both UK consumer as well as specialist debt originated by platforms such as Freedom Finance, which is the UK largest personal loan broker as well as Green Deal Finance Company as well as Pay4Later, a point of sale consumer credit platform as well as challenger bank Shawbrook. Honeycomb is also running a book it purchased of loans from GE Money Consumer Lending.

It launched back in December 2015 after raising £100m and has grown through secondary issuance through further fund raises.

It has a dividend target of 8 per cent per annum on its issuance price, but this was increased to 10 per cent or greater on the issue price from Q3 2016 after the portfolio was substantially deployed.

The last quarterly dividend of 24.5p represents an annualised yield of 8.8 per cent on the current share price. The shares are trading on a 12.1 per cent premium.