Honeycomb fund returns see August boost as debt to equity rises

By Daniel Lanyon on Sunday 23 September 2018

Editor's PickAlternative Lending

The alternative credit focused investment trust recently accelerated originations and has ramped up its SME lending.

The £545m Honeycomb investment trust saw net asset value returns [NAV] of 0.67 per cent in August, according to a stock market update, following an increase in its debt to equity ratio which has risen to 34 per cent from 30.7 per cent.

In June its debt to equity was 25.2 per cent. Pollen Street Capital, the investment manager of the trust recently said that it would be increasing exposure to SME loans as part of a plan to boost origination volumes.

Its latest numbers bring the NAV total return for the Honeycomb fund to 5.1 per cent in 2018 (5.8 per cent before the impact of IFRS 9).

Gross investments assets rose by £17m due to ongoing originations across consumer, property and SME.

Analysts at the investment bank Liberum say returns from the portfolio are performing well.

“The company continues to perform well with consistent NAV performance of c.65bps per month. NAV total return in the period since launch has comfortably outstripped the peer group.”

Its shares trade on a 11.5 per cent premium to NAV on an ex-dividend basis  or a 7.1 per cent dividend yield.

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