P2P lending fund sees best monthly returns since 2015

The P2P Global Investments trust has been increasingly moving away from pure P2P lending exposure into more niche lending assets.

The turn-around of the £728m P2P Global Investments' trust seems to be working. The portfolio saw an uptick in returns in November in Net Asset Value ( NAV) terms to 0.57 per cent for the month, according to a stock market update, the best monthly returns for more than three years.

P2PGI's portfolio re-positioning began last year  as it began to move towards more exposure to alternative credit assets and less towards pure P2P loans. While the past three months have seen returns improve more broadly, November was the best month in NAV terms since July 2015.

The run-off portfolio has now reduced to 20 per cent of the total portfolio but Pollen Street Capital, the fund’s manager, says that returns from the run-off portfolio continue to be volatile albeit at levels representing less and less of the total assets.

Analysts at investment bank Liberum say that P2PGI's underlying income returns have improved steadily in 2018.

“We estimate an underlying income return of 0.51 per cent in the month after adjusting for buybacks (9bps) and ongoing amortisation legacy costs (-3bps per month). The average monthly NAV return in the second half of the year was 0.51 per cent.”

“Returns should continue to improve as the legacy portfolio winds down resulting in an increased dividend. We believe this will help to drive a re-rating form the current -16.3 per cent discount.

Partners of the investment manager, Liberum added, also recently acquired in excess of £1.5m of shares in the company, demonstrating confidence in the outlook for the portfolio performance.