GLI Finance’s chief executive today blamed his predecessor’s spending “splurge” for the investment fund’s £6.9m first-half loss and vowed to push ahead with the investment firm’s overhaul.
The company, which invests in a range of alternative finance providers including peer-to-peer bond platform UK Bond Network, has written down £13m of underperforming investments and launched a strategic review into the business. Its £6.9m loss compares with profits of £5.3m in the first half of 2015.
Chief executive Andrew Whelan blamed the swing into the red on the overspending of his predecessor Geoff Miller, who left in December 2015.
“[The company] went on a bit of a splurge and bought way too many platforms under the previous CEO,” said Whelan. “He’d made too many investments and left the business too short of cash flow.
“Since then the market has taken a bit of a stern view of the business in respect to the share price. We’ve announced a strategic review. We’ve looked at strategizing the business and ensuring that we are in a position to now expand going forward within the sectors and identify which are the winners in those platforms.”
The write-downs include a £3.8m loss on Funding Knight, the UK-based peer-to-peer platform which went into administration earlier this year. In total, approximately £13m was written off due to liquidized platforms or under-performing assets. The company’s CFO Emma Stubbs told Peer-to-Peer Finance News that “there are certain platforms which have value but we’ve written them down conservatively to zero.”
Whelan added: “In any venture capital firm you’re going to have failures. What we’re left with is the cream of the crop.”
Panmure Gordon is a casualty of the company’s overhaul. GLI Finance announced today that it had appointed Liberum Capital as its new nominated adviser and broker.
GLI Finance has undergone a major strategic review since Whelan was appointed in January. The firm has now been organised into three distinct pillars.
‘Pillar One’ focuses on Sancus BMS Group, a specialty lending business which works with high-net-worth-individuals. Sancus BMS had a net profit of £1.4m in the first half of the year.
‘Pillar Two’ refers to the firm’s platform investments, and includes its exposure to SME lending platforms such as The Credit Junction and Funding Options.
‘Pillar Three’ is the firm’s developing business Amberton Asset Management. It made a net loss of £150,000 in the first half of the year due to operating costs.
GLI has also announced the resignation of James Carthew and Frederick Forni from its non-executive board. Whelan told Peer-to-Peer Finance News that Carthew has “other business concerns”, and Forni “has been on the board for more than 10 years so he can no longer be classified as independent.”
He added that there were no immediate plans to replace the two members, but he would like to appoint a trader with some industry experience. Shareholder Somerston is entitled to name one of the board members.