RANGER Direct Lending saw its net asset value (NAV) return fall for the fifth consecutive month in June.
The US-focused alternative investment trust reported 0.54 per cent growth in its NAV in June 2017, down from 0.58 per cent the previous month. At the start of the year, it produced a NAV return of 0.87 per cent.
“Returns were comparable to the last few months due to a similar combination of expenses,” it said in its monthly update, released on Friday.
“As the company continues to be selective in its investment deployment, the company has seen an increase in cash holdings, which has caused a 3 – 4 bps increase in cash drag over 2016 levels.
“The company will continue to be active in its review and selection of investment opportunities and currently anticipates investable deployment levels normalizing over the next few months.”
The London-listed fund announced a dividend of 29.93p for the three months to June, down from 28.51p declared in February. This will be paid out to investors in September.
The fund, which is targeting 12 to 13 per cent annual returns, has 79 per cent of its portfolio in secured loans. 87.15 per cent of its investments are in the US.
Ranger also provided an update on its arbitration proceedings against one of its holdings Princeton, as it endeavours to get more information on its exposure to a bankrupt lender, Argon Credit.
“The Princeton arbitration proceedings are progressing and the company currently expects the arbitrator to set a hearing date and confirm the scope of the proceedings in the very near future,” it said.
“The company will continue to update shareholders on its progress in realising the investment in Princeton through corporate update announcements and the monthly fact sheets produced at the time of publication of each net asset value.”
The fund said it anticipates legal costs from the Princeton case to run between 3 – 9 bps per month.
In April 2017, Ranger Direct said it had taken an impairment of $8.87m (£6.9m) on its original exposure to Princeton due to a decline in cashflow from the Argon portfolio. This represented four per cent of assets.
But since then the fund has been unhappy with the information provided from Princeton and how it calculated a write down of $11.7m on the Argon portfolio.
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