VPC Specialty Lending (VSL) has announced that it has agreed with its Investment Manager, Victory Park Capital Advisors, LLC to introduce of a performance hurdle in respect of the performance fees payable to the Investment Manager. With effect from 1 May 2017, the payment of any performance fees to the Investment Manager will be conditional on the Company achieving at least a 5.0% per annum total return for shareholders relative to a 30 April 2017 High Water Mark.
VSL says that this new arrangement more closely aligns the performance incentive for the Investment Manager with the interests of the Company’s shareholders. The Board and Investment Manager say that they are confident that the 5.0% per annum total return threshold will be exceeded over the medium term, given the ongoing reallocation of capital from marketplace loans to balance sheet loans which they say, to date, have consistently generated higher returns with lower volatility.
VPC Specialty Lending Investments is a UK Investment trust. It is targeting an 8% per annum dividend yield (paid quarterly) and a net total return in excess of 10% by investing in loans originated by the online lending market. It intends to invest in and lend money through multiple platforms, diversified by geography (UK, US and Europe), product (consumer and small business), and structure (whole loans, senior credit facilities and equity warrants). Equity or equity-linked instruments in lending platforms will represent up to 10% of the portfolio, in some cases this equity will be taken in exchange for VPC Speciality Lending Investments providing debt capital to their platforms. They may use leverage (up to 1.5x net asset value, i.e. 50%) to enhance returns.
VPC Specialty Lending introduces performance fee hurdle of 5.0% per annum : VSL