Investment trust insider on BioPharma Credit – James Carthew: The overly discounted debt trust I’m considering buying
Direct lending trusts are languishing after making some risky loans, but BioPharma Credit is a wholly more robust portfolio.
Few parts of the investment companies sector are thriving, but one that is doing well is debt, as I highlighted a few weeks ago when discussing CVC Income & Growth (CVCG).
Companies in the debt – loans and bond sector are trading at premiums and issuing stock, the attraction being their 7-9% dividend yields on offer.
However, debt – direct lending funds are not so in vogue, with four out of five of these in wind down mode. Part of the reason for this is that some direct lending funds made some risky loans when they needed to generate attractive returns back in the days when interest rates were artificially low.
I suspect that if they could draw a line through those past investments and create new portfolios today, some of them would actually be thriving.
However, my focus today is not on those four but on the direct lending sector’s star, BioPharma Credit (BPCR). It is languishing on an undeserved discount of 9.5% and is another company I am considering for my portfolio.
BPCR launched in 2017 and raised a decent amount of money. Even after some substantial share buybacks, it still boasts a market cap of over $1bn (£763m).
As the name suggests, BPCR lends money to…. read more here