NAV Performance

The Company's NAV % Total Return for the month of December was -0.44%, which brings the NAV % Total Return for the quarter to -0.70%. The NAV % Total Return over the last twelve months was 3.54% and inception to date (ITD) 46.57%.

The NAV as at 31^st December 2024 was 85.50 pence per Ordinary Share. This negative NAV return of -0.376 pence per share in December arose primarily from mark to market valuation adjustments, namely, (1) an increase in the discount rate for investment loan Ref #39, and (2) a reduction in the valuation of investment loan Ref #76.1, the Company's quasi-equity holding in the gym franchise business led by challenging trading conditions.

Said valuation adjustments were offset by a strong net interest income of +0.947 pence per share. This higher-than-expected net interest income was predominantly derived from a partial year-end accounting reversal of the liquidation cost accruals (which had been fully accounted for in the year-end NAV of FY23) of circa 0.65 pence per share. Disregarding this, the net interest income was circa 0.30 pence per share - roughly in line with previous months. 

Portfolio Activity

As at 31^st December 2024, the Company's invested portfolio had an aggregate nominal outstanding of circa £79 million across 18 investments. The average yield was 12.50%, with a weighted average loan life remaining of circa 0.73 years. Overall, the portfolio is 94% invested in private market assets and 6% in public bonds.

Q4-2024 was an active and successful quarter for the Company in terms of portfolio realisation with a total of 2 repayments totalling circa £6m, which resulted in full exits of said investment loans - both of which had been on the Company's watch list for quite some time and it is therefore pleasing to report to Shareholders a successful exit. Equally as important, both repayments were achieved in line with the Company's assumptions and slightly ahead of the latest valuation.

·      Investment Loan Ref #80 - c.£4.00m

·      Investment Loan Ref #92 - c.£1.96m

In line with the realisation mandate, there was limited activity in terms of drawdowns, with only one drawdown under existing committed facilities:

·      Investment Loan Ref #96 - c.£225k

During the reporting period, a number of extensions were granted, as outlined below:

·      Investment Loans Ref #66 & Ref #67 - a short-term 2-month extension was provided to enable the Borrower to complete on its refinancing transaction, which is currently underway. There can be no assurances that said refinancing process will successfully complete.

·      Investment Loan Ref #39 - a 3-year extension was provided to the Borrower to have our junior secured facility co-terminus with the senior facility. However, it is worth noting that the Sponsor has a legal requirement to initiate an exit process of said investment during 2025 and so our base case scenario at present is therefore a full repayment in early 2026, circa 1.5 years ahead of the extended legal maturity.

·      Investment Loan Ref #73 - a 6-month extension was provided to the Borrower to enable a refinancing of the current lending group.

At period end, the Company had no outstanding debt with cash balances standing at circa £8.5m of which circa £1.5m will be retained by the Company largely to fund undrawn committed facilities and for working capital purposes.

Finally, further updates regarding the Company's Managed Wind-Down process and subsequent return(s) of capital to Shareholders will be announced by the Board as and when appropriate.