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RM Secured Direct Lending focused on management of existing portfolio during coronavirus crisis

Snapshot

  • Corporate lending specialist 
  • £105.9mln asset value
  • Trust has shifted investment stance towards non-cyclical sectors
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Quick facts: RM Secured Direct Lending

Price: 80 GBX

LSE:RMDL
Market: LSE
Market Cap: £97.01 m
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We remain confident in our investment manager's approach in ensuring the portfolio is well balanced and set to deliver sustainable income and returns for shareholders

Norman Crighton, chairman

What RM Secured Direct Lending does

RM Secured Direct Lending PLC (LON:RMDL) is a UK-based closed-ended investment trust focused on secured debt.  

The company aims to generate attractive and regular dividends through loans sourced or originated by its asset management arm, RM Capital Markets Limited, with a degree of inflation protection through index-linked returns where appropriate.

The loans the company invests in are mainly secured against such assets as real estate, plant and machine or income streams like account receivables.

What it owns

The group owns RM Capital Markets Limited, which provides advisory, capital raising and risk management services, a direct lending platform, and currency and fixed income trading services.

Within RM Capital Markets is credit asset management business, RM Funds, a fixed-income specialist with a focus on secured lending and debt investments.

RM Secured Direct Lending has the VT RM Alternative Income Fund, which invests primarily in listed equities within the alternative income sector, including real estate investment trusts and other trusts in areas such as asset lending, direct lending, peer-to-peer lending, infrastructure debt and equity, property, structured credit investments and renewables.

 

How it is doing

In May, the firm set reduced charges for shareholders as net asset value rises after a change to the investment management fee. 

Edinburgh-based investment manager RM Capital Markets will now be entitled to a fee of 0.875% of the prevailing net asset value in the event that the prevailing NAV is up to or equal to £250mln.

If the NAV is between £250mln and £500mln the fee will be calculated at 0.800% and if and when NAV rises above £500mln the fee falls to 0.750%.

NAV ended December at £119.5mln, up from £95.7mln over last year.

In April, RM said the focus of its portfolio on real assets and businesses not linked to the economic cycle will enable it to weather the current coronavirus storm.

 

What the boss says: James Robson, chief investment officer

“Overall, the Investment Management team believe that despite the recent market volatility the portfolio is well-positioned to continue to deliver the stable returns which investors are seeking and in addition, there will be greater NAV growth as we target a return to the opening NAV.”

 

Video 

Inflexion points 

  • Stability returns to secured lending market
  • Dividend payments maintained
  • UK economy starts to recover as lockdown restrictions ease

 

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