Pollen Street backtracks on investment trust dividend increase
The Pollen Street Secured Lending investment trust has backtracked on recommendations to increase its quarterly dividend.
A December 2019 factsheet released yesterday (22 January) included a recommendation from the investment manager, Pollen Street Capital, to raise the quarterly dividend from 12p to 15p for the final three months of the year.
However, the board later released a statement clarifying that no decision had been made.
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The alternative finance-focused investment trust had been aiming to provide a 15p dividend from mid-2018 but the performance of its legacy peer-to-peer lending portfolio has dragged on returns.
“No decision as to the level of dividends, including for the final quarter of 2019, has yet been made by the board,” a stockmarket update from the investment trust said.
“Until such decision has been taken, there can be no guarantee that there will be any change to the company’s current dividend policy and the company will make a further announcement in due course.”
The December factsheet showed the investment trust’s net asset value (NAV) return for December 2019 was 0.52 per cent, taking its performance for the year to 5.25 per cent.
This takes account of Pollen Street having to reduce the value of its legacy position in Zopa following the P2P lender’s bank fundraising at the end of 2019.
An analyst note from Numis warned further changes can’t be ruled out.
“The manager been repositioning the portfolio in recent years, with the aim of increase the dividend to 15p per quarter since it took over management of the fund,” the note said.
“It has taken longer than expected, given the drag of the legacy portfolio and establishing the targeted portfolio mix and leverage ratio.
“Exposure to the legacy portfolio is now relatively modest at three per cent of NAV, but further volatility in these holdings cannot be ruled out.”
Read more: Consumer P2P loans weigh on P2PGI fund returns
Meanwhile, Honeycomb – another investment trust managed by Pollen Street – revealed it ended 2019 with a monthly NAV return of 0.67 per cent, taking its annual performance to 7.79 per cent.
