Honeycomb Investment Trust quickly reinvests proceeds of bond sale as pipeline remains strong

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Honeycomb Investment Trust plc (LSE:HONY) reported a 9.1% net asset value (NAV) return on an annualised basis in June and highlighted the ongoing opportunity for investment in the SME lending market.


After selling the trust’s listed bond portfolio during the month, investment manager Pollen Capital said the majority of the proceeds have now been reinvested.


This is thanks to a continued strong pipeline of deals, with a large proportion of the sale proceeds invested in a new SME facility that completed in July.


The investment trust’s NAV excluding income ended June at 1,017.9p per share, marking a 0.75% monthly return in June, and 4.33% for the year to date.


Pollen Capital, in its commentary alongside the monthly update, said: “We believe there is certainly scope for continued growth in this space and are excited to see the opportunities in the non-bank SME lending sector continue to evolve in a way that can generate positive impact for investors, people, partners and wider society.


“Alongside our aim to provide consistent, compelling returns for investors is our commitment to positive impact. Through our investment and lending philosophy we aim to have a long term sustainable positive impact for small and medium sized business owners and the UK economy as a whole.”


The manager noted that with 2020 being a challenging year all round, UK SME’s still demonstrated their “resilience and ability to adapt as well as their importance to the UK economy”, pointing to research from Oxford Economics showing that SME appetite for growth finance last year was at the highest level since 2016, with online searches for business loans increasing over five times.


Pollen pointed out that the pandemic brought existing disruption from technology and regulations into sharper focus, with non-bank lenders – the sector in which Honeycomb invests – having already been at the forefront of many of these initiatives, “were able to move swiftly and effectively to help provide SME’s with access to finance through these times”.


“Through a dedicated and specialist team, Pollen Street has developed the network and infrastructure to partner with the strongest players in selected markets within SME finance to support this sector.”

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