London Stock Exchange welcomes TOC Property Backed Lending Trust PLC
London Stock Exchange welcomes TOC Property Backed Lending Trust (“TOC PBLT”), the inaugural listing of an investment trust by the growing UK direct lending specialist Tier One Capital Ltd.
TOC PBLT is a closed ended investment trust. Its investment objective is to provide shareholders with a consistent and stable income and the potential for an attractive total return over the medium to long term while managing downside risk through: (i) a diversified portfolio of fixed rate loans predominantly secured over land and/or property in the UK; and (ii) in many cases, receiving the benefit of an associated profit share usually obtained by acquiring (at nil cost) a minority equity stake in the relevant borrower project development vehicle.
The trust will have a focus on regional residential housebuilding across the UK, with a preliminary focus on non-London based property, small to medium commercial property development across the UK primarily focusing on small serviced office space, hotel developments and wedding and conferencing venues and direct sale and leaseback vehicles primarily operating in the professional sectors of dentists, accountants, solicitors and finance professionals. A portfolio of 10 loans (a weighted average annualised yield of 8.33 per cent. and an average life of approximately 1.56 years ) sourced through Tier One Capital is being used to cornerstone the £17.3m launch with a further £150m being targeted by Tier One within twelve months.
TOC PBLT will target an annualised net dividend yield of 7%, paid via a quarterly dividend and an overall targeted annual return over the longer term of between 8% to 9% per annum.
It is the first direct lending specialist from the North East of England to be listed on London Stock Exchange.
Mr Stephen Black, Director of Tier One Capital, announcing the launch, said;
“With previous averaged annual returns from our loan book of 8.51% per annum for the past three years, with no defaults and retaining a 100% delivery record to date, we are delighted to be able to offer our proposition to external investors for the first time via TOC PBLT.
This listing affords private clients, intermediaries and institutional investors alike access to the direct lending space in a way able to be held within ISAs, offshore bonds and pension products such as SIPPs and SSASs.
Our strategy is clear: we support good quality management teams, we back good quality strategies and we take good quality security along the way. Delivering successful projects with professional borrowers who know what they’re doing, so we in turn know what we’re getting, is the core activity and TOC PBLT’s 25.1% equity participation in roughly 80% of the teams and projects being supported should position us well to drive the returns being sought without chasing excessive risk.”
Tier One Capital is appointed investment adviser for TOC PBLT’s investment management and finnCap Ltd is sponsor and financial adviser. Tier One operates a vertically integrated model of cash management, wealth management, corporate finance and private equity.