RM Secured Direct Lending PLC (LON:RMII) has made good progress boosting its exposure to social and environmental infrastructure assets, says Liberum.
Specialist corporate lender RM announced today it was rebranding as RM Social & Infrastructure to reflect its new focus.
“The switch in investment focus may broaden the potential investor base and provide more opportunities for the company to scale and enhance share liquidity over time," said the broker.
“The further liquidity opportunity demonstrates a commitment to mitigating the risk of a widening in the discount."
RMDL has delivered resilient income performance since its IPO in 2016, Liberum added, noting that distributions have been consistently ahead of target.
“Senior loan investments and loans with a CBILS guarantee will make up approximately 60% of the loan book by the end of Q2.
“We also note the potential for NAV growth from mark-to-market movements on the portfolio.
“The portfolio is marked on a fair value basis using a combination of third-party pricing and a valuation agent.
“The cumulative mark-to-market revaluation loss across the portfolio is equivalent to 6.9p per share and the manager is seeking to recover at least 5.5p of that.”
Going forward, RM said its investment portfolio targets are 75% social infrastructures such as student and retirement accommodation, nurseries, schools and elderly care and hospitals.
Environmental targets will account for the remaining 25%, comprising energy efficiency and carbon reduction, clean energy and renewables and waste management.
The portfolio exposure to CBILS loans [Covid-19 support] has risen to 22% of NAV with £8mln of further drawings expected this month, Liberum added:
Shares were unchanged at 91p.