Investment manager SQN Asset Management (SQN) is embracing political and market instability by re-launching and refreshing one of its funds.

The SQN Secured Income Fund (SSIF) aims to deliver attractive returns by offering alternative lending to strong businesses.

The fund invests in a range of small and medium-sized firms by buying a mixture of loans, receivables, tax credits, property and other financial assets.

It currently pays an annual dividend of 7p per share split into monthly distributions to provide a regular stream of income for shareholders.

This is rare feature for a fund and also makes it one of the highest dividend payers in the market.

Unfortunately, its net asset value (NAV) has been falling and is currently at its lowest since inception in 2014 at 97.13p.


Under its growth plan SSIF aims to raise between £50m and £100m, potentially doubling the size of the fund in an opportunistic move to try and benefit from ‘market dislocation’ among alternative lenders.

SQN management believes that by increasing the size of the fund now it will be able to pick up what it calls 'quality segments of seasoned portfolios' which other non-traditional lenders are selling.

Over the last year and a half the portfolio has been heavily restructured, cutting exposure to platforms which don't meet SSIF's own underwriting standards.

With the equity raise the managers expect to increase the direct investment portion of the portfolio, increase liquidity for shareholders and pursue more attractive risk-adjusted high-yield transactions.

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Issue Date: 11 Dec 2018