Hardman & Co Research: Experience shows resilience of the model

The key messages we take from RECI's July quarterly investor update and end-July 2021 factsheet are i) attractive returns from low LTV (average 65%) credit exposure to UK and European large, well-capitalised and experienced institutional borrowers, ii) stable dividends, at 3p per quarter (latest yield: 7.9%), iii) a highly granular book - 61 positions, with the top position 14% of NAV (by commitment), iv) modest leverage - gross 29%, net 16.0% (with £44.4m cash on the balance sheet), and v) access to a strong pipeline of enhanced return investment opportunities identified by Cheyne. The premium to NAV (2%) is in line with pre-pandemic average levels.

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