Real Estate Credit Investments Ltd (LON:RECI) benefits from deep expertise, not only in selecting assets but in having the capability to protect assets where positions need attention. As part of the larger Cheyne debt investor specialist – with over $11bn assets under management – RECI has top-tier expertise. The CM Day presentation, on 27 June, highlighted the scope for a modest progressive rise in loan returns, an already-anticipated move out of development loans into loans for yielding assets where their owners seek finance to improve them. RECI’s portfolio is largely senior debt and it has almost entirely exited its market-traded bonds. Dividend payout seems secure.
- An under-supplied market: Supply of funds for senior debt continues to run well behind demand, which is driven by the plethora of ongoing projects, market conditions with rising cost of money, banks’ preferences, and regulatory issues concerning capital adequacy requirements. This is reflected in attractive returns.
- May Factsheet: NAV rose in the month, although it is still 1.3% below the level 12 months ago. The prior fall principally reflected the now small exposure to market bonds – as opposed to loans – and a small December 2023 writedown of a Parisian prime office development, completed in 2023 and slow in letting.
