In previous notes, we have reviewed why we believe Real Estate Credit Investments Limited (LON:RECI) has procedures and practices that limit downside losses to help ensure the resilience of the NAV. In this note, we explore further how portfolio management helps optimise risk/reward with a dynamic approach to bond portfolio allocation, leverage, top 10 concentrations, geographical sectors, and duration. RECI’s portfolio is not a static, long-duration, totally illiquid book. It is actively managed to the latest market opportunities, with an average loan life of 1.5 years, which is likely to be shortened further by early repayments. RECI’s NAV performance was recognised in the recent Citywire award.
Citywire award: The fund won the best performance award for Specialist Debt at Citywire’s London-listed Investment Companies awards (November 2023). The award is given to the investment companies judged to have delivered the best underlying return, in terms of growth in NAV, in the three years to 31 August 2023.