Ranger Direct Lending (RDL), a subsidiary of Texas-based Ranger Capital Group, is aiming for an annual dividend of 10 percent this year.
RDL chairman Christopher Waldron said the firm will “seek to achieve an increase in its quarterly dividends through 2016” and that hitting the target will be “contingent on securing appropriate leverage”.
So far, the fund has deployed $182.36 million (as of 31 December) of capital and is aiming to increase that to $205 million in 2016. The total dividend per share was £8.36 ($11.90; €10.50), according to its annual financial report.
In the report released 11 April, the fund announced a 9.36 percent return as of 31 December. The firm targets a return of between 12 and 13 percent on its investments.
Last year, RDL was listed on the London Stock Exchange and raised £135 million, sourcing loans from a range of direct lenders focused on the secured debt market.
The fund invests in small-to-medium enterprises (SME), invoice financing, real estate and equipment finance debt instruments. Over 80 percent of its direct lending fund portfolio are senior secured loans. As of 31 December, the entire fund was either deployed or is committed to be deployed.
In December, the fund held a secondary issue of more than 1.3 million new ordinary shares at a premium to net asset value.
The majority of the fund’s investments are in the US, but the report said that three recent deals were based outside the US. 92 percent of its investments were directed in the US, while the rest were directed in the UK, Australia and Canada as of 29 February, according to a statement published by the firm earlier this month.
Ranger said that the results were positive and in line with the target annual return. Waldron said that “the direct lending sector still offers compelling value and yield”.
“The continuing reluctance of mainstream lenders to offer attractive finance to SMEs means that there will be further opportunities in 2016 and Ranger hopes to be able to raise new capital to take advantage of them,” Waldron added.