Ranger Direct Lending (RDL), one of a handful of loan funds backed by Invesco Perpetual's Mark Barnett, has suffered another blow from its problematic investment in the Princeton Alternative Income fund.
The investor in mostly secured loans to American small and medium-sized businesses has had to write down a further $9.1 million of its investment in the fund which was the biggest backer to Argon Credit, a US peer-to-peer lending platform that collapsed in March.
Princeton, a British Virgin Islands-incorporated fund, provided $28.3 million of a $37.5 million credit facility to Argon.
The move knocks 3.8% off Ranger's net asset value at the end of October and brings total provisions to Argon to $19.5 million following a $10.4 million write-down last month.
Ranger shares have lost a quarter of their value this year and have slipped a further 3%, or 22p, to 690p today to trade around 30% below their last published net asset value at the end of September.
The decline reflects investors' doubts about Ranger, which cut its dividend after Argon's bankruptcy. At the current share price the third quarter dividend of 21.7p offers an annualised yield of over 12%, according to Numis Securities.
Unhappy with the information provided by Princeton, Ranger has launched arbitration proceedings against the fund.
Last month the board said it was looking to appoint a co-manager to work alongside its existing manager Ranger Alternative Management and identify new lending categories.
This is likely to be in reponse to pressure from investors, the largest of whom is Barnett, whose Invesco Perpetual Income and High Income funds own 28% of Ranger's shares. LIM Advisors, an activist investor, owns just over 9%, according to Thomson Reuters data.
Ranger is the worst of Barnett's six investments in alternative lending funds. He holds 31% of P2P Global Investments (P2P), which is embarked on a turnaround after a disappointing two years, as well as leading positions in the more successful Funding Circle SME Income (FCIF), Hadrians Wall Secured Investments (HWSI) and VPC Specialty Lending (VSLV).