LONDON (Alliance News) - Adamas Finance Asia Ltd Tuesday said an investment fund in which it invested USD500,000 earlier this month has achieved a gross internal rate of return of 31.83% from a newly-exited project, Project Changlelu.
BRJ China Credit Fund Ltd was launched in August 2013 by Hong Kong-based Adamas Asset Management Ltd, which since February 2014 has been has been acting as Adamas Finance Asia's investment manager.
Project Changlelu has now repaid in full both the principal and interest on a RMB15 million loan structured by Adamas, which was an early investment by the BRJ Fund.
The loan, arranged as bridging finance for a successful leisure business in China, was deployed on January 23 and fully repaid on April 23.
Because of the structure of the fund, the exit has increased its net asset value, and the cash generated becomes available for future investment, Adamas Finance Asia said.
The BRJ investment in Project Changlelu was in line the strategic approach followed by the Adamas investment team, which places strong emphasis on rigorous due diligence, tight management involvement and an insistence on robust collateral.
The collateral backing Project Changlelu was a historic building located at Changlelu, Shanghai, with an overall loan-to-value ratio of approximately 57%. The collateral was further underpinned by corporate guarantors involved with the borrower.
"We are delighted by this news, not least because it follows our announcement at the start of this month that the company received a distribution of USD75,300 from a separate, September 2013 investment of USD1.0 million into another fund managed by Adamas - the Greater China Credit Fund," Chairman John Croft said in a statement.
"The BRJ exit from the Project Changlelu provides a further clear example of how we are already benefitting from the investment advice provided by the Adamas team in Asia," Croft added.
BRJ was launched in August 2013 to provide capital for operationally-sound Chinese small-and-medium-enterprises in need of short-term bridging finance not easily available within China, where more than 90% of such companies have difficulty in obtaining bank funding.
The fund plans to invest USD50.0 million, seeking target returns of 24%-30% per annum with the objective of an annual dividend of 8%, payable semi-annually. It aims predominantly to use property as collateral on short-term structured loans.
Adamas Finance Asia shares were Tuesday quoted at USD0.07, down 13%.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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