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M&G Credit Income Investment Trust plc: 2021 -8-

DJ M&G Credit Income Investment Trust plc: 2021 Interim Results

M&G Credit Income Investment Trust plc (MGCI) M&G Credit Income Investment Trust plc: 2021 Interim Results 16-Sep-2021 / 15:43 GMT/BST Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group. The issuer is solely responsible for the content of this announcement.

-----------------------------------------------------------------------------------------------------------------------

LEI: 549300E9W63X1E5A3N24

M&G Credit Income Investment Trust plc

Half Year Report and unaudited Condensed Financial

Statements for the six months ended 30 June 2021

Copies of the Half Year Report can be obtained from the following website:

www.mandg.co.uk/creditincomeinvestmenttrust

Company highlights

Company summary

M&G Credit Income Investment Trust plc (the 'Company') was incorporated on 17 July 2018 as a public company limited by shares. Admission to the London Stock Exchange's (LSE) main market for listed securities and dealings in its Ordinary Shares commenced on 14 November 2018. The Company is an investment trust within the meaning of section 1158 of the Corporation Tax Act (CTA) 2010.

Key dates

Period end                 30 June 2021 
2021 First interim dividend:  Payment date May 2021 
2021 Second interim dividend: Payment date August 2021 

Future dividend timetable

Payment date 
2021 Third interim   November 2021 
2021 Fourth interim  February 2022 
2022 First interim   May 2022 
2022 Second interim  August 2022 

Financial highlights

As at                    As at 
Key data                 30 June 2021                 31 December 2020 
                     (unaudited)                 (audited) 
Net assets (GBP'000)                              146,297 146,628 
Net asset value (NAV) per Ordinary Share                  102.04p  101.40p 
Ordinary Share price (Mid-market)                     97.20p   92.00p 
Discount to NAV[a]                               4.74% 9.27% 
Ongoing charges figure[a]        1.08%[b]                   0.87% 
                    Six months ended Year ended 
Return and dividends per Ordinary Share 30 June 2021  31 December 2020 
                    (unaudited)   (audited) 
Capital return             2.0p       1.3p 
Revenue return             1.3p       2.9p 
NAV total return[a]           3.3%       3.7% 
Share price total return[a]       8.7%       (9.7)% 
First interim dividend         0.74p      0.85p 
Second interim dividend         0.76p[c]     0.77p 
Third interim dividend         -        0.71p 
Fourth interim dividend         -        1.95p[c] 
Total dividends declared        1.50p      4.28p 

[a] Alternative Performance Measure.

[b] The increase in the ongoing charges figure mainly shows the annualised effect of the increase in the investment management fee from 0.5% to 0.7% per annum. This increase in fee took effect on 1 April 2021, reflecting the fact that the portfolio is now appropriately positioned with regard to the Company's dividend target set at launch.

[c] Paid after the period/year end. Please see note 6 for further information.

Investment objective and policy

Investment objective

The Company aims to generate a regular and attractive level of income with low asset value volatility.

Investment policy

The Company seeks to achieve its investment objective by investing in a diversified portfolio of public and private debt and debt-like instruments ('Debt Instruments'). Over the longer term, it is expected that the Company will be mainly invested in private Debt Instruments, which are those instruments not quoted on a stock exchange.

The Company operates an unconstrained investment approach and investments may include, but are not limited to:

Asset-backed securities, backed by a pool of loans secured on, amongst other things, residential and 
*       commercial mortgages, credit card receivables, auto loans, student loans, commercial loans and corporate 
       loans; 
*       Commercial mortgages; 
*       Direct lending to small and mid-sized companies, including lease finance and receivables financing; 
*       Distressed debt opportunities to companies going through a balance sheet restructuring; 
*       Infrastructure-related debt assets; 
*       Leveraged loans to private equity owned companies; 
*       Public Debt Instruments issued by a corporate or sovereign entity which may be liquid or illiquid; 
*       Private placement debt securities issued by both public and private organisations; and 
*       Structured credit, including bank regulatory capital trades. 

The Company invests primarily in Sterling denominated Debt Instruments. Where the Company invests in assets not denominated in Sterling, it is generally the case that these assets are hedged back to Sterling.

Investment restrictions

There are no restrictions, either maximum or minimum, on the Company's exposure to sectors, asset classes or geography. The Company, however, achieves diversification and a spread of risk by adhering to the limits and restrictions set out below.

The Company's portfolio comprises a minimum of 50 investments.

The Company may invest up to 30% of Gross Assets in below investment grade Debt Instruments, which are those instruments rated below BBB- by S&P or Fitch or Baa3 by Moody's or, in the case of unrated Debt Instruments, which have an internal M&G rating below BBB-.

The following restrictions will also apply at the individual Debt Instrument level which, for the avoidance of doubt, does not apply to investments to which the Company is exposed through collective investment vehicles:

Secured Debt Instruments Unsecured Debt Instruments 
Rating         (% of Gross Assets) [a]  (% of Gross Assets) 
AAA          5%                                   5%[b] 
AA/A          4%            3% 
BBB          3%            2% 
Below investment grade 2%            1% 

[a] Secured Debt Instruments are secured by a first or secondary fixed and/or floating charge.

[b] This limit excludes investments in G7 Sovereign Instruments.

For the purposes of the above investment restrictions, the credit rating of a Debt Instrument is taken to be the rating assigned by S&P, Fitch or Moody's or, in the case of unrated Debt Instruments, an internal rating by M&G. In the case of split ratings by recognised rating agencies, the second highest rating will be used.

The Company typically invests directly, but it also invests indirectly through collective investment vehicles which are managed by an M&G Entity. The Company may not invest more than 20% of Gross Assets in any one collective investment vehicle and not more than 40% of Gross Assets in collective investment vehicles in aggregate. No more than 10% of Gross Assets may be invested in other investment companies which are listed on the Official List.

Unless otherwise stated, the above investment restrictions are to be applied at the time of investment.

Borrowings

The Company is managed primarily on an ungeared basis although the Company may, from time to time, be geared tactically through the use of borrowings. Borrowings will principally be used for investment purposes, but may also be used to manage the Company's working capital requirements or to fund market purchases of Shares. Gearing represented by borrowing will not exceed 30% of the Company's Net Asset Value, calculated at the time of draw down, but is typically not expected to exceed 20% of the Company's Net Asset Value.

Hedging and derivatives

The Company will not employ derivatives for investment purposes. Derivatives may however be used for efficient portfolio management, including for currency hedging.

Cash management

The Company may hold cash on deposit and may invest in cash equivalent investments, which may include short-term investments in money market type funds ('Cash and Cash Equivalents').

There is no restriction on the amount of Cash and Cash Equivalents that the Company may hold and there may be times when it is appropriate for the Company to have a significant Cash and Cash Equivalents position. For the avoidance of doubt, the restrictions set out above in relation to investing in collective investment vehicles do not apply to money market type funds.

Changes to investment policy

Any material change to the Company's investment policy set out above will require the approval of Shareholders by way of an ordinary resolution at a general meeting and the approval of the Financial Conduct Authority (FCA).

Investment strategy

The Company seeks to achieve its investment objective by investing in a diversified portfolio of public and private debt and debt-like instruments of which at least 70% is investment grade. The Company is mainly invested in private debt instruments. This part of the portfolio generally includes debt instruments which are nominally quoted but are generally illiquid. Most of these will be floating rate instruments, purchased at inception and with the intention to be held to maturity or until prepaid by issuers; shareholders can expect their returns from these instruments to come primarily from the interest paid by the issuers.

(MORE TO FOLLOW) Dow Jones Newswires

September 16, 2021 10:43 ET (14:43 GMT)

DJ M&G Credit Income Investment Trust plc: 2021 -2-

The remainder of the Company's portfolio is invested in cash, cash equivalents and quoted debt instruments, which are more readily available and which can generally be sold at market prices when suitable opportunities arise. These instruments may also be traded to take advantage of market conditions. Fixed rate instruments will often be hedged in order to protect the portfolio from adverse changes in interest rates. Shareholders can expect their returns from this part of the portfolio to come from a combination of interest income and capital movements.

Chairman's statement

Performance

I am delighted that your Company continues to show returns above those originally targeted at its launch. The NAV total return for the half year to 30 June 2021 was 3.3%. Including dividends paid, the annualised NAV total return was 4.8% from inception to 30 June 2021. Your Board considers these to be strong performances, noting the relatively low risk in the underlying investments.

In the first quarter of the year markets were preoccupied by the risk of inflation and economic overheating which led to a global sell-off in government bonds. During this period the Company's short position in the 10 year gilt future successfully offset any pricing weakness related to interest rate risk in our holdings. By hedging interest rate risk and maintaining low duration our Investment Manager was able to negate the effect of rising risk-free rates on portfolio returns, allowing the Company to capture positive credit spread performance.

Although upward pressure on government bond yields cooled during the second quarter, sovereign debt markets remained volatile. As the period progressed, central banks began to discuss timelines for the tightening of monetary policy. Counterintuitively, government bond markets, led by the US, rallied to end the quarter at levels last seen at the end of February. Our Investment Manager was able to benefit from the strength of credit markets over this period to realise capital gains on the sale of bonds that had been purchased at much cheaper levels during 2020. These capital gains, along with low portfolio duration, contributed to the NAV outperforming fixed income indices such as the ICE BofA Sterling and Collateralised Index (down by 2.6%) and the ICE BofA European Currency Non-Financial High Yield 2% Constrained Index (up by 3.0%) over the period.

Share buybacks and discount management

Your Board believes the volatility in the price of the Ordinary Shares has not reflected the stability and low volatility of the underlying NAV. On 30 April 2021, the Company announced a 'zero discount' policy (the 'Policy') to seek to manage the discount or premium to NAV at which the Company's Ordinary Shares trade.

The Policy has been adopted because the Board believes that it is important for Shareholders to be able to benefit appropriately from the Company's investment objective which is to generate a regular and attractive level of income with low asset value volatility. The Company therefore will seek to ensure that the Ordinary Shares trade close to NAV in normal market conditions through a combination of Ordinary Share buybacks and the issue of new Ordinary Shares, or resale of Ordinary Shares held in treasury, where demand exceeds supply. Further issuance would allow the Company to take advantage of opportunities in the private debt markets as they arise, as well as to increase the size of the Company, which should reduce the ongoing charges figure and improve the liquidity of the Ordinary Shares.

Your Company has undertaken a number of share buybacks pursuant to the Policy. In addition, the Company's Investment Manager has held meetings with both existing and potential investors. Pleasingly, these endeavours, coupled with a more positive market backdrop, have led to a narrowing of the discount to NAV at which the Ordinary Shares trade.

The Company's Ordinary Share price traded at an average discount to NAV of 7.5% during the period from 2 January to 30 June 2021. On 30 June 2021 the Ordinary Share price was 97.20p, representing a 4.7% discount to NAV as at that date. As at 30 June 2021, 1,238,000 shares had been purchased as part of the Policy and were held in treasury.

Board

Mark Hutchinson retired from the Board on 31 August 2021. This coincided with Mark leaving his role as Chair of Private Assets at M&G Alternatives Investment Management Limited, your Company's Investment Manager. We thank him for his wise counsel, commitment and for his considerable contribution since the inception of the Company.

Your Board has commenced the search process for an additional non-executive Director and, in due course, will consider replacing Mark.

Dividends and transition from LIBOR to SONIA

Your Company is currently paying three, quarterly interim dividends at an annual rate of LIBOR plus 3%, calculated by reference to the opening NAV as at 1 January 2021, adjusted for the payment of the last dividend in respect of the last financial year (adjusted opening NAV). In addition your Company will pay a variable, fourth interim dividend to be determined after the year end, which will take into account the net income over the whole financial year and, if appropriate, any capital gains. The Company paid dividends of 0.74p and 0.76p per Ordinary Share in respect of the quarters to 31 March 2021 and 30 June 2021 respectively.

The Company currently uses the average daily three-month LIBOR as its reference for the purposes of its targeted dividend rate. LIBOR is in the process of being phased out by 31 December 2021 in favour of a new measure called Sterling Overnight Index Average (SONIA).

Since the global financial crisis over a decade ago, banks have been making less use of the interbank lending market. This has raised the question of the robustness and reliability of some of the rates which arise from that process, particularly at the less frequently used maturity points. Additionally, LIBOR has faced concerns regarding its reputation, since manipulation of quotes for the rates by some market participants was discovered to have taken place around the time of the global financial crisis. Financial regulators need standard measures of market interest rates to be trusted and relevant and for the process used to calculate them to be credible, transparent and robust for the long term. Instead of quotations provided by a panel of banks, which is the process for the calculation of LIBOR, regulators have decided that benchmark rates must hereafter both be administered by central banks and be based on actual transactions in deep and liquid markets. Introducing SONIA to replace LIBOR for sterling interest rates aims to achieve those objectives.

The key difference between the two measures is that LIBOR is forward-looking and SONIA is backward-looking: SONIA cannot be determined until the end of an agreed interest period.

Although SONIA gives a different result from LIBOR, based upon the performance of the two measures over the recent past, we do not expect our adoption of it to make a significant difference.

Your Board has, therefore, decided that it is in the best interests of Shareholders and the Company simply to substitute SONIA for LIBOR with effect from 1 January 2022 for the purpose of guidance on future dividends as well as for benchmarking the Company's investment performance.

The adoption of SONIA will not affect the way in which the portfolio is managed. Your Company's Investment Manager continues to believe that an annual total return, and thus ultimately a dividend yield, of LIBOR (and SONIA from January 2022) plus 4% will continue to be achievable although there can be no guarantee that this will occur in any individual year.

Outlook

Your Company's portfolio (including irrevocable commitments) is now 58.9% invested in private (non- listed) assets, with an additional investment of some 10% in illiquid publicly listed assets which are intended to be held to maturity. Public bond valuations are currently expensive by historical standards and on a risk adjusted basis appear unattractive relative to the target return of the Company. Our Investment Manager will continue to grow the private asset portion of the portfolio to achieve additional returns compared to public markets, further progressing the yield of the portfolio.

The Company maintains access to an undrawn GBP25 million revolving credit facility which should enable us to weather any future market shocks while having the firepower to purchase suitable assets as they arise. We have not yet used this facility but it continues to provide a valuable source of additional liquidity.

Based upon income earned and gains on sales of securities already realised in the portfolio, we believe the Company is in a good position to achieve its return and dividend objectives, as set out above in the section entitled 'Dividends and transition from LIBOR to SONIA', for the current financial year.

David Simpson

Chairman

16 September 2021

Investment manager's report

We are pleased to report strong NAV total return performance of 3.3% in the first half of the year which leaves the Company currently ahead of its dividend target. For the period ended 30 June 2021, the Company had declared dividend payments of 1.50p per Ordinary Share (of which 0.74p per Ordinary Share was paid in May 2021 and 0.76p per Ordinary Share was paid in August 2021). The share price total return from 1 January to 30 June 2021 was 8.7%.

(MORE TO FOLLOW) Dow Jones Newswires

September 16, 2021 10:43 ET (14:43 GMT)

DJ M&G Credit Income Investment Trust plc: 2021 -3-

In the first half of 2021 financial markets focus changed from considering the risks associated with the shock caused by the global spread of the COVID-19 pandemic, to those posed by the huge fiscal and monetary stimulus which central banks provided as a response to that initial shock. Asset purchasing programmes succeeded in keeping borrowing costs low and corporate issuers of varying credit quality continued to have access to cheap levels of investor capital. Investors looking for increased returns were forced along the credit curve into 'riskier' sectors and in many cases, out of investment grade and into high yield credit. Against this backdrop, we continued to adopt a patient and prudent approach to deploying capital, with a focus on ensuring that returns were commensurate to underlying credit risk.

Portfolio activity and positioning

The focus in markets during the early part of the year was the rise of inflation and the reaction of sovereign debt markets. The yield on the 10 year US Treasury almost doubled over the first quarter, whilst that of the 10 year UK gilt widened to approximately four times the level seen at the end of 2020 - at one point spiking to a near two-year high. In the Eurozone, the yield on the German 10 year bund touched its highest level since the onset of the pandemic. Whilst risk-free rates climbed higher, corporate credit spreads continued to tighten. Against this backdrop, the Company began the year cautiously positioned and continued to reduce risk over the period. The Company's short position in the 10 year gilt future successfully offset any depreciation in the value of the portfolio's holdings resulting from the change in interest rates.

By contrast, volatility in credit markets remained subdued with central banks committed to providing monetary stimulus in the short term. Investment grade and high yield credit spreads continued to tighten over the period, reaching multi-year lows and finishing inside pre-COVID levels, testament to the success of central bank asset purchase programmes in suppressing corporate yields. Whilst this limited our ability to invest in large parts of the public market, we were able to sell into this strength and realise notable capital gains in the portfolio, whilst reinvesting proceeds into higher yielding private assets.

Despite elevated volumes of new issuance in both investment grade and high yield credit, portfolio activity in the second quarter of the year slowed. A high appetite for yield in public markets limited the amount of attractively priced deals, with most offering yields well inside the target return of the Company. However, the pipeline of potential private transactions has remained strong since the start of the year and in total over the period we added a further 9.2% of private and illiquid assets to the portfolio.

As at 30 June 2021, the funded private asset portion of the portfolio had increased to 50.9% (versus 44.1% at 31 December 2020) with an additional investment of 6% in Private Assets transacted after the period end, or committed to be drawn down beyond the date of this report. Further commitments of GBP2.9m (c.2%) since the period end are expected to take the Company's overall private asset exposure to approximately 58.9%.

Outlook

As inflation continues to ramp up, fundamental credit analysis of issuers and their cash flow profiles will become more important than ever in assessing relative value. In such an environment, our extensive research capabilities of over 100 analysts covering public and private credit means we are well positioned to continue to seek the right investment opportunities for the portfolio.

There remain many risks on the horizon as we enter the second half of the year. Most notable of these is the spread of a more transmissible strain of the COVID-19 virus, the Delta variant, which is already leading to economic growth forecasts being revised. In some countries there remain heightened geopolitical risks, particularly discord between the US and China, recent cyber security attacks and continued friction between the UK and EU following the former's official exit from the European Union.

We view the main threat to market stability as the tapering of economic stimulus by central banks and how it is signalled to investors. Economies have rebounded more swiftly than anticipated and inflation in the UK and US has spiked notably beyond the long term target of 2%, with the latter far more pronounced due to its outsized fiscal stimulus. However, the recovery has been uneven with employment remaining below pre-pandemic levels and a premature pullback of accommodative monetary policy could damage the longer term economic recovery. The issue is complicated in that the risk is double edged, as continuing to provide fiscal stimulus to an already overheating economy could lead to undesirably high inflation for years to come, which may prove difficult to reverse. Therefore, the predominant theme in markets as we enter the second half of the year is the discussion on whether the current levels of inflation are 'transitory' (resulting from pent-up demand caused by social restrictions but expected to reduce over time) or 'persistent' (a structural shift indicating longer term inflationary trends.) The action of central banks in response to the challenge of the evolving inflationary environment looks set to have the biggest bearing on the path of the economic recovery as we continue through 2021 and into 2022.

If current market conditions persist, we will continue to increase the yield of the portfolio by selling public bonds, realising capital gains and reinvesting proceeds into new private investment opportunities. This rotation into higher yielding private assets with stronger structural protections will further improve the credit quality of the portfolio. There is currently a healthy deal pipeline of private opportunities offering yields in line with our long term target.

M&G Alternatives Investment Management Limited

16 September 2021

Portfolio analysis

Top 20 Holdings

Percentage of portfolio of investments 
                             (including cash on deposit and derivatives) 
As at 30 June 2021 
M&G European Loan Fund                  12.16 
Sonovate Limited Var. Rate 12 Apr 2022          1.80 
Atlas 2020 1 Trust Var. Rate 30 Sep 2050         1.65 
Westbourne 2016 1 WR Senior Var. Rate 30 Sep 2023     1.59 
Delamare Finance FRN 1.279% 19/02/2029          1.59 
Finance for Residential Social Housing 8.569% 4 Oct 2058 1.54 
Hall & Woodhouse Var. Rate 30 Dec 2023          1.53 
Signet Excipients Var. Rate 20 Oct 2025          1.42 
Newday Partnership Funding 2017-1 FRN 0.8053% 15 Dec 2027 1.39 
Regenter Myatt Field North Var. Rate 31 Mar 2036     1.35 
Hammond Var. Rate 28 Oct 2025               1.32 
Project Driver TL Var. Rate                1.32 
RIN II 1.778% 10 Sep 2030                 1.26 
Dragon Finance FRN 1.3665% 13 Jul 2023          1.14 
Finance for Residential Social Housing 8.369% 4 Oct 2058 1.12 
Lewisham Var. Rate 12 Feb 2023              1.10 
NewRiver REIT 3.5% 7 Mar 2028               1.09 
Marston's Issuer FRN 1.7083% 15 Oct 2031         1.07 
Ripon Mortgages FRN 1.2814% 20 Aug 2056          1.05 
Hammerson 6% 23 Feb 2026                 1.04 
Total                           37.53 

Source: State Street.

Geographical exposure

Percentage of portfolio of investments 
As at 30 June 2021 
          (excluding cash on deposit and derivatives) 
United Kingdom   60.06% 
United States   7.40% 
France       3.09% 
European Union   2.80% 
Australia     2.23% 
Other       24.42% 

Source: M&G and State Street as at 30 June 2021

Portfolio overview

As at 30 June 2021    % 
Cash on deposit     3.20 
Public          46.22 
Asset-backed securities 22.12 
Bonds          24.10 
Private         50.86 
Asset-backed securities 6.72 
Bonds          2.45 
Investment funds     12.16 
Loans          19.03 
Private placements    0.99 
Other          9.51 
Derivatives       (0.28) 
Debt derivatives     (0.17) 
Forwards         (0.11) 
Total          100.00 

Source: State Street.

Credit rating breakdown

As at 30 June 2021            % 
Unrated                 (0.28) 
Derivatives               (0.28) 
Cash and investment grade        77.29 
Cash on deposit             3.20 
AAA                   5.52 
AA+                   1.85 
AA                    3.94 
AA-                   3.38 
A+                    0.21 
A                    0.65 
A-                    2.30 
BBB+                   8.71 
BBB                   12.94 
BBB-                   25.11 
M&G European Loan Fund (ELF) (see note) 9.48 
Sub-investment grade           22.99 
BB+                   4.33 
BB                    5.39 
BB-                   2.55 
B+                    1.77 
B                    2.96 
B-                    1.95 
CCC+                   0.64 
CCC-                   0.48 
D                    0.24 
M&G European Loan Fund (ELF) (see note) 2.68 
Total                  100.00 

Source: State Street.

(MORE TO FOLLOW) Dow Jones Newswires

September 16, 2021 10:43 ET (14:43 GMT)

DJ M&G Credit Income Investment Trust plc: 2021 -4-

Note: ELF is an open-ended fund managed by M&G which invests in leveraged loans issued by, generally, substantial private companies located in the UK and Continental Europe. ELF is not rated and the Investment Manager has determined an implied rating for this investment, utilising rating methodologies typically attributable to collateralised loan obligations. On this basis, 78% of the Company's investment in ELF has been ascribed as being investment grade, and 22% has been ascribed as being sub-investment grade. These percentages have been utilised on a consistent basis for the purposes of determination of the Company's adherence to its obligation to hold no more than 30% of its assets in below investment grade securities.

Top 20 holdings % 
            Company Description 
as at 30 June 2021 
            Open-ended fund managed by M&G that invests in leveraged loans issued by, generally, 
M&G European Loan Fund substantial private companies located in the UK and Continental Europe. The fund's objective is 
            to create attractive levels of current income for investors while maintaining relatively low 
12.16%         volatility of NAV. (Private) 
 
Sonovate Limited Var. 
Rate 12 Apr 2022    Bilateral loan to a company providing companies in the recruitment industry with an integrated 
            service that incorporates placement management, invoicing and financing. (Private) 
1.80% 
 
 
Atlas 2020 1 Trust Var. Floating-rate, senior tranche of a bilateral RMBS transaction backed by a pool of Australian 
Rate 30 Sep 2050    equity release mortgages. (Private) 
1.65% 
Westbourne 2016 1 WR 
Senior Var. Rate 30 Sep Westbourne provides working capital finance to SMEs in the UK. The company is focused on small 
2023          borrowers and has employed an advanced technology platform for the application, underwriting 
            and monitoring of loans. (Private) 
1.59% 
 
 
Delamare Finance FRN 
1.279% 19/02/2029    Floating-rate, senior tranche of a CMBS secured by the sale and leaseback of 33 Tesco 
            superstores and 2 distribution centres. (Public) 
1.59% 
 
 
Finance for Residential High grade (AA/Aa3), fixed-rate bond backed by cash flows from housing association loans. 
Social Housing 8.569% 4 (Public) 
Oct 2058 
 
1.54% 
Hall & Woodhouse Var. 
Rate 30 Dec 2023    Bilateral loan to a regional UK brewer that manages a portfolio of 219 freehold and leasehold 
            pubs. (Private) 
1.53% 
 
 
Signet Excipients Var. Fixed-rate loan secured against two large commercial premises in London, currently leased to 2 
Rate 20 Oct 2025    FTSE listed UK corporations. (Private) 
1.42% 
NewDay Partnership 
Funding 2017-1 FRN   High grade ABS (AAA). UK Creditcard. Securitisation of a portfolio of designated consumer 
0.8053% 15 Dec 2027   credit card, store card and instalment credit accounts initially originated or acquired by 
            NewDay Ltd in the UK. (Public) 
1.39% 
 
 
Regenter Myatt Field  PFI (Private Finance Initiative) floating-rate, amortising term loan relating to the already 
North Var. Rate 31 Mar completed refurbishment and ongoing maintenance of residential dwellings and communal 
2036          infrastructure in the London borough of Lambeth. (Private) 
1.35% 
Hammond Var. Rate 28  Secured, bilateral real estate development loan backed by a combined portfolio of 2 office 
Oct 2025        assets leased to an underlying roster of global corporate tenants. (Private) 
1.32% 
Project Driver TL Var. Senior term loan to a provider of hire purchase financing on used domestic motor vehicles to 
Rate          consumers in the UK. (Private) 
1.32% 
RIN II FRN 1.778% 10 
Sep 2030        Mixed CLO (AAA). Consists primarily of senior secured infrastructure finance loans managed by 
            RREEF America L.L.C. (Public) 
1.26% 
 
 
Dragon Finance FRN   Floating-rate, subordinated tranche of a securitisation of the sale and leaseback of 10 
1.3665% 13 Jul 2023   supermarket sites sponsored by J Sainsbury plc ('Sainsbury's'). (Public) 
1.14% 
Finance for Residential 
Social Housing 8.369% 4 
Oct 2058        High grade (AA), fixed rate bond backed by cash flows from housing association loans. (Public) 
1.12% 
Lewisham Var. Rate 12  Senior secured, fixed-rate term loan funding the costs of acquiring and developing a site in 
Feb 2023        Lewisham to provide 758-bed purpose-built student accommodation and 67 affordable housing 
            units. (Private) 
1.10% 
NewRiver REIT 3.5% 7 
Mar 2028        NewRiver REIT PLC operates as a real estate investment trust investing in retail properties 
            throughout the United Kingdom. Fixed, callable bond. Senior unsecured. (Public) 
1.09% 
 
 
Marston's Issuer FRN  Marston's PLC is a leading independent brewing and pub retailing business. Marston's Issuer PLC 
1.7083% 15 Oct 2031   operates as a special purpose entity on behalf of Marstons PLC, formed for the purpose of 
            issuing debt securities to repay existing credit facilities, refinance indebtedness, and for 
1.07%          acquisition purposes. (Public) 
 
Ripon Mortgages FRN   High Grade ABS (AA+/Aaa). UK RMBS. The portfolio comprises buy-to-let loans originated by 
1.2814% 20 Aug 2056   Bradford and Bingley and Mortgage Express, secured over residential properties located in 
            England and Wales. (Public) 
1.05% 
 
Hammerson 6% 23 Feb   Hammerson plc develops, builds, and manages commercial buildings, offices, and shopping centres 
2026          mainly operating throughout the United Kingdom, but also with investment and development 
            activities in France and Germany Senior unsecured, bullet bond. (Public) 
1.04% 
 
 

Interim management report and statement of directors' responsibilities

Interim management report

The important events that have occurred during the period under review, the key factors influencing the financial statements and the principal factors that could impact the remaining six months of the financial period are set out in the Chairman's statement and the Investment Manager's report.

Principal risks

The principal risks faced by the Company during the remaining six months of the year can be divided into various areas as follows:

*       Market risk; 
*       Credit risk; 
*       Investment management performance risk; 
*       Liquidity risk; 
*       Dividend policy risk; 
*       Operational risk; 
*       Regulatory, legal and statutory risk: changes in laws, government policy or regulations; and 
*       Sustainability risk. 

These are consistent with the principal risks described in more detail in Company's Annual Report and Financial Statements for the year ended 31 December 2020, which can be found in the Strategic Report on pages 17 to 22 and in note 14 on pages 95 to 98 and which are available on the website at: www.mandg.co.uk/creditincomeinvestmenttrust The Board continues to review the societal and economic impacts of governmental responses to theCOVID-19 pandemic, as well as the operational risks that the pandemic poses to the Company and its service providers. The duration and ultimate impact of the pandemic remains difficult to predict and the Board will continue to monitor and report on material developments on an ongoing basis.

For further information on the impact of COVID-19 on the Company's principal risks and uncertainties, please refer to the Investment Manager's report.

The Investment Manager and the Company's other third-party service providers have implemented appropriate business continuity plans and remain fully operational whilst their staff continue to predominantly work from home. Notwithstanding the overarching impact of COVID-19, in the view of the Board, the principal risks facing the Company since the previous report remain unchanged and these principal risks and uncertainties are equally applicable to the remaining six months of the financial year as they were to the six months under review.

Going concern In accordance with the latest guidance issued by the Financial Reporting Council, the Directors have undertaken and documented a rigorous assessment of whether the Company is a going concern. The Directors considered all available information when undertaking the assessment.

The Directors believe that the Company has appropriate financial resources to enable it to meet its day-to-day working capital requirements and the Directors believe that the Company is well placed to continue to manage its business risks.

In assessing the going concern basis of accounting, the Directors have also considered the COVID-19 pandemic and the impact this may have on the Company's investments and the Company's NAV.

The Directors consider that the Company has adequate resources to continue in operational existence for the next 12 months. For this reason they continue to adopt the going concern basis of accounting in preparing these condensed financial statements. Related party disclosure and transactions with the Investment Manager M&G Alternatives Investment Management Limited, as Investment Manager, is a related party to the Company. The management fee due to the Investment Manager for the period is disclosed in the condensed income statement and in note 3, and amounts outstanding at the period end are shown in note 8. The Company holds an investment in M&G European Loan Fund which is managed by M&G Investment Management Limited. At the period end this was valued at GBP17,458,741 and represented 12.16% of the Company's investment portfolio.

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The Directors of the Company are related parties. The Chairman receives an annual fee of GBP41,000, the Chairman of the Audit Committee receives an annual fee of GBP35,750 and a non-executive Director receives an annual fee of GBP30,750. Mark Hutchinson was employed by M&G as Chair of Private Assets and the Company as a non-executive Director until 31 August 2021 and agreed to waive his fees. There are certain situations where the Company undertakes purchase and sale transactions with other M&G managed funds. All such transactions are subject to the provisions of M&G's fixed income dealing procedures and prior approval by senior fixed income managers authorised by M&G to approve such trades. Trades are conducted on liquidity and pricing terms which at the relevant time are no worse than those available to the Company from dealing with independent third parties.

Statement of directors' responsibilities

The Directors confirm that to the best of their knowledge:

the condensed set of financial statements has been prepared in accordance with Financial Reporting 
       Standard 104 (Interim Financial Reporting) and give a true and fair view of the assets, liabilities, 
*       financial position and profit or loss of the Company; and 
 
       this Interim management report, together with the Chairman's statement, Investment Manager's report and 
*       the condensed set of financial statements include a fair review of the information required by: 
 
         DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important events 
         that have occurred during the six months ended 30 June 2021 and their impact on the condensed set of 
       a. financial statements; and a description of the principal risks for the remaining six months of the 
         period; and 
 
         DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions that 
       b. have taken place during the six months ended 30 June 2021 and that have materially affected the 
         financial position or performance of the Company during that period; and any changes in the related 
         party transactions that could do so. 

The Half Year Report and unaudited condensed set of financial statements were approved by the Board of Directors on 16 September 2021 and the above responsibility statement was signed on its behalf by:

David Simpson

Chairman

16 September 2021

Condensed income statement

Six months ended    Six months ended     Year ended 
                       30 June 2021      30 June 2020       31 December 2020 
                       (unaudited)       (unaudited)        (audited) 
                     Note Revenue Capital Total  Revenue Capital Total   Revenue Capital Total 
                       GBP'000  GBP'000  GBP'000  GBP'000  GBP'000  GBP'000   GBP'000  GBP'000  GBP'000 
Net gains/(losses) on investments    7  -    541   541   -    (1,661) (1,661)  -    2,714  2,714 
Net gains/(losses) on derivatives    7  -    2,428  2,428  -    (2,701) (2,701)  -    (1,368) (1,368) 
Net currency (losses)/gains          (36)  (140)  (176)  44   141   185    (7)   451   444 
Income                  3  2,735  -    2,735  2,451  -    2,451   5,195  -    5,195 
Investment management fee           (451)  -    (451)  (355)  -    (355)   (714)  -    (714) 
Other expenses                (254)  -    (254)  (294)  -    (294)   (464)  -    (464) 
Net return on ordinary activities before   1,994  2,829  4,823  1,846  (4,221) (2,375)  4,010  1,797  5,807 
finance costs and taxation 
Finance costs              5  (61)  -    (61)  -    -    -     (24)  -    (24) 
Net return on ordinary activities before   1,933  2,829  4,762  1,846  (4,221) (2,375)  3,986  1,797  5,783 
taxation 
Taxation on ordinary activities        -    -    -    -    -    -     -    -    - 
Net return attributable to Ordinary      1,933  2,829  4,762  1,846  (4,221) (2,375)  3,986  1,797  5,783 
Shareholders after taxation 
Net return per Ordinary Share (basic and 2  1.34p  1.96p  3.30p  1.40p  (3.20)p (1.80)p  2.88p  1.30p  4.18p 
diluted) 

The total column of this statement represents the Company's profit and loss account. The 'Revenue' and 'Capital' columns represent supplementary information provided under guidance issued by the Association of Investment Companies.

All revenue and capital items in the above statement derive from continuing operations.

The Company has no other comprehensive income and therefore the net return on ordinary activities after taxation is also the total comprehensive income for the period.

The accompanying notes form an integral part of these condensed financial statements.

Condensed statement of financial position

As at 30 June   As at 30 June   As at 31 
                                  2021       2020       December 
                                  (unaudited)    (unaudited)    2020 (audited) 
                                Note GBP'000  GBP'000   GBP'000  GBP'000   GBP'000  GBP'000 
Non-current assets 
Investments at fair value through profit or loss        7      139,439      135,227      140,091 
Current assets 
Derivative financial assets held at fair value through profit 7  -         -         225 
or loss 
Receivables                          8  1,798       1,080       1,345 
Cash and cash equivalents                   8  6,944       11,362      7,278 
                                  8,742       12,442      8,848 
Current liabilities 
Derivative financial liabilities held at fair value through  7  (408)       (944)       - 
profit or loss 
Payables                            8  (1,476)      (5,992)      (2,311) 
                                  (1,884)      (6,936)      (2,311) 
Net current assets                             6,858       5,506       6,537 
Net assets                                 146,297      140,733      146,628 
Capital and reserves 
Called up share capital                    9      1,447       1,447       1,447 
Share premium                                42,217      42,208      42,217 
Special distributable reserve                 10      97,296      98,831      98,499 
Capital reserve                        9      4,313       (2,669)      3,349 
Revenue reserve                               1,024       916        1,116 
Total shareholders' funds                          146,297      140,733      146,628 
Net Asset Value per Ordinary Share (basic and diluted)     2      102.04p      97.23p      101.40p 

The accompanying notes form an integral part of these condensed financial statements.

Approved and authorised for issue by the Board of Directors on 16 September 2021 and signed on its behalf by:

David Simpson

Chairman

Company registration number: 11469317

16 September 2021

Condensed statement of changes in equity

Called up          Special 
Six months ended 30 June 2021      Ordinary Share  Share   distributable    Capital  Revenue  Total 
(unaudited)                        premium  reserve       reserve  reserve 
                     capital 
                  Note GBP'000       GBP'000   GBP'000        GBP'000   GBP'000   GBP'000 
Balance at 31 December 2020       1,447       42,217  98,499        3,349   1,116   146,628 
Purchase of Ordinary Shares to be    -         -     (1,203)       -     -     (1,203) 
held in treasury 
Net return attributable to        -         -     -          2,829   1,933   4,762 
shareholders 
Dividends paid           6  -         -     -          (1,865)  (2,025)  (3,890) 
Balance at 30 June 2021         1,447       42,217  97,296        4,313   1,024   146,297 
                  Called up Ordinary 
Six months ended 30 June 2020    Share       Share   Special distributable Capital   Revenue   Total 
(unaudited)                      premium  reserve        reserve   reserve 
                  capital 
                Note GBP'000       GBP'000   GBP'000         GBP'000    GBP'000    GBP'000 
Balance at 31 December 2019     1,300       28,229   99,000        1,968    1,735    132,232 
Issue of Ordinary Shares    9  147        13,979   -           -      -      14,126 
Net return attributable to     -         -     -           (4,221)   1,846    (2,375) 
shareholders 

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Dividends paid         6  -         -     (169)         (416)    (2,665)   (3,250) 
Balance at 30 June 2020       1,447       42,208   98,831        (2,669)   916     140,733 
                     Called up          Special 
Year ended 31 December 2020     Note Ordinary Share  Share   distributable    Capital  Revenue  Total 
(audited)                         premium  reserve       reserve  reserve 
                     capital 
                     GBP'000       GBP'000   GBP'000        GBP'000   GBP'000   GBP'000 
Balance at 31 December 2019       1,300       28,229  99,000        1,968   1,735   132,232 
Issue of Ordinary Shares      9  147        13,945  -          -     -     14,092 
Purchase of Ordinary Shares to be    -         -     (129)        -     -     (129) 
held in treasury 
Initial public offering costs      -         43    -          -     -     43 
written off 
Net return attributable to        -         -     -          1,797   3,986   5,783 
shareholders 
Dividends paid           6  -         -     (372)        (416)   (4,605)  (5,393) 
Balance at 31 December 2020       1,447       42,217  98,499        3,349   1,116   146,628 

The accompanying notes form an integral part of these condensed financial statements.

Condensed cash flow statement

Note Six months ended Six months ended Year ended 
                                30 June 2021   30 June 2020   31 December 2020 
 
                                (unaudited)   (unaudited)   (audited) 
                                GBP'000      GBP'000      GBP'000 
Cash flows from operating activities 
Net profit/(loss) before finance costs and taxation      4,823      (2,375)     5,807 
Adjustments for: 
Net gains/(losses) on investments             7  (541)      1,661      (2,714) 
Net gains/(losses) on derivatives             7  (2,428)     2,701      1,368 
Decrease/(increase) in receivables               133       50        (253) 
(Decrease) in payables                     (165)      (341)      (96) 
Purchases of investments(a)                7  (19,439)     (43,731)     (78,730) 
Sales of investments(a)                  7  22,437      37,644      68,430 
Net cash inflow/(outflow) from operating activities      4,820      (4,391)     (6,188) 
Financing activities 
Finance costs                       5  (61)       -        (24) 
Issue of Ordinary Shares                    -        14,126      14,092 
Initial public offering costs written off           -        -        43 
Purchase of Ordinary Shares to be held in treasury       (1,203)     -        (129) 
Dividend paid                       6  (3,890)     (3,250)     (5,393) 
Net cash (outflow)/inflow from financing activities      (5,154)     10,876      8,589 
(Decrease)/Increase in cash and cash equivalents        (334)      6,485      2,401 
Cash and cash equivalents at the start of the period/year   7,278      4,877      4,877 
(Decrease)/Increase in cash and cash equivalents as above   (334)      6,485      2,401 
Cash and cash equivalents at the end of the period/year  8  6,944      11,362      7,278 

[a] Receipts from the sale of, and payments to acquire investment securities have been classified as components of cash flows from operating activities because they form part of the company's dealing operations.

The accompanying notes form an integral part of these condensed financial statements.

Notes to the condensed financial statements

1 Accounting policies

The condensed financial statements have been prepared on a going concern basis under the historical cost convention, modified to include certain items at fair value, and in accordance with United Kingdom Accounting Standards, including Financial Reporting Standard 104 (FRS 104) Interim Financial Reporting issued by the Financial Reporting Council and the Statement of Recommended Practice (SORP) issued by the Association of Investment Companies (AIC) in October 2019 "Financial Statements of Investment Trust Companies and Venture Capital Trusts".

The annual Financial Statements have been prepared in accordance with the Financial Reporting Standard 102 (FRS 102) and the AIC SORP.

The accounting policies applied to this condensed set of financial statements are consistent with those applied in the Annual Report and Financial Statements for the year ended 31 December 2020.

The functional and presentational currency of the Company is pounds sterling because that is the currency of the primary economic environment in which the Company operates.

All values are recorded to nearest thousands, unless otherwise stated.

2 Returns and net asset value

Six months ended Six months ended Year ended 
 
                                 30 June 2021   30 June 2020   31 December 2020 
Revenue return 
Revenue return attributable to Ordinary Shareholders (GBP'000)   1,933      1,846      3,986 
Weighted average number of shares in issue during the period/year 144,490,744   131,782,457   138,289,698 
Revenue return per Ordinary Share (basic and diluted)       1.34p      1.40p      2.88p 
Capital return 
Capital return attributable to Ordinary Shareholders (GBP'000)   2,829      (4,221)     1,797 
Weighted average number of shares in issue during the period/year 144,490,744   131,782,457   138,289,698 
Capital return per Ordinary Share (basic and diluted)       1.96p      (3.20)p     1.30p 
Net return 
Net return per Ordinary Share (basic and diluted)         3.30p      (1.80)p     4.18p 
NAV per Ordinary Share 
Net assets attributable to Ordinary Shareholders (GBP'000)     146,297     140,733     146,628 
Number of shares in issue at period/year end           143,367,771   144,745,771   144,605,771 
NAV per Ordinary Share                      102.04p     97.23p      101.40p 

3 Income

Six months ended Six months ended Year ended 
                    30 June 2021   30 June 2020   31 December 2020 
                    GBP'000      GBP'000      GBP'000 
Income from investments 
Interest income from Debt Instruments  2,421      2,180      4,633 
Distributions from investment funds   260       227       468 
Management fee rebate          51        36        78 
                    2,732      2,443      5,179 
Other income 
Interest from cash and cash equivalents 3        8        16 
                    2,735      2,451      5,195 

4 Expenses

Non-audit fees (including VAT) payable to the auditor in respect of the agreed upon procedures on the Half Year Report as of 30 June 2021 are GBP12,600 (30 June 2020: GBP12,000). The agreed upon procedures did not constitute an audit engagement or a review of the Half Yearly Report.

5 Finance costs

Six months ended Six months ended Year ended 
         30 June 2021   30 June 2020   31 December 2020 
         GBP'000      GBP'000      GBP'000 
Commitment fee  37        -        15 
Arrangement fees 6        -        3 
Legal fees    18        -        6 
         61        -        24 

On 19 October 2020 the Company entered into a GBP25 million revolving credit facility agreement with State Street Bank International GmbH. As at 30 June 2021 no amounts were drawn down.

6 Dividends

Six months ended Six months   Year ended 
                                  ended 
                         30 June 2021   30 June 2020  31 December 2020 
                         GBP'000       GBP'000      GBP'000 
2019 second interim interest distribution of 1.33p    -      1,729   1,729 
2020 first interim interest distribution of 0.72p     -      936    936 
2020 second interim interest distribution of 0.63p    -      -     912 
2020 third interim interest distribution of 0.71p     -      -     1,028 
2020 fourth interim interest distribution of 0.77p    1,114    -     - 
2021 first interim interest distribution of 0.63p     911     -     - 
                             2,025    2,665   4,605 
Capital 
2019 second interim dividend of 0.32p           -      416    416 
2020 first interim dividend of 0.13p           -      169    169 
2020 second interim dividend of 0.14p           -      -     203 
2020 fourth interim dividend of 1.18p           1,706    -     - 

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2021 first interim dividend of 0.11p           159     -     - 
                             1,865    585    788 
 

On 27 July 2021 the Board declared a second interim dividend of 0.76p per Ordinary Share for the year ended 31 December 2021, which was paid on 27 August 2021 to Ordinary Shareholders on the register on 6 August 2021. The ex-dividend date was 5 August 2021.

In accordance with FRS 102, Section 32, 'Events After the End of the Reporting Period', the 2021 second interim dividend has not been included as a liability in this set of financial statements.

7 Investments held at fair value through profit or loss (FVTPL)

As at    As at    As at 
                           30 June 2021 30 June 2020 31 December 2020 
                           GBP'000    GBP'000    GBP'000 
Opening valuation                  140,316   127,316   127,316 
Analysis of transactions made during the period/year 
Purchases at cost                  18,769    49,011    80,084 
Sale proceeds                    (23,023)   (37,682)   (68,430) 
Gains/(losses) on investments            2,969    (4,362)   1,346 
Closing valuation                  139,031   134,283   140,316 
Closing cost                     138,251   135,973   138,257 
Closing investment holding gains/(losses)      780     (1,690)   2,059 
Closing valuation                  139,031   134,283   140,316 

The Company received GBP23,023,000 from investments sold in the six months period ended 30 June 2021 (30 June 2020: GBP37,682,000). The book cost of these investments when they were purchased was GBP21,836,000 (30 June 2020: GBP38,477,000. These investments have been revalued over time and until they were sold any unrealised gains/losses were included in the fair value of the investments.

As at          As at    As at 
                            30 June 2021      30 June 2020 31 December 2020 
                            GBP'000          GBP'000    GBP'000 
Gains on investments 
Net realised gains/(losses) on disposal of investments 541           (1,661)  2,714 
Net gains/(losses) on derivatives           2,428          (2,701)  (1,368) 
Net gains/(losses) on investments           2,969          (4,362)  1,346 
 
                                        As at    As at    As at 
                                        30 June 2021 30 June 2020 31 December 
                                                     2020 
                                        GBP'000    GBP'000    GBP'000 
Closing valuation 
Investments at fair value through profit or loss                139,439   135,227   140,091 
Derivative financial (liabilities)/assets held at fair value through profit or (408)    (944)    225 
loss 
Closing valuation                               139,031   134,283   140,316 

8 Receivables, Cash and Cash Equivalents and Payables

As at    As at    As at 
                    30 June 2021 30 June 2020 31 December 2020 
                    GBP'000    GBP'000    GBP'000 
Receivables 
Sales for future settlement       586     38      - 
Accrued income             1,128    990     1,204 
Prepaid expenses            33      12      41 
Management fee rebate          51      40      82 
Other receivables            -      -      18 
Total receivables            1,798    1,080    1,345 
Cash and cash equivalents 
Cash at bank              1,302    5,809    2,269 
Amounts held at futures clearing houses 1,041    962     1,009 
Cash on deposit             4,601    4,591    4,000 
Total cash and cash equivalents     6,944    11,362    7,278 
Payables 
Purchases for future settlement     684     5,280    1,354 
Expenses payable and deferred income  351     343     278 
Management fee payable         438     318     677 
Other payables             3      51      2 
Total payables             1,476    5,992    2,311 

9 Called up share capital

As at 30 June 2021   As at 30 June 2020   As at 31 December 2020 
                        Number of  Nominal   Number of  Nominal   Number of  Nominal 
                        shares   value GBP'000 shares   value GBP'000 shares   value GBP'000 
Ordinary Shares of 1p 
Ordinary Shares in issue at the beginning of  144,605,771 1,446    130,000,001 1,300    130,000,001 1,300 
the period/year 
Ordinary Shares issued during the period/ year -      -      14,745,770 147     14,745,770 147 
Purchase of Ordinary Shares held in treasury  (1,238,000) (12)    -      -      (140,000)  (1) 
Ordinary Shares in issue at the end of the   143,367,771 1,434    144,745,771 1,447    144,605,771 1,446 
period/year 
Treasury Shares (Ordinary Shares of 1p) 
Treasury Shares at the beginning of the period 140,000   1      -      -      -      - 
/year 
Purchase of Ordinary Shares held in treasury  1,238,000  12     -      -      140,000   1 
Treasury Shares at the end of the period/year 1,378,000  13     -      -      140,000   1 
Total Ordinary Shares in issue and in treasury 144,745,771 1,447    144,745,771 1,447    144,745,771 1,447 
at the end of the period/year 

The analysis of the capital reserve is as follows:

Six months ended 30 June 2021  Six months ended 30 June 2020  Year ended 31 December 2020 
           Realised  Investment Total   Realised  Investment Total   Realised  Investment Total 
           capital  holding   capital  capital  holding   capital  capital  holding   capital 
           reserve  gains    reserve  reserve  gains    reserve  reserve  gains    reserve 
           GBP'000   GBP'000    GBP'000   GBP'000   GBP'000    GBP'000   GBP'000   GBP'000    GBP'000 
Capital reserve at 
the beginning of the 1,290   2,059    3,349   (265)   2,233    1,968   (265)   2,233    1,968 
period/year 
Gains/(losses) on 
realisation of    4,248   -      4,248   (439)   -      (439)   1,520   -      1,520 
investments at fair 
value 
Realised currency 
gains during the   (140)   -      (140)   141    -      141    451    -      451 
period/year 
Movement in     -     (1,279)   (1,279)  -     (3,923)   (3,923)  -     (174)    (174) 
unrealised losses 
Dividends paid    (1,865)  -      (1,865)  (416)   -      (416)   (416)   -      (416) 
Capital reserve at 
the end of the    3,533   780     4,313   (979)   (1,690)   (2,669)  1,290   2,059    3,349 
period/year 

The above split in capital reserve is shown in accordance with provisions of the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts', 2019.

10 Special distributable reserve

The share premium of GBP99,000,001 was cancelled on 12 February 2019 and transferred to the special distributable reserve, in accordance with section 610 of the Companies Act 2006. The Company may, at the discretion of the Board, pay all or part of any future dividends out of this special distributable reserve, taking into account the Company's investment objective.

11 Related party transactions

M&G Alternatives Investment Management Limited, as Investment Manager is a related party to the Company. The management fee payable to the Investment Manager for the period is disclosed in the condensed income statement and in note 3, amounts outstanding at the period end are shown in note 8.

The Company holds an investment in M&G European Loan Fund which is managed by M&G Investment Management Limited. At the period end this was valued at GBP17,458,741 (30 June 2020: GBP13,163,135) and represented 12.16% (30 June 2020: 9.53%) of the Company's investment portfolio.

The Directors of the Company are related parties. For further details of the annual fees payable to the Directors, please refer to the Related party disclosure and transactions with the Investment Manager section.

12 Fair value hierarchy

Under FRS 102 an entity is required to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy shall have the levels stated below.

-- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;

-- Level 2: other significant observable inputs (including quoted prices for similar investments, interestrates, prepayments, credit risk, spread premium, credit ratings etc.).

-- Level 3: significant unobservable input (including the Company's own assumptions in determining the fairvalue of investments, discounted cashflow model or single broker quote).

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The financial assets measured at FVTPL are grouped into the fair value hierarchy as follows:

As at 30 June 2021         As at 30 June 2020         As at 31 December 2020 
          Level 1 Level 2 Level 3 Total  Level 1 Level 2 Level 3 Total  Level 1 Level 2 Level 3 Total 
          GBP'000  GBP'000  GBP'000  GBP'000  GBP'000  GBP'000  GBP'000  GBP'000  GBP'000  GBP'000  GBP'000  GBP'000 
Financial assets 
at FVTPL 
Debt Instruments  -    60,039  61,941  121,980 -    99,465  22,599  122,064 -    87,572  35,232  122,804 
Investment in   -    17,459  -    17,459 -    13,163  -    13,163 -    17,287  -    17,287 
funds 
Derivatives    -    151   -    151   -    -    -    -    -    -    -    - 
Financial 
liabilities at 
FVTPL 
Derivatives    (238)  (321)  -    (559)  (107)  (837)  -    (944)  (369)  594   -    225 
Net fair value   (238)  77,328  61,941  139,031 (107)  111,791 22,599  134,283 (369)  105,453 35,232  140,316 

Valuation techniques for Level 3

The debt investments within the Company utilise a number of valuation methodologies such as a discounted cash flow model, which will use the relevant credit spread and underlying reference instrument to calculate a discount rate. Unobservable inputs typically include spread premiums and internal credit ratings.

Some debt instruments are valued at par and are monitored to ensure this represents fair value for these instruments. On a monthly basis these instruments are assessed to understand whether there is any evidence of market price movements, including impairment or any upcoming refinancing.

In addition, some are priced by a single broker quote, which is typically the traded broker, who provides an indicative mark.

13 Capital commitments

There were outstanding unfunded investment commitments of GBP4,821,000 (30 June 2020: GBP3,720,000) at the period/year end.

As at    As at    As at 
                         30 June 2021 30 June 2020 31 December 2020 
                         GBP'000    GBP'000    GBP'000 
Bayswater RD Mercury Var. Rate 31 May 2024    2,235    -      - 
Lewisham Var. Rate 12 Feb 2023          519     2,004    1,198 
Greensky Var. Rate 11 Dec 2023          476     -      15 
Jamshid Ventures Var. Rate 23 Jul 2023      328     -      786 
Kaveh Ventures LLC Var. Rate 16 May 2022     323     -      - 
Harmoney Warehouse No 2 Var. Rate 31 Dec 2026   301     -      - 
Sonovate Var . Rate 12 Apr 2022          280     560     560 
Bayswater RD Mercury Var. Rate 1 May 2024     201     -      - 
Valentine Senior Var. Rate 7 Mar 2022       133     133     133 
Gate 1 Var. Rate 4 Jun 2022 (Junior)       21      167     110 
Gate 1 Var. Rate 4 Jun 2022 (Senior)       4      165     94 
Westbourne 2016 1 WR Senior Var. Rate 30 Sep 2023 -      597     598 
Gate 2 Var. Rate 4 Jun 2021            -      94      - 
                         4,821    3,720    3,494 

14 Half Year Report

The financial information contained in this Half Year Report does not constitute statutory accounts as defined in section 434 - 436 of the Companies Act 2006.

The financial information for the six months ended 30 June 2020 and 30 June 2021 has not been reviewed or audited by the Company's auditors.

The figures and financial information for the year ended 31 December 2020 have been extracted from the latest published audited financial statements, which have been filed with the Registrar of Companies. The report of the Auditor on those accounts was unqualified and did not contain a statement under sections 498(2) or (3) of the Companies Act 2006.

-----------------------------------------------------------------------------------------------------------------------

ISIN:      GB00BFYYL325, GB00BFYYT831 
Category Code: IR 
TIDM:      MGCI 
LEI Code:    549300E9W63X1E5A3N24 
OAM Categories: 1.2. Half yearly financial reports and audit reports/limited reviews 
Sequence No.:  122365 
EQS News ID:  1234030 
 
End of Announcement EQS News Service 
=------------------------------------------------------------------------------------
 

Image link: https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=show_t_gif&application_id=1234030&application_name=news

(END) Dow Jones Newswires

September 16, 2021 10:43 ET (14:43 GMT)

© 2021 Dow Jones News
Die USA haben fertig! 5 Aktien für den China-Boom
Die Finanzwelt ist im Umbruch! Nach Jahren der Dominanz erschüttert Donald Trumps erratische Wirtschaftspolitik das Fundament des amerikanischen Kapitalismus. Handelskriege, Rekordzölle und politische Isolation haben eine Kapitalflucht historischen Ausmaßes ausgelöst.

Milliarden strömen aus den USA – und suchen neue, lukrative Ziele. Und genau hier kommt China ins Spiel. Trotz aller Spannungen wächst die chinesische Wirtschaft dynamisch weiter, Innovation und Digitalisierung treiben die Märkte an.

Im kostenlosen Spezialreport stellen wir Ihnen 5 Aktien aus China vor, die vom US-Niedergang profitieren und das Potenzial haben, den Markt regelrecht zu überflügeln. Wer jetzt klug investiert, sichert sich den Zugang zu den neuen Wachstums-Champions von morgen.

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