EJF Investments Limited (EJFI · LSE)
Lending to America's Small Banks
A London-listed fund that collects interest on debt issued by hundreds of small American banks and insurers, and pays most of that income out to shareholders through a dividend yielding over 8%.
Bull case for EJF Investments Limited
Resilient income from well-regulated debt
Interest on regulator-approved bank debt funds quarterly dividends that have never been cut since listing.
Earn's third party management fees
A 49% stake in the loan-pool manager earns fees on top of the portfolio's interest income.
Access UK investors cannot by themselves
Hundreds of small US bank loans, bought privately, packaged into one London-listed share.
Bear case for EJF Investments Limited
Shares persistently trade below asset value
The market values the fund well under its stated portfolio worth, and that gap can persist.
Borrowed money magnifies losses
Fixed-value preference shares rank ahead of ordinary holders, amplifying gains and losses alike.
Everything depends on one manager
EJF Capital sources, structures and manages nearly every holding, creating dependence and conflicts.