HEDGE FUND ALERT – Strong Start for Princeton Alternative

Startup Princeton Alternative Funding is beating its return target.

Princeton Alternative finances subprime consumer loans through a vehicle called Princeton Alternative Income Fund that launched on March 3. As of Nov. 30, the firm was posting a 12.5% return for a class that distributes interest payments to investors. That translates into an annualized return of 16.6%, topping its goal of 13-15%.

A class that reinvests interest income was faring even better, with a 13.3% gain.

Princeton Alternative has $57 million under management, and is aiming to bring in perhaps $150 million more over the next year. It extends lines of credit to specialty-finance companies, which in turn offer short-term loans to lower-income customers of businesses including used-car dealers, rent-to-own furniture stores and auto-repair shops.

Princeton Alternative’s lender-selection proves utilizes a consumer database maintained by its majority owner, credit-data company MicroBilt.