VPC Specialty Lending Investments PLC

ANNUAL REPORT

AND AUDITED

FINANCIAL STATEMENTS

For the year ended 31 December 2022

VPC SPECIALTY LENDING

INVESTMENTS PLC

INTRODUCTION

Financial Highlights 1

Introduction to the Company and the Group 5

Investment Objectives 5

STRATEGIC REPORT

Chairman’s Statement 8

Investment Manager’s Report 10

Business Model 18

Performance Management 20

Principal Risks 21

Culture 28

Employees, Human Rights, Social 29

and Community Issues

Board Diversity 29

Environmental, Social, and Governance 29

(ESG) Issues

Streamlined Energy and Carbon 29

Reporting (SECR)

INDEPENDENT AUDITORS’ REPORT

Independent Auditors’ Report 31

FINANCIAL STATEMENTS

Consolidated Statement of 40

Financial Position

Consolidated Statement of 42

Comprehensive Income

Consolidated Statement of 44

Changes in Equity

Consolidated Statement of 46

Cash Flows

Parent Company Statement of 48

Financial Position

Parent Company Statement of 49

Changes in Equity

Parent Company Statement of 51

Cash Flows

Notes to the Consolidated 52

Financial Statements

GOVERNANCE

Board of Directors 101

Directors’ Report 103

Corporate Governance Statement 108

Audit and Valuation Committee Report 119

Directors’ Remuneration Report 122

Statement of Directors’ Responsibilities in 127

Respect of the Financial Statements

Regulatory Disclosures 128

SHAREHOLDER INFORMATION

Shareholder Information 130

Definitions of Terms and Alternative 132

Performance Measures

Contact Details of the Advisers 134

CONTENTS

Company Number 9385218

FINANCIAL HIGHLIGHTS

RETURN SUMMARY FOR THE YEAR ENDED 31 DECEMBER 2022

All the terms and alternative performance measures above are defined on pages 132 and 133.

NAV (Cum Income)

Return

–6.97%

(2021: +27.60%)

Net Asset Value per

Ordinary Share

98.19P

(2021: 114.14p)

Dividends per

Ordinary Share

8.00p

(2021: 8.00p)

Total Shareholder Return

at 31 December 2022

(based on share price)

–1.19%

(2021: +27.32%)

Total Net Return

–£22.11 million

(2021: £73.21 million)

Revenue Return

£28.02 million

(2021: £21.12 million)

Discount to NAV

at 31 December 2022

15.37%

(2021: 19.22%)

Ordinary Share Price

at 31 December 2022

83.10p

(2021: 92.20p)

INTRODUCTION

VPC SPECIALTY LENDING INVESTMENTS PLC

PERFORMANCE

The table below illustrates the Company’s Cumulative NAV return and dividend per share from 1 January 2020 to

31 December 2022.

ORDINARY SHARE PERFORMANCE

The table below illustrates the Company’s Ordinary Share performance over the past three years. The Company’s discount to its

Ordinary Share NAV remained relatively consistent when comparing the end of 2022 and 2021 with the discount decreasing

slightly to 15.37% from 19.22%. The largest discount during the year was 29.39% (2021: 26.09%) while the smallest discount was

14.63% (2021: 9.53%). The graph below illustrates the movement between the trading price of the Ordinary Shares and the

announced NAV adjusted for dividends declared. Further information on the share price discount management policy can be

found on page 20.

Discount

Price

NAV

Price / NAV

(cum income)

Premium / Discount

40.00

50.00

60.00

70.00

80.00

90.00

100.00

110.00

120.00

130.00

Dec-22Sep-22Jun-22Mar-22Dec-21Sep-21Jun-21Mar-21Dec-20Sep-20Jun-20Mar-20Dec-19

–60.00%

–50.00%

–40.00%

–30.00%

–20.00%

–10.00%

0.00%

10.00%

20.00%

30.00%

NAV Return (%)

Dividends (p)

–10

Dec-22Sep-22Jun-22Mar-22Dec-21Sep-21Jun-21Mar-21Dec-20Sep-20Jun-20Mar-20Dec-19

–10

Dividend

NAV

INTRODUCTION continued

VPC SPECIALTY LENDING INVESTMENTS PLC

2 ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

TOP TEN POSITIONS

The table below provides a summary of the top ten exposures of the Group, net of gearing, as at 31 December 2022. The

summary includes a look-through of the Group’s investments in VPC Synthesis, L.P. and VPC Offshore Unleveraged Private Debt

Fund Feeder, L.P. to illustrate the exposure to underlying Portfolio Companies as it is a requirement of the investment policy (set

out on pages 130 and 131) to consider the application of the restrictions in this policy on a look-through basis.

PERCENTAGE

INVESTMENT COUNTRY INVESTMENT TYPE OF NAV

Deinde Group, LLC United States Asset Backed Lending 11.76%

Deinde Group, LLC (“Integra”) is an early-stage online provider of unsecured consumer loans to nonprime borrowers. Integra was

founded in March 2014 by Arthur Tretyak (CEO) and is led by a team of seasoned consumer finance and risk analytics executives.

The company is headquartered in Chicago, IL, and is owned by its management team and employees.

Caribbean Financial Group Holdings, L.P. Latin America Asset Backed Lending 9.28%

Caribbean Financial Group Holdings, L.P. (“CFG”) is the largest non-bank provider of unsecured consumer installment loans to the

Caribbean market, operating primarily in the western and southern Caribbean. CFG was founded in 1979, operates over 70 store

branches across eight Caribbean and Latin American countries, and has its most significant operations in Panama, Colombia, and

Trinidad & Tobago. CFG’s product offering includes loan sizes ranging from $200 to $13,000, loan terms up to 84 months with

no prepayment penalties, and fully amortising simple interest loans with equal monthly payments and rates based on

underwriting customers’ ability to pay.

Applied Data Finance, LLC United States Asset Backed Lending 8.74%

Applied Data Finance, LLC provides credit to non-prime and near-prime consumers in select states across the U.S. The company

is headquartered in San Diego, with offices in New York, in addition to an IT and call centre support in Chennai, India. Financings

are in the form of installment loans and range up to $5,000.

Perch HQ, LLC United States Asset Backed Lending 7.55%

Perch HQ, LLC (“Perch”) is a technology-enabled platform that seeks to acquire and operate a diverse portfolio of e-commerce

assets on retail marketplaces. The company aims to acquire underlying brands and drive value through post-acquisition brand

initiatives, including pricing strategy, advertising strategy, cost savings, supply chain efficiencies, and general Amazon account

management optimisation. The company was founded in October 2019 by Chris Bell, former Head of Custom Supply Chain at

Wayfair and principal at Bain & Company.

Razor Group GMBH Germany Asset Backed Lending 6.58%

Razor Group GmbH (“Razor”) is a technology driven consumer goods platform that acquires and operates a diverse portfolio of

branded Amazon third-party seller (“TPS”) assets primarily in Europe. Razor targets brands with €100K – €3.5 million of seller’s

discretionary earnings (“Asset-Level EBITDA”) to be acquired at purchase multiples of 1.5x – 5.0x TTM Asset-Level EBITDA.

FinanceApp AG Switzerland Equity Investment 6.19%

FinanceApp AG (“WeFox”) is a software application providing a hybrid technology and an in-person alternative to the modern

insurance broker. The company operates in Switzerland and Germany, acting as an intermediary between major insurance

providers and individual consumers. WeFox creates an innovative marketplace for the insurance industry, digitising the

management of consumer and broker insurance portfolios and aggregating data via one secure, easy-to-use platform. Customer

users can view their insurance agreements on their smartphones or computers, allowing them to review policies and premium

pricing, submit claims, and receive superior customer service support all through the WeFox platform.

VPC SPECIALTY LENDING INVESTMENTS PLC

PERCENTAGE

INVESTMENT COUNTRY INVESTMENT TYPE OF NAV

FinAccel Pte Ltd Singapore Asset Backed Lending 5.65%

FinAccel Pte Ltd (“FinAccel”) provides underbanked Indonesian consumers with a digital credit platform (d/b/a Kredivo) to finance

e-commerce purchases, pay bills and secure personal loans at competitive interest rates. The Kredivo platform allows users to secure

30-day “interest-free” point-of-sale loans to finance small ticket e-commerce purchases up to $200. Eligible Kredivo users are also

offered interest-bearing point-of-sale installment loans to finance larger e-commerce transactions up to $2,200. Kredivo operates as

a digital credit card and the underlying transaction engine with a dedicated checkout embedded into over 250 e-commerce

merchant websites and a mobile application that facilitates direct merchant purchases.

Heyday Technologies, Inc. United States Asset Backed Lending 4.30%

Heyday Technologies, Inc. (“Heyday”) is a tech enabled platform that seeks to acquire and aggregate a diverse portfolio of retail

assets which are sold primarily via e-commerce marketplaces. Heyday primarily targets Amazon Marketplace third-party sellers

(“TPS”). The company aims to acquire underlying brands/seller at 2-5x earnings, and drive value through post-acquisition brand

management initiatives and underlying multiple expansion. Heyday aims to differentiate itself from other TPS aggregators in the

novel ecosystem by investing heavily and early in its technology and analytics capabilities thereby allowing the company to

easily identify and optimise operating improvements within its portfolio at scale.

Elevate Credit, Inc. United States Asset Backed Lending 3.18%

Elevate Credit, Inc. (“Elevate”) is a lender of unsecured short-term cash advances and installment loans to individuals primarily

through the internet. Elevate provides consumers with access to responsible and transparent credit options within the non-prime

lending industry. Elevate currently offers and/or supports the following products: U.S. installment loans (Rise), lines of credit

(Elastic) and credit cards (Today Card).

Heyday Technologies, Inc. United States Equity Investment 3.11%

Heyday Technologies, Inc. (“Heyday”) is a tech enabled platform that seeks to acquire and aggregate a diverse portfolio of retail

assets which are sold primarily via e-commerce marketplaces. Heyday primarily targets Amazon Marketplace third-party sellers

(“TPS”). The company aims to acquire underlying brands/seller at 2-5x earnings, and drive value through post-acquisition brand

management initiatives and underlying multiple expansion. Heyday aims to differentiate itself from other TPS aggregators in the

novel ecosystem by investing heavily and early in its technology and analytics capabilities thereby allowing the company to

easily identify and optimise operating improvements within its portfolio at scale.

INTRODUCTION continued

VPC SPECIALTY LENDING INVESTMENTS PLC

4 ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

VPC SPECIALTY LENDING INVESTMENTS PLC

INTRODUCTION TO THE COMPANY AND THE GROUP

VPC Specialty Lending Investments PLC (the “Company” or “VSL”) provides asset-backed lending solutions to emerging and

established businesses (“Portfolio Companies”) with the goal of building long-term, sustainable income generation. VSL focuses

on providing capital to vital segments of the economy, which for regulatory and structural reasons are underserved by the

traditional banking industry. Among others, these segments include small business lending, working capital products, consumer

finance and real estate. VSL offers shareholders access to a diversified portfolio of opportunistic credit investments originated by

non-bank lenders with a focus on the rapidly developing technology-enabled lending sector.

The Company’s investing activities are undertaken by Victory Park Capital Advisors, LLC (the “Investment Manager” or “VPC”). VPC

is an established private capital manager headquartered in the United States with a global presence. VPC identifies and finances

emerging and established businesses globally and seeks to provide the Company with attractive yields on its portfolio of credit

investments. VPC offers a differentiated private lending approach by financing Portfolio Companies through asset-backed delayed

draw term loans, which is referred to as “Asset Backed Lending,” designed to limit downside risk while providing shareholders

with strong income returns. Through rigorous due diligence and credit monitoring by the Investment Manager, the Company

generates stable income with significant downside protection.

A summary of the principal terms of the Investment Manager’s appointment and a statement relating to their continuing

appointment can be found on page 118. The investment policy can be found beginning on page 130 of this Annual Report.

Founded in 2007 and headquartered in Chicago, VPC is an SEC-registered investment adviser that has been actively involved in

the financial services marketplace since 2010.

This annual report for the year to 31 December 2022 (the “Annual Report”) includes the results of the Company (also referred to

as the “Parent Company”) and its consolidated subsidiaries (together the “Group”). The Company (No. 9385218) was admitted to

the premium listing segment of the Official List of the Financial Conduct Authority (“FCA”) (the “Official List”) and to trading on

the London Stock Exchange’s main market for listed securities (the “Main Market”) on 17 March 2015, raising £200 million by

completing a placing and offer for subscription (the “Issue”). The Company raised a further £183 million via a C Share issue on

2 October 2015. The C Shares were converted into Ordinary Shares and were admitted to the Official List and to trading on the

Main Market on 4 March 2016.

INVESTMENT OBJECTIVES

The Company provides asset-backed lending solutions to emerging and established businesses with the goal of building

long-term, sustainable income generation. The Company focuses on providing capital to vital segments of the economy, which

for regulatory and structural reasons are underserved by the traditional banking industry. Among others, these segments include

small business lending, working capital products, consumer finance and real estate. The Company offers shareholders access to

a diversified portfolio of opportunistic credit investments originated by non-bank lenders with a focus on the rapidly developing

technology-enabled lending sector. Through rigorous diligence and credit monitoring, the Company generates stable income

with significant downside protection.

As previously disclosed, the Board determined that it would be in the best interests of the Company and its shareholders to put

forward formal proposals for a managed wind-down of the Company. Upon a successful vote at the general meeting on the

proposals put forth by the Board, the updated investment objective of the Company will be to conduct an orderly realisation of

the assets of the Company and be effected in a manner that seeks to achieve a balance between returning cash to Shareholders

promptly and maximising value.

INVESTMENT POLICY

The Company seeks to achieve its investment objectives by investing in opportunities in the financial services market through

portfolio companies and other lending related opportunities.

The Company invests directly or indirectly into available opportunities, including by making investments in, or acquiring interests

held by, third-party funds (including those managed by the Investment Manager or its affiliates).

Direct investments include consumer loans, SME loans, advances against corporate trade receivables and/or purchases of

corporate trade receivables originated by portfolio companies (“Debt Instruments”). Such Debt Instruments may be subordinated

in nature, or may be second lien, mezzanine or unsecured loans.

Indirect investments include investments in portfolio companies (or in structures set up by portfolio companies) through the

provision of senior secured floating rate credit facilities (“Credit Facilities”), equity or other instruments. Additionally, the

Company’s investments in Debt Instruments and Credit Facilities are made through subsidiaries of the Company or through

partnerships in order to achieve bankruptcy remoteness from the platform itself, providing an extra layer of credit protection.

The Company may also invest in other financial services related opportunities through a combination of debt facilities, equity or

other instruments.

The Company may also invest (in aggregate) up to 10% of its Gross Assets (at the time of investment) in listed or unlisted

securities (including equity and convertible securities or any warrants) issued by one or more of its portfolio companies or

financial services entities.

The Company invests across several portfolio companies, asset classes, geographies (primarily US, UK, Europe, Australia, Asia and

Latin America) and credit bands in order to create a diversified portfolio and thereby mitigates concentration risks.

INTRODUCTION continued

VPC SPECIALTY LENDING INVESTMENTS PLC

6 ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

STRATEGIC

REPORT

The Strategic Report comprises a review of the Company’s performance for the year ended 31 December 2022, the

Chairman’s Statement, and Strategy and Business Model, including principal and emerging risks and disclosures on

environmental matters, human rights, employee, social and community issues.

The aim of the Strategic Report is to provide shareholders with the ability to assess how the Directors have performed in

their duty to promote the success of the Company in accordance with section 172 of the Companies Act 2006 (the “Act”) by:

 analysing development and performance using appropriate Key Performance Indicators (“KPIs”);

 providing a fair and balanced review of the Company and Group’s business;

 outlining the principal risks and uncertainties affecting the Company and the Group;

 describing how the Company manages these risks;

 setting out the Company’s environmental, social and ethical policy;

 outlining the main trends and factors likely to affect the future development, performance and position of the

Company’s business; and

 setting out the direction in which the Company and the Group is heading.

STRATEGIC REPORT continued

VPC SPECIALTY LENDING INVESTMENTS PLC

8 ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

CHAIRMAN’S STATEMENT

In last year’s Chairman’s Statement, I noted that while 2021 was a year of exceptional progress and strong returns for its

shareholders, as 2022 unfolded, there was much to feel apprehensive about. In the event, although the threat of COVID-19 faded

somewhat, Russia’s invasion of Ukraine was a geopolitical event that indeed had broader implications for the global economy. It

was also a year when central banks attempted to counter rising inflation with a programme of interest rate hikes that affected

businesses and consumers. These factors all contributed to a turbulent economic and geopolitical backdrop, and also impacted

the performance and the longer-term prospects of the VPC Specialty Lending Investments PLC (“VSL” or the “Company”) itself.

Despite economic and geopolitical turbulence and uncertainty, the Company’s core asset backed lending business continued to

perform in line with expectations; however, the equity and publicly traded investments experienced continued unrealised losses.

Nonetheless, the Board will propose to shareholders that the Company change its investment policy to one providing for the

orderly winding down of the Company – more detail on which the Board expects to be published shortly after certain regulatory

approvals are received.

In light of the recent situation with Silicon Valley Bank (“SVB”) and Signature Bank (“SB”), the Company has reviewed all portfolio

company exposure and overall indirect exposure is considered to be low. As at 27 April 2023, there is no exposure to SB and

minor exposure to SVB, as all impacted portfolio companies with meaningful balances at SVB were able to transfer almost all of

their deposits out of the bank. Small deposit amounts may remain at SVB to pay out expenses as balances wind down and/or

new accounts are opened.

To note, the Group, Company and the Investment Manager do not have a direct banking relationship with SVB or SB.

2022 HIGHLIGHTS

 Gross Revenue Return of 12.63% offset by Gross Capital Return of –15.13% for the year;

 Total Net Asset Value (NAV) return of –6.97% for the year and 56.91% from inception-to-date;

 Total Shareholder return of –1.19% for the year and 38.69% from inception-to-date;

 Strong performance of the asset backed lending investments with revenue returns of 10.70%; and

 The Company declared its 20th consecutive quarterly dividend of 2.00p per share for the three-month period to December

2022 in February 2023.

THE COMPANY’S BUSINESS

It was a year of significantly different investment performance between the debt and equity portfolios. However, credit

performance was resilient. For the 12 months to the end of December 2022, the NAV per share of the Company decreased

–6.97% on a total return basis, comprising a NAV per share reduction from 114.14p to 98.19p, plus the 8.00p of dividends paid

in 2022. During the year, the traded share price fell from 92.20p to 83.10p. Dividends paid during the year were in line with the

dividend of 8.00p per year set out in the IPO Prospectus (“the Target Dividend”) and fully covered by the revenue returns. Paying

dividends in line with the Target Dividend continues to be the near-term target of the Company.

During the year, the weighted average coupon on the Company’s asset backed investments increased to 14.65% at 31 December

2022 from 10.41% at 31 December 2021 as the Company saw a rise in short-term interest rates.

As we announced on 22 December 2022, the commitment the Board made to Shareholders in 2020 (the “25% Exit Opportunity”)

was to offer Shareholders an Exit Opportunity for up to 25% of the shares in issue following the June 2023 Annual General

Meeting, should the shares continue to trade at an average discount greater than 5% over the first quarter of 2023. Three

measures of future performance were put in place in 2020, with the intention of offering the 25% Exit Opportunity in the event

that all three measures could not be met.

Various steps were taken from 2020 through 2022 to find a solution that would reduce the discount to NAV. While some of those

Shareholder-focused initiatives (including meetings with existing, new, and potential Shareholders) bore some fruit, the discount

to NAV nonetheless remained stubbornly wide.

In 2022, while it was understood by the Board that two of the three measures of future performance would be achieved, the

Board and its advisers believed that the third measure of reducing the discount to NAV would not be met. Further, the Board

and its advisers took the view that the 25% Exit Opportunity alone would not have a lasting impact on the discount and that

it might have a potentially detrimental impact on the Company’s Shareholders. If the 25% Exit Opportunity was realised, the

Company would shrink in size, resulting in the Company’s shares potentially becoming less liquid and the ratio of fees and other

costs potentially increasing as a proportion of NAV. After further consultation with its major Shareholders, the Board announced

on 22 December 2022 that it would be in the best interests of the Company and Shareholders to put forward formal proposals

to Shareholders for a managed wind-down of the entire Company instead of the 25% Exit Opportunity.

VPC SPECIALTY LENDING INVESTMENTS PLC

The Company expects shortly to issue a circular inviting shareholders to vote on two resolutions – the first to approve revisions

to the investment policy of the Company so that the Company’s assets can be realised in an orderly manner in order to provide

a managed exit over time for all Shareholders; and the second (to be voted on by independent shareholders) to approve

proposed amendments to the terms of the Investment Management Agreement between the Company and the Investment

Manager, principally concerning the way in which the Investment Manager is remunerated. The purpose of this is to reflect the

change in the Company’s investment objective and policy and to better align the interests of the Shareholders and the

Investment Manager. The resolution relating to the Investment Management Agreement will be voted on by independent

shareholders only because it is a related party transaction under the Listing Rules. Full details will be contained in the Circular,

but the Board, who have been so advised by its advisers, feels that the proposal is both fair and reasonable as far as shareholders

are concerned and incentivises the Manager to undertake the winding up process efficiently and in a way that optimises value

and decreases risk for shareholders.

THE COMPANY’S IMPACT

The Investment Manager continues to operate and invest responsibly, ethically, and fairly, and the Board remains committed to

reviewing the Investment Manager’s Environmental, Social and Governance (“ESG”) policy. If during the course of an investment,

VPC becomes aware of any material ESG risks, such ESG risks are documented in an Investment Committee memorandum and

presented to the Investment Committee for review. VPC develops an action plan to address such risks as applicable. In addition,

the Investment Manager continues to be a signatory of the United Nations Principles for Responsible Investment (“PRI”), the

leading global network for investors committed to integrating ESG considerations into long-term investment decision-making.

OPERATIONAL RESILIENCE

There were a few consistent themes observed across the broader market throughout 2022: asset backed security spreads

widened, both interest rates and inflation rose, equity markets were volatile, and there were lower transaction volumes for new

capital raising. In the financial technology sector, the theme was a strong shift of investor interest and valuation from growth to

profitability. To that end, many Portfolio Companies that overbuilt for growth in 2021 have enacted varying degrees of

headcount reductions and other cost-cutting initiatives. The Board is aware that such cost-cutting initiatives can introduce

elements of operational risk for the portfolio companies and this is being closely watched.

The Board believes risk management will remain a critical function throughout the wind-down process. The Investment Manager

is committed to promoting a culture of proactive risk management and controls across its portfolio of investments. VPC has itself

developed a culture of risk management. A team of 20 Risk and Operations professionals assess and monitor Portfolio Companies

and related activities on a daily, weekly, or monthly basis using proprietary, technology-driven analytic tools. VPC’s combination

of deep credit and structuring expertise, the ability to navigate uncertain market conditions, and an adherence to consistent risk

management will assist the Investment Manager to stay disciplined during the proposed wind-down process.

OUTLOOK

At the time of writing, fears of a U.S. recession and the COVID-19 global pandemic have somewhat abated, and there are

encouraging signs that any recession may be mild. The Investment Manager expects modest origination activity may persist

through much of 2023 and mergers will continue to gain popularity across the e-commerce space. VPC and its Portfolio

Companies remain focused on mitigating external credit risks and managing downside protection in legacy assets. More details

on the outlook for the Company can be found on page 17 of the Investment Manager’s Report.

In the wake of the collapse of SVB, the Board expects that there will be many lessons learned in the market served by SVB. The

Investment Manger will continue to employ prudent risk management practices and encourage its portfolio managers to be

thoughtful about their risk exposure.

Finally, the Board wants to thank all Shareholders for their continued support as it works towards a successful wind-down of the

Company. We will update you on our progress in our monthly reports.

Graeme Proudfoot

Chair

27 April 2023

STRATEGIC REPORT continued

VPC SPECIALTY LENDING INVESTMENTS PLC

10 ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

INVESTMENT MANAGER’S REPORT

ABOUT VPC

The Company’s investment manager is Victory Park Capital Advisors, LLC (“VPC”, the “Firm”, or the “Investment Manager”), an

SEC-registered, established private capital manager. The Investment Manager was founded in 2007 and is headquartered in

Chicago, Illinois, with additional resources in New York, Los Angeles, San Francisco, and London. VPC provides custom financing

solutions across the private capital spectrum, focusing on asset-rich companies with significant corporate governance and a

strong growth trajectory. VPC invests in both emerging and established businesses across various industries in the U.S. and

abroad that often cannot access traditional sources of capital.

As of 31 December 2022, the Investment Manager had invested approximately $9.1 billion across more than 200 investments

since inception. Additionally, throughout its history, VPC has developed a significant culture of risk management. A team of

20 Risk & Operations professionals proactively assess and monitor Portfolio Companies and related activities on a daily, weekly,

or monthly basis using proprietary, technology-driven analytic tools. Further, while investment returns are important, VPC places

great significance on the <1%

cumulative principal loss since inception. VPC believes strong return and risk metrics result from

a combination of deep credit and structuring expertise, the ability to navigate uncertain market conditions, and a significant

adherence to risk management.

The Investment Manager was founded by Richard Levy and Brendan Carroll, who have worked together for more than

two decades across multiple credit cycles and market environments. As of December 31, 2022, VPC employs 53 professionals

across its Investment, Risk & Operations, Legal, and Investor Relations teams. For more information, please visit

www.victoryparkcapital.com.

Established Credit Manager

 Founded prior to the global financial crisis in 2007 by Richard Levy and Brendan Carroll

 VPC has long-standing experience investing opportunistically amidst volatility and market complexities

 Headquartered in Chicago with resources in New York, Los Angeles, San Francisco, and London

 Investment Manager of the Company since its IPO in 2015

Private Credit Solutions

 Private credit specialist with a focus on capital preservation across multiple market environments

 Lender to both established and emerging businesses across various industries in the U.S. and abroad

 Extensive experience lending to companies across the credit spectrum

Developed Risk Management Culture & Process

 Deeply embedded risk culture

 VPC leverages proprietary risk tools and analytics to drive underwriting and portfolio management decisions

 Customised monitoring and reporting process allows for granular analysis across multiple dimensions

STRATEGY AND BUSINESS MODEL

Protective Deal Structuring

The Company’s investments are typically structured as delayed draw, floating rate, and senior-secured term loans with significant

credit enhancements. Portfolio Companies draw capital over time, subject to availability under their borrowing base, covenant

compliance and underlying collateral performance. Utilising this structure provides added transparency into capital deployment

as Portfolio Companies provide notice to VPC of present and expected future funding requests on the debt facilities. In addition,

given the delayed draw structure, the at-risk capital on day one is typically not fully funded and grows over the life of an

investment. VPC is able to monitor performance and become more familiar with the business and collateral prior to lending

Loss Ratio reflects the cumulative net principal loss over the full life of each investment as a percentage of cumulative gross invested capital for the VPC

Credit Strategies. VPC’s historical track record data is tracked based on net loss rather than default and recovery ratios. VPC requires an executed NDA

before further sharing additional information around potential defaults and recoveries, as well as historical examples of investments where a workout or

liquidation was warranted. As mentioned above, VPC’s historical loss ratio is minimal, at less than 1.00% since 2007.

VPC SPECIALTY LENDING INVESTMENTS PLC

additional capital. Structuring floating-rate loans has allowed VPC to benefit from the meaningful increase in spread as rates have

risen in recent quarters. Additionally, VPC is predominantly the agent and sole lender in the transaction. Alternatively, in a

syndicated transaction, there may be misalignment among lenders due to varying interests, leading to an inability to manage

risk appropriately. As the agent and sole lender, VPC can better maximise value for Shareholders. Lastly, VPC’s loans are typically

shorter in duration (two to five years), which is generally attractive for borrowers looking for near-term solutions and beneficial

for VPC to mitigate risk further.

As one of the pioneers of financial services lending, VPC has structuring expertise and long-standing industry relationships,

enabling it to secure preferential capacity to lock up attractive, long-term economics through structured facility upsizes with

meaningful over-collateralisation. VPC lends against a narrowly defined and dynamic collateral pool, which reduces adverse

selection risk. Collateral is tested regularly to help avoid deterioration of the collateralised assets. If needed, VPC can foreclose

on collateral and control the liquidation of assets to protect its investments and minimise losses. With the collateralised nature

of the underlying investments within the Company’s portfolio, under most scenarios, even with a default on the instrument, the

Company would expect to recover most or all the investment. This robust structuring, monitoring and collateralisation has

allowed the Company to minimise credit losses and record minimal expected credit losses as required by IFRS 9.

VPC’s investments typically also include meaningful credit enhancements including first loss equity subordination, robust

covenant packages, extensive reporting requirements and monitoring, corporate guarantees, first lien priority, and transparency

and control over cash. VPC is able to ‘control cash’ by ring-fencing the collateral in a blocked account or special purpose vehicle

(“SPV”). VPC also structures a right of first refusal (“ROFR”) for most credit investments, allowing for control of the refinancing

processes and ultimately creating an additional captive sourcing funnel for the investment portfolio. Lastly, VPC’s loans are

secured against liens and equity pledges on the corporate entity or collateral, further providing multiple avenues of structural

protection. VPC is further able to support the growth of its Portfolio Companies, as it has the flexibility to invest with small and

large Portfolio Companies alike and to continue to finance a Portfolio Company as it grows in size. Each additional draw request

from a Portfolio Company requires an Investment Committee meeting, where the Investment Team is responsible for presenting

a detailed update on the Portfolio Company and the rationale behind the funding before it is approved. As in all transactions,

unanimous consent from the Investment Committee must be given prior to any new funding being released. VPC believes this

feature uniquely positions the Firm to grow alongside its Portfolio Companies and effectively mitigates risk as fundings are

thoughtfully paced out in line with performance.

* For illustrative purposes only, actual investments may differ due to individual circumstances.

Normal Scenario

VPC Collateral Coverage

(Stressed Liquidation Value)*

15%-30%

Overcollateralisation

10%-15%

Overcollateralisation

First Loss Equity Cushion

first economic loss if underlying

asset loses value

First Loss Equity Cushion

Excess Cash Flow (Income)

extra cash held by company

after financial obligations

Excess Cash Flow (Income)

Extra Asset Value

(“Boot” Collateral)

cash/property added

VPC Debt

(Structrured as a % of

Asset Value)

Extra Asset Value

(“Boot” Collateral)

VPC Debt

(Structrured as a % of

Asset Value)

STRATEGIC REPORT continued

VPC SPECIALTY LENDING INVESTMENTS PLC

12 ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

Highly Selective Deal Sourcing

VPC has a cultivated sourcing network powered by investment professionals across the U.S. and London, creating a wide funnel

of investment opportunities. Additionally, VPC has a local presence in five major cities in the U.S. and U.K., providing real-time

“boots on the ground” for investment opportunities. The Investment Manager leverages an internal database to target attractive

businesses and undertakes extensive outreach with management teams to diligence new investment opportunities. The network

includes investment banks, business brokers, restructuring firms, private equity managers, venture capital firms, and law and

accounting firms. Furthermore, VPC has long-standing relationships with Portfolio Company management teams, industry

professionals, and experts in various sectors that bolster its access to transactions. When positioned as a premier financing

solution, the Investment Manager’s executive board adds credibility and further provides VPC with a differentiated sourcing

channel. Together, these efforts result in a robust pipeline of new investment opportunities built through trusted relationships,

industry knowledge, and reliable partnerships.

More than 80% of the Firm’s deal flow is sourced directly. This highlights the strength of VCP’s relationships and its reputation

as a flexible financing solutions provider. Notably, VPC only invests in approximately 1% of its deal flow which exemplifies its

high barrier to entry.

As of 31 December 2022. Sourcing channels for investments included in the VPC ABOC Credit Strategy composite.

As of 6 March 2023.

Best-in-Class Risk Management

VPC’s significant emphasis on risk management is the backbone of its investing ethos. As discussed above, VPC has 20 dedicated

Risk & Operations professionals that proactively monitor Portfolio Companies daily, weekly, or monthly, utilising sophisticated,

technology-driven analytics tools. VPC leverages iLevel and Tableau, which have been customised for VPC’s high-touch approach

to risk management, to enhance further its ability to assess, manage and monitor risk and trends on a real-time basis.

At VPC, risk management is closely involved throughout the life cycle of an investment, from underwriting and structuring to

monitoring and, ultimately, maturity. VPC has a well-established Risk Team, which is an objective, independent function that

reports directly to the Investment Committee. The Senior Risk Team meets with the Executive Team twice-weekly to discuss any

material risk issues and key initiatives. More broadly, the Investment Committee meets two to three times a week to collectively

address and manage potential risks as appropriate. Additionally, the Risk Team will often travel on-site to meet with Portfolio

Companies throughout the duration of the investment to ensure key metrics are being met and collateral performance is in line

with expectations.

LEVERAGING THE VPC PLATFORM

 Long-standing relationships with portfolio company management teams,

industry professionals and experts create a differentiated deal pipeline

 Relationships are a critical advantage in sourcing deals and securing preferential

capacity in a portfolio company’s development

PROPRIETARY ADVANTAGE

 “Boots on the ground” in six major cities provides the VPC with a wide funnel

of investment opportunities

 Extensive reach with active engagement of management teams and diligence

opportunities

 Robust sourcing and direct origination allow VPC to primarily act as the

sole lender for non-sponsored and non-syndicated investments

DIVERSIFIED CHANNELS

 Pipeline built through trusted and often repeat relationships, industry

knowledge and value-added structuring capabilities

 Leverages a diverse database to directly target businesses that combine

VPC’s underwriting expertise with its thematic industry subsector views

 Potential sourcing avenues include direct relationships with portfolio companies,

venture capital and private equity firms, investment banks, fixed income,

structured product desks, restructuring advisors and traditional lenders

Equity

Owner

10%

Intermediary

18%

Direct

72%

VSL CREDIT STRATEGY – SOURCING CHANNELS

Currently, VPC has more than $3.5 billion of investment

opportunities in its active pipeline across the

firm’s strategies2

VPC SPECIALTY LENDING INVESTMENTS PLC

To bolster VPC’s risk management efforts further, reputable third-party consultants may be used to assess specific, industry-

related risks. Industry publications such as 2nd Order Solutions white papers are regularly reviewed for broader credit market

trends that may influence VPC’s investments. As a result of this best-in-class adherence to risk, VPC is proud to report a

cumulative net principal loss of less than 1% since inception. After considering any post-default recoveries, the less than 1% net

loss

represents the net principal shortfall on both completed and active investments. VPC places great significance on its

institutional infrastructure and risk management process to structure, execute, monitor, and manage risk within the portfolio.

REVIEW OF 2022 PERFORMANCE

The Company completed the year with a total NAV return of –6.97%, a gross revenue return of 12.63% and a gross capital return

of –15.13%. The Company’s revenue return remained in line with expectations, thereby supporting the 8.00p per year dividend

yield for Shareholders as set out in the IPO Prospectus (“the Target Dividend”). In February 2023, the Company declared its

twentieth consecutive quarterly dividend payment of 2.00p per share for the three months to 31 December 2022, and the

dividend was paid to Shareholders in March 2023. During the year, the weighted average coupon on the Company’s asset backed

investments increased to 14.65% at 31 December 2022 from 10.41%.

2022 was characterised by economic and geopolitical turbulence and uncertainty, including fears surrounding the COVID-19

global pandemic, Russia’s invasion of Ukraine, and central banks’ attempts to counter rising inflation with interest rate hikes. For

example, in January 2022, the Fed Funds rate was 0%-0.25%. By the end of the year, after seven rate increases from the

US Federal Reserve, it stood at 4.25%-4.5%, its highest level in 15 years, with the promise of further hikes in 2023.

Despite economic and geopolitical turbulence and uncertainty, the Company’s core loan business continued to perform in line

with expectations, benefiting from the rising short-term interest rate environment throughout 2022 and further illustrating the

power of variable rate loans. The Company’s core asset backed lending business represented approximately 67% of the total

investment portfolio at year-end and continued to perform in line with expectations.

ACTIVE

MANAGEMENT

STRUCTURAL PROTECTIONS

INFORMATION

TRANSPARENCY

 Dedicated Risk Management team works

collaboratively with VPC deal teams

throughout the life of an investment

 Risk Management team reports to VPC’s

Investment committee to preserve

independence

 Frequent touch points with portfolio

companies and with internal stakeholders

to manage downside protection

 VPC requires and contractually mandates

detailed transparency into all aspects

of the portfolio companies’ business and

collateral on a regular basis

 Requirements include data sharing,

detailed reporting, and access to

management and directors

 Rigorous portfolio and asset-level

analytics drive disciplined decision

making

 Credit investments are structured with first loss cushion as portfolio companies generally contribute the equity tranche, which aligns

incentives with management and equity investors

 Investments are typically structured as short duration senior-secured, delayed draw term loans to an SPV that fund over time based on

performance of the underlying collateral

 Lends against a narrowly defined and dynamic collateral pool, which is intended to reduce the probability of loss

 Ability to foreclose on collateral and control the liquidation of assets to protect its investments

RISK

CULTURE

Loss Ratio reflects the cumulative net principal loss over the full life of each investment as a percentage of cumulate gross invested capital for the

VPC Credit Strategies. VPC’s historical track record data is tracked based on net loss rather than default and recovery ratios. VPC requires an

executed NDA before further sharing additional information around potential defaults and recoveries, as well as historical examples of investments

where a workout or liquidation was warranted. As mentioned above, VPC’s historical loss ratio is minimal, at less than 1.00% since 2007. For active

investments, any unrealised value is determined based on the fair market value of the outstanding investment.

STRATEGIC REPORT continued

VPC SPECIALTY LENDING INVESTMENTS PLC

14 ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

The Company’s equity interests derive from its core lending business and provide it with equity participation without

contributing equity risk capital. The mark down of equity prices during the year, specifically within the financial technology and

e-commerce sectors, impacted the value of the Company’s equity holdings and contributed to the negative total NAV return.

Unrealised losses were also driven by the decrease in value of the Company’s holdings in publicly traded investments. However,

the unrealised losses on investments were due to Company investments being marked to publicly-traded prices, driven generally

by the weaker market environment, rather than specific issues with underlying Portfolio Companies. Therefore, VPC does not

view these mark downs as an indicator of concern to the underlying Portfolio Companies and are confident the lending to these

businesses remains well secured.

VPC’s long-standing reputation and relationships with Portfolio Company management teams, industry professionals and experts

continued to facilitate a differentiated deal pipeline. The Company was able to take advantage of market dislocation and closed

four new asset backed investments during the year on attractive terms, which may not have been available to VPC in prior

periods.

Overall, 2022 demonstrated the merit of VPC’s approach to structured credit lending to technology-enabled businesses and a

strong culture of risk management, which has proven particularly important during a volatile year. VPC has made additional

investments in human capital throughout the year as it continues to grow, hiring 18 individuals across its front office, Operations,

and Investor Relations teams, a testament to VPC’s growth ambitions, its reputation, and standing within the investment

management industry.

COMPANY PERFORMANCE

Below is a breakout of the Company’s returns as a percentage of NAV and pence per share on the weighted average shares

outstanding in 2022.

1 January 2022 to 31 December 2022 Total Return (% of NAV)

1 January 2022 to 31 December 2022 Total Return (pence per share)

–4.00%

1.92%

–10.00%

–5.00%

0.00%

5.00%

10.00%

15.00%

Asset Backed

Investment

Revenue

Returns

Operating

Expenses and

Management

Fees

Performance

Fees

Equity

Investment

Capital Returns

Equity

Investment

Revenue

Returns

Finance CostsAsset Backed

Investment

Capital Returns

Total

Return

F/X and Other

Returns

13.03%

10.70%

–6.97%

–4.00%

1.92%

–11.14%

–1.86%

–1.98%

–0.63%

0.00%

-4.00%

1.92%

–10.00p

–5.00p

0.00p

5.00p

10.00p

15.00p

20.00p

Asset Backed

Investment

Revenue

Returns

Operating

Expenses and

Management

Fees

Performance

Fees

Equity

Investment

Capital Returns

Equity

Investment

Revenue

Returns

Finance CostsAsset Backed

Investment

Capital Returns

Total

Return

F/X and Other

Returns

12.22p

–7.95p

–4.56p

2.20p

–12.71p

–2.12p

–2.26p

–0.71p

0.00p

VPC SPECIALTY LENDING INVESTMENTS PLC

INVESTMENTS

To meet the Company’s investment objectives within pre-defined portfolio limits, capital was allocated across several Portfolio

Companies, focusing on portfolio-level diversification. As of 31 December 2022, the Company’s investments were diversified

across 48 different Portfolio Companies across the U.S., UK, Europe, Australia, Asia, and Latin America and the Company had

exposure to 24 Portfolio Companies through asset backed loans.

VPC believes that its short-duration, non-correlated asset-intensive investments provide insulation across volatile environments,

particularly during times of uncertainty (e.g., the Great Financial Crisis, ongoing impacts from the COVID-19 pandemic, etc.), and

the Firm is equipped with an institutional risk infrastructure and independent risk management process focused on downside

protection. Conversely and more prominently, the equity portfolio experienced continued unrealised negative returns, generally

driven by the normalisation of equity instrument returns, ongoing volatile market conditions, and lower recent equity raises by

comparable companies within the financial technology and e-commerce sectors. Lastly, unrealised losses were driven by the

decrease in value of the Company’s publicly traded investments.

Portfolio Composition as at 31 December 2022

The Company continued to implement the strategy of deploying capital across a broad range of Portfolio Companies with

diverse geographies, borrower types and credit quality. Below are the breakouts of the Company’s portfolio composition as of

31 December 2022:

Gross Asset Investment Exposure, Investment Exposure

Allocation

by Sector

Geography

GEARING AND CAPITAL MARKETS

The Company selectively employs gearing to enhance returns generated by the underlying credit assets. Gearing is structured

to limit the borrowings to individual SPVs holding the assets to ensure the gearing providers have no recourse to the Company.

Given the breadth of VPC’s portfolio, the Company has a distinct competitive advantage in securing these gearing facilities at

attractive rates. During the year, the Look-Through Gearing Ratio remained relatively consistent. Having started the year at 0.34x,

it ended the year at 0.35x, as VPC continued to take a conservative approach to liquidity and risk management with the gearing

facilities.

The Company’s level of gearing may increase as a result of further drawdowns to honour commitments to funds under existing

contractual arrangements, revaluations of the portfolio or realisation of assets at less than their carrying value. An increased level

of gearing would increase Shareholders’ exposure to realisation values.

ESG INVESTMENT CONSIDERATIONS

VPC has a long history of commitment to Environmental, Social and Governance (“ESG”) considerations as part of its investment

process and firm-wide operations. In 2018, VPC launched a partnership with the International Finance Corporation (“IFC”), the

private sector arm of the World Bank, to provide credit to businesses in emerging markets. Since the initial policy in 2018, the

policy and processes around how VPC integrates ESG into its investment strategies and firm operations have expanded in scope

and sophistication.

United

States

67%

Europe

13%

Asia

Latin

merica

14%

Legal

Finance

E-Commerce

26%

SPAC

Fintech

66%

Preferred

Stock

14%

Debt

67%

Warrant

Cash

Convertible

Debt

Common

Stock

Percentages calculated on a look-through basis to the Company’s investee entities and SPVs.

Calculations using gross asset exposure and not reduced for gearing. Excludes cash.

STRATEGIC REPORT continued

VPC SPECIALTY LENDING INVESTMENTS PLC

16 ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

VPC’s ESG policy is considered in all investment decisions. Part of the policy involves clearly defining what the Company will and

will not invest in, as specific industries and business practices are not supported. Another important piece of the ESG programme

involves understanding the risks and potential risks related to ESG and identifying, mitigating and remediating any issues.

Perhaps most importantly, the ESG policy creates accountability throughout the organisation and across Portfolio Companies.

VPC approaches ESG holistically to understand the full range of potential ESG risks for any given investment. For each investment

underwritten, the applicable ESG factors are identified and mapped out with a due diligence plan to understand the relevant

risks and mitigants related to those factors. With fintech investments, the Investment Manager focuses on the “Social” aspects of

ESG, as those typically have the most significant overall impact on the business. VPC looks to invest in fintech companies that

support financial inclusion and positively impact customers and other stakeholders. That means having products that are

transparent and structured in a way that is fair to customers and promotes financial health. It also means having proper controls

and systems to safeguard against harmful tactics or business practices.

As VPC has expanded into new investment categories, this frequently means re-evaluating ESG factors and risks in those specific

areas. It is VPC’s responsibility to educate itself about the key issues relating to any potential investment. VPC must set

appropriate standards in these areas and discuss issues with all relevant partners.

As part of VPC’s standard risk management process, it actively monitors Portfolio Companies across all dimensions, including ESG.

It has frequent touchpoints with Portfolio Companies and receives extensive reporting to identify potential issues. It also holds

weekly Investment Committee meetings to discuss any potential concerns and how to address or remediate them. Equally

important, VPC regularly engages with Portfolio Companies to understand how they are thinking about ESG-related issues and

to share best practices. Given that VPC works with many early-stage, high growth companies, it aims to act as a resource to

Portfolio Companies as they grow and develop their ESG practices over time.

In August 2021, VPC announced it had become a signatory of the United Nations-supported Principles for Responsible

Investment (“PRI”), further demonstrating its commitment to integrating ESG considerations into its investment decision making

processes. PRI is the pre-eminent institution advocating for ESG issues to be at the forefront of investment decision making and

VPC is proud to be a signatory. This demonstrates that VPC takes its responsibility to drive positive impact, both within the

financial services industry and in society, very seriously and that it is committed to responsible investing for the long term.

Lastly, the Investment Manager is committed to maintaining a culture of good governance, as well as policies and procedures

to assist with all aspects of diversity, as the Company’s activities benefit from a wide range of skills, knowledge, experience,

backgrounds, and perspectives. VPC formally published its DEI Policy in October 2021 and prioritised Diversity, Equity and

Inclusion (DEI) goals for recruitment in Q3 of 2021 to diversify points of view and idea generation. To this end, VPC set formal

goals of increasing the female population by 20% and ethnic diversity by 200% within the next five years. To date, VPC has

exceeded those goals by increasing the female and ethnically diverse population by 64% and 500%, respectively.

SUMMARY AND HIGHLIGHTS FOR THE YEAR

The financial and business highlights for the year ended 31 December 2022 are as follows:

 January 2022: Dave Inc., a banking app on a mission to build products that level the financial playing field reported the

closing of its previously announced business combination with VPC Impact Acquisition Holdings III, Inc. On 5 January 2022,

the combined company began trading under the NASDAQ ticker symbol: “DAVE”.

 January 2022: The Company partially exited its equity investment in Kueski, Inc., realising a gain on the sale of

$4.37 million, which was included in the NAV of the Company on 31 December 2021.

 January 2022: On 17 January 2022, one of the Company’s privately held investments, Beforepay, closed its IPO and began

trading on the Australian Stock Exchange under the ticker “B4P”.

 February 2022: The Company declared its 16th consecutive dividend of 2.00 pence per share for the three months to

31 December 2021.

 March 2022: VPC Impact Acquisition Holdings II (NASDAQ: VPCB) (“VPCB”), a special purpose acquisition company

sponsored by VPC Impact Acquisition Holdings Sponsor II, LLC, an affiliate of Victory Park Capital and FinAccel, the parent

company of Kredivo, the leading AI-enabled digital consumer credit platform in Southeast Asia, announced the mutual

termination of their previously announced business combination agreement.

 June 2022: The Company declared its 17th consecutive dividend of 2.00p per share for the three months to 31 March

2022.

 July 2022: The Company invested in one new asset backed investment, Loyal Foundry Holdings, Inc. (“Loyal Foundry”).

Loyal Foundry is a leading global platform of non-gaming mobile apps.

VPC SPECIALTY LENDING INVESTMENTS PLC

 August 2022: ZeroFox Inc., a VPC portfolio company and an enterprise software-as-a-service leader in external

cybersecurity reported the closing of its previously announced business combination with L&F Acquisition Corp (“L&F”), a

special purpose acquisition company, and ID Experts Holdings Inc. (“IDX”). On 4 August 2022, the combined company

began trading under the NASDAQ ticker symbol: “ZFOX”.

 August 2022: The Company declared its 18th consecutive dividend of 2.00p per share for the three months to 30 June

2022.

 November 2022: The Company declared its 19th consecutive dividend of 2.00p per share for the three months to

30 September 2022.

 December 2022: After further consultation with its major Shareholders, the Board determined that it would be in the

Company’s best interests and Shareholders to put forward formal proposals to Shareholders for a managed wind-down of

the Company instead of the 25% Exit Opportunity. A circular with further details will be published shortly.

SUBSEQUENT EVENTS

Since the year ended 31 December 2022:

 February 2023: The Company declared its 20th consecutive dividend of 2.00p per share for the three months to

31 December 2022.

OUTLOOK

As noted above, the Company completed the year with a total NAV return of -6.97%, a gross revenue return of 12.63% and a

gross capital return of –15.13%. It was a bifurcated year regarding investment performance, with credit performance remaining

resilient. Importantly, the Company’s revenue return remained in line with expectations, thereby supporting the dividend yield

for Shareholders.

Many of the Investment Manager’s peers and Portfolio Companies have not seen interest rates at these levels before, and rates

are expected to continue trending up from here. In 2023, VPC expects equity valuations will be flat or down, an environment

that encourages companies to be measured on valuation expectations. As such, Portfolio Companies are de-prioritising growth

and instead working to reduce operating expenses to extend cash runway and/or generate free cash flow.

In specific credit market sectors in which the Company is invested, the Investment Manager market and risk commentary is as

follows:

 Consumer: In the consumer space, consumer credit has exhibited signs of softening across multiple asset classes; however,

metrics remain largely within historical norms and mirror those of 2019. Inflation continues to be a primary driver of

pressure on consumers, particularly those in the lower income brackets. The Investment Manager is starting to see early

indications of cracks in the strong employment and some segments of the economy are showing more significant

weakness, such as subprime and lower income bands and certain geographic regions.

 E-Commerce: In E-Commerce, while many of the supply chain challenges from early 2022 have eased, inflation and rising

rates has put pressure on margins. Additionally, many retail and e-commerce companies are facing inventory challenges.

Generally, higher prices are not fully offsetting the pressure on margins and reductions in force have been commonplace

as E-Commerce growth normalises to more historic run-rate levels.

In response to the market outlook, VPC and its Portfolio Companies remain focused on mitigating exogenous credit risks and

managing downside protection in legacy assets. As noted above, VPC believes that its short-duration, non-correlated

asset-intensive investments provide insulation across volatile environments, particularly during times of uncertainty, and the Firm

is equipped with an institutional risk infrastructure and independent risk management process focused on downside protection.

The Investment Manager will look to manage the wind-down effectively with the near-term goal to maintain the Company’s

dividend target, and to manage the portfolio in accordance with VPC’s institutionalised policies and procedures and towards

maximising returns to shareholders.

Victory Park Capital Advisors, LLC

Investment Manager

27 April 2023

STRATEGIC REPORT continued

VPC SPECIALTY LENDING INVESTMENTS PLC

18 ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

BUSINESS MODEL

COMPANY STATUS

The Company is registered as a public limited company under the Companies Act 2006 and is an investment company under

Section 833 of the Companies Act 2006. It is a member of the Association of Investment Companies (“AIC”).

The Company was incorporated on 12 January 2015 and commenced its operations on 17 March 2015.

The Company has been approved as an investment trust under Sections 1158/1159 of the Corporation Tax Act 2010. The

Directors are of the opinion, under advice, that the Company continues to conduct its affairs as an Approved Investment Trust

under the Investment Trust (Approved Company) (Tax) Regulations 2011.

Under the Investment Management Agreement (“IMA”) dated 26 February 2015 between the Company and the Investment

Manager, the Investment Manager is appointed to act as investment manager and Alternative Investment Fund Manager (“AIFM”)

of the Company with responsibility for portfolio management and risk management of the Company’s investments.

PURPOSE

The Company’s defined purpose is to deliver its Investment Objective. Board culture promotes strong governance and long-term

investment, mindful of the interests of all stakeholders. The Board believes that, as an investment company with no employees,

this is best achieved by working in partnership with its appointed Investment Manager.

INVESTMENT OBJECTIVE