Investors seeking reliable income and exposure to the Australian property lending market may find value in structured mortgage investment funds. One such opportunity is TierONE Capital’s 12 Month Term Income Investment (Investment), which is designed to provide consistent income through diversified mortgage lending across Australia.
This Investment presents investors with a structured opportunity to generate regular interest income through exposure to Australian mortgage-backed assets, cash, and cash styled products, that is designed to deliver stable returns whilst maintaining a disciplined risk management framework and investment mandate.
A key feature of this Investment is its target return, set at the Official Cash Rate (OCR) plus 3.8% per annum. At the time of publishing, this equates to a return of 7.90% p.a., based on an OCR of 4.10% p.a. Returns are variable and reviewed at least monthly, ensuring alignment with broader economic conditions. Investors receive distributions calculated daily and paid monthly in arrears, providing a steady income stream.
The Investment term is fixed for 12 months, with automatic reinvestment unless investors choose to redeem their investment at the end of the term. This structure offers a short-medium term commitment while still offering a degree of planning flexibility. Importantly, there are no entry or exit fees, making the Investment cost-efficient.
For this Investment, TierONE Capital employs a strategy that focuses primarily on mortgage loans originated by our team and secured by Australian real estate. Our approach targets between 80% and 100% of funds under management being allocated to mortgage investments, with up to 20% held in cash or cash styled products. These mortgage investments are diversified across property types, including commercial, residential, and industrial assets, as well as land. In addition, prudent lending standards, such as a target loan-to-value ratio of 65% help to mitigate risk.
Further diversification is achieved by limiting exposure to individual borrowers, with a target of up to 20% of funds under management allocated to a single borrower. This, along with a target of up to 50% of the portfolio invested in development and construction loans, means higher-yield opportunities are balanced with stringent risk controls. All investments are confined to Australia, ensuring geographic consistency and familiarity.
Overall, the 12 Month Term Income Investment is designed for investors seeking regular income with exposure to real estate-backed lending. Its combination of monthly distributions, disciplined investment strategy, and layered governance makes it an appealing option for those looking to diversify their investment portfolio within a managed fund structure and minimise lag time between investments.
As with any investment, potential investors should carefully consider the associated risks and review all relevant documentation before committing to invest. Contact our Investment Services team to learn more investments@tieronecapital.com.au or 1800 287 346, or register to become an investor here.
Comments are closed.
