Strategy
A Strategic Approach to Investing
We take your expected outcomes and turn them into a strategy that performs.
The Pathway to Success
At Credit Connect we specialize in providing investors with
opportunities to participate in the mortgage market through our innovative Credit
Connect Secure Income Fund. Our fund is designed to offer attractive
risk-adjusted returns while prioritising a capital stable investment through
diversification and risk management.
The Core of Our Strategy
At the core of our strategy lies a prudent approach to mortgage investments. We focus on originating and acquiring first mortgages on real estate with strong underlying fundamentals. Our team will meticulously evaluate each potential investment, considering factors such as borrower creditworthiness, property valuation, and market conditions. By adhering to strict standards and conducting thorough due diligence, we aim to build a portfolio of mortgages that generates consistent income while minimizing downside risk. Our proprietary analytics combined with external credit scoring underpins our filtering process.
Investment Returns
The
Fund seeks a targeted annual return, net of fees and expenses, of between 9.00% and 9.50%. By making use of the resources, we have available, the Fund's cash can be held
at targeted levels without reducing investment returns. The Select mortgage fund's
target returns have been achieved without any impairments or
capital losses. Our targeted return for the fund is not a forecast and may not be achieved.
Income Source
First mortgage security that provides consistent investment distributions is in line with a strict credit approval procedure and suitably priced interest rates.
Network
The aim of the Fund is to invest in a national portfolio of
loans in Australia, offering diversification based on borrower, market region,
asset type, class, and timing of entry. In addition to having a strong,
committed staff, Credit Connect offers a
nationwide network of brokers who offer a steady stream of new loans for
credit evaluation. Credit Connect also directly employs a strong resolute team of
Business Development Managers.
Investment Approach
To seize this substantial and ever-changing opportunity set, Credit Connect has focused on developing an investment approach that is both highly scalable and repeatable. We have regularly met our clients' expectations through the methodical application of our investment strategy across a range of financial market conditions and economic cycles, including times of extreme market stress. Whereas many concentrate on chasing higher returns, regardless of the state of the market, our goal is to consistently produce volatility-controlled returns that carefully limit performance volatility and prioritise managing risk. The Fund aims to target consistent low volatility returns by using Credit Connect's specialised and highly distinctive investment technique.
Strategy:
Risk Management
Effective risk management is paramount to our investment philosophy. We employ a comprehensive risk management framework that encompasses both quantitative analysis and qualitative judgment. Our team actively monitors various risk factors, including interest rate risk, credit risk, and market liquidity. By implementing rigorous stress testing and scenario analysis, we strive to identify and mitigate potential risks before they materialize. Additionally, we maintain a conservative loan-to-value ratio and prioritize investments in regions with stable real estate markets, further safeguarding our portfolio against adverse events.
We take a methodical and highly intuitive approach when measuring and managing risk. We believe that risks within a portfolio should be transparent to both the investment managers and clients. There should also be no performance surprises regardless of market events.
We have a comprehensive risk framework, within which the
optimal portfolio is constructed. This framework makes certain that the risks
taken within the portfolio are in line with our current views fully disclosed to our investors and ensures accountability for our return
enhancement strategies.
Strategy:
Diversification
Diversification is a cornerstone of our investment approach. We believe in spreading risk across a broad spectrum of mortgage assets, including residential mortgages, commercial mortgages, and multifamily properties. Our diversified portfolio reduces concentration risk and enhances resilience against market volatility. Furthermore, we carefully balance the mix of fixed-rate and adjustable-rate mortgages to mitigate interest rate risk and capitalize on opportunities in different market environments. By maintaining a well-diversified portfolio, we aim to enhance long-term returns while minimizing overall portfolio volatility.
Strategy:
Risk-Adjusted Returns
At Credit Connect, we prioritize delivering superior risk-adjusted returns to our investors. By combining a disciplined investment process with prudent risk management and diversification strategies, we seek to generate consistent income over the investment horizon. Our commitment to minimising downside risk ensures that investors can achieve attractive returns without exposing themselves to undue volatility. Moreover, we provide transparency and regular reporting to keep our investors informed about the performance of the fund and the underlying mortgage assets.
Invest with Confidence
With Credit Connect Secure Income Fund, investors can access
the lucrative opportunities presented by the mortgage market while benefiting
from our expertise in risk management and portfolio construction. Whether
you're seeking stable income, capital protection or portfolio diversification, our
fund offers a compelling solution tailored to your investment objectives.
Low Risk
Under 65% LVRs, cross-collateralized against other assets,
and backed by directors' or individuals' personal guarantees, which further
mitigates default recovery and downside risk in deteriorating markets. Since
its founding, there has never been a capital loss or impairment for the Fund.
Loan Liquidity
Concentrating on loans with a short duration. Borrowers that usually have a bridging strategy with refinance by mainstream Lenders. Sale of the underlying property to a property trust.
Investor
Liquidity
The
fund offers predefined liquidity windows semi-annually for redemptions. Redemptions on an ad hoc basis can be accommodated
under certain circumstances. However, like
all non-liquid funds, all redemptions are at the discretion of the Responsible Entity.
There is no certainty that investors will be able to withdraw the amount requested.
Co-Investment
The Manager is also invested in the Fund. Our co-investment ensures that our focus is
on not only making good returns but also minimising downside risk.
First Loss Protection
We have put in place a “first loss" protection for investors. The Manager has committed to credit enhance the fund by ensuring that the investors do not bear the first 10% of capital losses of the fund due to binding agreements to subordinate the equivalent amount of units in the fund to offset the first 10% loss of capital in the fund before investors capital is diminished.
Ready to Explore?
Contact us today to learn more about the Credit Connect Secure Income Fund or request a Product Disclosure Statement for the Fund and see how you can become a part of our investor community.