Conrad Funds Management Limited (CFML) is a New Zealand-based boutique fund manager that’s unveiling its innovative take on liquidity.
It’s teamed up with Syndex, a fintech company providing an online exchange for private market investments in proportionally-owned assets. Syndex provide a secondary market precisely to address the common complaint of illiquidity in the private markets.
CFML was initially focused on providing the wholesale investment market with access to variable interest financial products (pooled investments in mortgages and fixed income investments) via its wholesale mortgage fund. CFML has now released its retail CFML Mortgage Fund (the Fund), a PIE fund that benefits from CFML’s expertise in structuring and managing mortgage funds.
The interesting, and differentiating, factor that CFML has made available to investors is the manner in which investors are able to exit the Fund. Exiting the Fund can be either through a quarterly redemption process (subject to lock-in periods) or via the ability to trade units in the Fund on a secondary market, in this case via Syndex.
“This unprecedented approach will provide retail investors with comfort that access to liquidity, while never guaranteed, will certainly be enhanced,” said Mike Jenkins, Syndex Founder.
More typically, mortgage fund managers don’t allow the transfer of ownership which rules out secondary market trading.
The platform allows investors in the Fund access to Syndex’s secondary market; a further innovation to the traditional investment model for fund liquidity.
CFML have included a research report from FundSource to complement its disclosure documents and give retail investors an opportunity to consider an independent analyst’s view of the merits of the Fund prior to investing.
According to the FundSource report, the Fund may be suitable for investors seeking to diversify their fixed interest exposure and who are satisfied that residential property offers appropriate security for the mortgage. The Fund aims to provide investors with investment returns over the medium term (i.e. 3 to 5 years) equal to the 90 Day Bank Bill rate plus 2.5% per annum (after fees, charges and expenses, but before tax).
To view more detail about the Fund offer, the product disclosure statement and the returns for the last 12 months click here.