The Pallas Funding Trust is a growing and diversified fund established in collaboration with Credit Suisse AG.
Pallas Capital executive director Steve Lawrence said in conjunction with Credit Suisse, the PFT Feeder Fund strengthened and diversified its funding base.
“The product will allow us to bring more of our pre-development, residual stock and commercial investment loans to the lending market to assist brokers and borrowers,” said Steve Lawrence, Executive Director – Lending.
The PFT Feeder Fund allows wholesale investors to invest into PFT and is an open-ended fund with a minimum investment term of 12 months (after an initial minimum period ending on November 01, 2022.
PFT is a diversified warehouse facility that invests only in registered first mortgages secured over premium real estate assets with each loan having a maximum LVR of 65% (or 70% in the case of investment loans) and must maintain a weighted average LVR across the fund of 66% or less.
Pallas Capital executive director Mark Spring said a number of its investors were looking to reduce their risk profile without making a significant sacrifice in terms of investment yield.
“The PFT Feeder Fund gives a direct exposure to PFT, our most conservative first mortgage fund, at an attractive rate of return,” Spring said.
“For example, PFT cannot make construction loans or ‘related party loans’ and must operate within many other limitations negotiated with Credit Suisse as the largest investor in PFT.”
Considered as a lending vehicle, PFT was established by Pallas Capital in November 2021 and has a total funding of $588m approved by its funding partners.
“PFT lends money on a range of first mortgage pre-development loans, residual stock loans and investment property loans, with loan sizes ranging from $1million to $15 million,” Spring said.
“PFT assesses each loan according to robust and prudent lending criteria. PFT specifically caters to medium-sized CRE borrowers who are under-serviced by the major banks.”
To date, PFT has deployed over $140 million across 25 loans.
The loan book features a diverse mix of loan types including completed residential projects, future development sites and investment properties across locations in Sydney, Melbourne, Adelaide and Brisbane.