The new offering, called Pallas Short Term Fund, is a mortgage loan warehouse facility that offers a minimum investment term of six months, and thereafter allows investors to elect either to withdraw their monies or reinvest at each quarterly redemption window. The fund is supported by first mortgage loans and offers investors a 5.5% p.a. yield payable monthly in arrears.
The fund will be invested only in registered first mortgages secured over premium real estate assets in Sydney, Melbourne, and Brisbane, with each loan having a maximum loan-to-value ratio of 65%. The fund is looking to raise $50 million initially, with the capacity to increase the fund size as required.
“Although this will require very active management by us, to match fund assets against a relatively short investment commitment, Pallas Capital now has a loan book of sufficient size and differentiation to make this possible,” said Mark Spring, director of Pallas Group.
Spring further noted that it is the wide range of investment offerings by Pallas Capital that have enabled it to grow total funds under management by over 75% per annum.