Pallas Capital has earned a superior 4-star rating for the Pallas Short Term Fund from SQM Research. The rating qualifies the fund as High Investment Grade suitable for inclusion on most advisors Approved Product Lists.
SQM Research conducted thorough due diligence on Pallas Capital’s investment team and processes, corporate governance, fund compliance and risk management to determine the rating. A 4-star rating recognises the fund’s potential to outperform over the medium-to-long term, with an attractive return to investors after fees of 6% p.a.
The rating by SQM Research is a reflection of Pallas Capital’s commitment to the highest level of due diligence in its origination and loan management processes, providing investors with a reliable return, despite market volatility such as that seen in the past 18 months.
“The Pallas Short Term Fund was launched only at the start of this year, and an SQM rating of 4-stars is testament to Pallas Capital’s rigorous due diligence with its origination and credit processes and risk management systems,” says Mark Spring, Executive Director, Pallas Capital.
He adds, “This rating gives wealth planners and investors the assurance that an investment in the Pallas Short Term Fund is in safe hands, simultaneously offering brokers and borrowers the confidence that our discretionary pools of capital are well managed and that we’re here for them for the long term.”
Introduced at the start of 2022, the Pallas Short Term Fund offers investors a 6% p.a. yield payable monthly in arrears and is invested only in registered first mortgages secured over real estate assets across Sydney, Melbourne and Brisbane with each loan having a maximum LVR of 65%.
Importantly, these loans are required to have a maximum term to maturity of eight months, currently averaging at just three months. CRE loans in the later stages of maturity can present a lower risk profile as construction or planning approvals are either complete or in the final stages of delivery. Matching the loan maturity profile with the six-month notice period required for redemptions allows for investor redemption requests to be met with a high degree of confidence. The Pallas Short Term Fund provides investors with an additional interest payment if redemption is delayed for any reason.
Pallas Capital is one of the fastest growing structured property investment arrangers in Australia, offering brokers and developers lending solutions that are tailored to their needs. It offers borrowers five core loan types, being acquisition, pre-development, construction, residual stock and vacant land loans, along with the flexibility to negotiate LVRs and the required level of pre-sales for construction loans.
Pallas Capital manages funds for investing in commercial real estate loans secured against non-specialised property assets with values between $1 – $50 million in major metropolitan areas. Wholesale investors are offered investment opportunities providing fixed or variable rate returns ranging from 6% p.a. in the Pallas Short Term Fund to 7% to 8% p.a. (first mortgages), 11% for the High Yield Fund (First and Second Mortgages) and up to 15% p.a. for preference equity investments. Pallas Capital’s loans are supported by robust due diligence on each borrower and the associated property, a realistic and multi-faceted exit strategy, and active management of all loans by the Pallas Capital team throughout the term.
Pallas Capital and developer Fortis comprise Pallas Group, a business that provides specialist investment, lending and development solutions in the boutique property market in Australia.
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