Australian Unity winds up mortgage trust

Australian Unity Investments (AUI) has announced it will be closing down its High Yield Mortgage Trust (HYMT) over the next three years.

Around 48 per cent of funds in the trust have already been returned to investors, with the remainder to be returned by late 2014 via a series of redemptions as assets in the fund mature, according to AUI.

There will be an initial payment to investors before Christmas of approximately 10 per cent of investors' capital and a second of around 5 per cent in March next year, with regular six-monthly payments thereafter, according to AUI.

AUI chief executive David Bryant blamed the Government's bank deposit guarantee for triggering a rush of withdrawals from mortgage funds, forcing most to freeze redemptions, as a major reason for the closing of the fund.

"Following this, we have continued to see persistent demand for liquidity from investors in the HYMT, and given continued rate of redemptions, we believe that the most responsible action is to formally terminate the trust and return the balance of the capital to investors," Bryant said.

AUI said it would continue to maintain its focus on growing the more conservative Mortgage Income Trust. AUI's general manager of property, mortgages and capital markets, Mark Pratt, said that given feedback from investors and lower levels of redemptions, the fund would continue under its current arrangements.

AUI said its Mortgage Income Trust had returned 5.25 per cent for the year to 30 November 2011.