Australian Unity Investments has continued to expand its specialisation in property funds management with the launch of a new high-yield mortgage trust.
The trust will offer higher-leveraged mortgages, such as construction and development loans, and for specialist property such as service stations and cinemas. The higher-risk mortgages will be tempered with loans on what the investment manager terms, high-quality commercial buildings.
The aim of the trust is to provide investors with higher returns than typical mortgage funds, while at the same time Australian Unity claimed there was less volatility in the unit price compared to other fixed interest investments.
The breakdown of mortgages in the trust will be 60 per cent in specialised properties, 25 per cent for construction and development loans with the balance held in higher-leveraged lending.
Australian Unity Investments general manager David Bryant said the High Yield Mortgage Trust, which will have a wholesale and retail version, would be true to label with a target allocation of 90 per cent in mortgages.
“Although these mortgages are usually considered higher risk than more mainstream commercial lending, our mortgage team has an excellent track record in managing loans.
“The risk management processes ensure borrowers clearly demonstrate evidence of debt serviceability, and we also use third-party service providers for construction transactions.”
