Challenger mortgage fund resumes commercial lending
Challenger has moved to a full resumption of commercial lending activities around its Howard Mortgage Fund after investors this week voted to support a key restructure proposal.
The vote sees $850 million of the fund’s net assets available for withdrawal by unitholders, with $150 million set aside for the 30,000 Challenger Howard unitholders with account balances of $10,000 or less.
The vote also sees Howard become the first mortgage trust to resume commercial lending following the freezing of mortgage funds in the wake of the fallout from the global financial crisis and the Federal Government’s bank deposits guarantee move.
Challenger announced that the restructure proposal had been supported by 94 per cent of retail investors and 100 per cent of wholesale investors, with the result that the Challenger Howard Mortgage Fund would start evaluating commercial lending proposals with a view to deploying around $200 million in senior secured loans over the next 12 months.
Commenting on the restructure proposal, Challenger joint chief executive for funds management Rob Adams said the outcome was a relief, because some investors had wanted liquidity while others were content to remain fully invested.
As part of the restructuring proposal, Challenger has undertaken to make improvements to permanent liquidity arrangements for the fund.
AUTHOR
Mike Taylor
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