SQM rates Private Capital Income Fund
The Private Capital Income Fund has received a three-and-a-half star rating from specialist property fund ratings agency SQM Research.
SQM said it had awarded the rating on the basis of the fund investment team's demonstrated skill set and experience, the fact its loans are secured by large, high-quality property assets, the existence of a prudent lending policy, and a fee structure below that of its peers.
The SQM analysis said that it also believed the current lending environment catered for strong margins above the Bank Bill Swap Rate, while commercial mortgage finance remained in short supply, with the big four banks reducing their exposure to the sector, the non-bank financial sector struggling to raise new capital, and many mortgage trusts winding up.
"The ability of the fund to capitalise on these conditions will be a benefit for investors," the analysis said.
However the SQM analysis also identified some weaknesses, saying that while the fund would be exposed to loans secured by high quality assets, it was likely to have stronger concentration risk compared to other mortgage trusts.
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