Investors might benefit from bond trusts, Thinktank says

Commercial property lender Thinktank has said that its two investment bond trusts, established as an alternative to bank financing, might be positive for investors.

Both funds, the Income Trust and the High Yield Trust, aimed to target self-managed super fund (SMSF) trustees and had a minimum term of a year with $10,000 minimum investment and they offered monthly distributions.

Further to that, the Income Trust loans were secured against first mortgages over commercial and residential property, while the High Yield Trust loans were secured against second mortgage commercial property subordinated to Thinktank’s wholesale funding facilities and term funding in bond markets.

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Thinktank’s chief executive, Jonathan Street, said that interest in the funds was not limited to the institutional market.

“Although that was our initial thinking and where we focussed much of our attention, we are seeing small institutions, such as family offices and fund of funds, being attracted to the investment profile,” he said.

“Property is an asset that is well known and understood by the market, so we shouldn’t be surprised that mortgage-backed bond trusts offering such competitive yields are generating interest in the market, especially when our track record in managing credit risk is factored into the equation.”

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