The firm’s mortgage fund, CFML Mortgage Fund was launched in March last year, but the firm has taken the recent step to raise from everyday investors.
The fund will lend on residential secured first mortgages, and CFML will lend to those looking to buy investment properties, apartments, as well as overseas buyers who meet certain legal criteria, CEO Patrick Middleton told TMM Online.
Minimum investments are $25,000, Middleton said. He added the firm is planning a roadshow later this year with financial advisers. The fund is structured as a PIE fund.
On the lending side, the fund will be available online, and also through the adviser channel. “We see ourselves doing more with the adviser channel as we grow our fund,” said Middleton. “We’re being cautious as we grow, and as we grow we’ll look to create more visibility,” he added.
The fund is not looking to lend more than 70% LVR in most cases, Middleton said. Typical rates are about 7.25%, he added. The fund is lending on interest-only and principal and interest terms. Minimum loan sizes are $50,000, while its average loan size is currently more than $500,000.
Middleton said he was keen to grow the firm’s mortgage book as banks tightened up. “There has been a contraction from the main banks in terms of what they want to do. We’re seeing good residential secured property and have to be able to take that on.”
The comments come as non-bank lenders, including Australian companies Pepper Money, Resimac, and Bluestone, target growth in New Zealand.
“People that have got one or two investment properties and want to continue to invest, the banks are saying their books are full, and we are meeting that need, no doubt about it,” Middleton added.
“It has opened up a lending market for second tier lenders. There's a number of non-banks and peer-to-peer lenders, and we believe there's space for us to operate in that market as well.
At March 31, the fund had about $20.2 million. “As we grow that more, we’ll be looking to push that out into the lending market,” he said.
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