Melbourne, 1 December 2020 – MaxCap First Mortgage Construction Fund rated SUPERIOR.
Australia Ratings Analytics (Australia Ratings) has conducted a review and has assigned an investment rating of ‘SUPERIOR’ to the MaxCap First Mortgage Construction Fund (MFMC, the Fund). A Product Complexity Indicator of ‘YELLOW’ has also been assigned to designate the view that the Fund is a COMPLEX financial product, indicating that the underlying assets require specialist investment skills to acquire and to monitor. In addition, investment in this Fund is effectively Illiquid and investors should have a good understanding of the term and characteristics of the distributions from this type of fund. This Fund is available to wholesale investors only.
A rating of SUPERIOR is the highest rating on the investment rating scale used by Australia Ratings. This rating indicates the highest level of confidence that the fund can deliver a risk adjusted return in line with the investment objectives of the fund.
Australia Ratings’ analyst, Maggie Callinan, says “the rating reflects the consistent performance and track record of the Fund, especially throughout the COVID crisis”. She added “we believe the Fund is very well placed to provide CRE debt exposure for long-term investors”.
The MaxCap First Mortgage Construction Fund (MFMC) is managed by MaxCap Investment Management P/L, a subsidiary of MaxCap Group P/L, a Melbourne-headquartered Australasian specialist commercial real estate (CRE) investment manager. MFMC invests in senior, first-mortgage, CRE construction loans, targeting relatively short-term, medium-sized loans of $30m to $50m. The maximum Loan to Value ratio for loans is 65%, allowing significant downside protection. The underlying investment theory is that the Australian and New Zealand commercial real estate debt market offers a significant and increasing opportunity for investment managers to achieve strong, risk-adjusted returns.
As at September 2020, the Fund has $454.2 million funds under management, with a net return of 12.1%.
The research report is available from www.australiaratings.com.
FOR MORE INFORMATION, CONTACT:
Maggie Callinan, Director
maggie.callinan@australiaratings.com 03 8080 6684
MORE INFORMATION ABOUT OUR INVESTMENT RATING PROCESS & DEFINITIONS:
Available on our website.
ABOUT AUSTRALIA RATINGS
Australia Ratings is a local, independent rating agency that provides research and ratings on debt securities, investment products, and Operational Capability Assessments. As an ASIC-licensed rating agency, we provide general advice to the broader investment community through our detailed reports. We are Australia’s only agency that holds a retail Australian Financial Services Licence (AFSL). This enables both retail and wholesale investors to use our credit ratings to help them gauge credit risk and complexity of financial products sold in the Australian market.
ABOUT AUSTRALIA RATINGS' INVESTMENT RATING
Our investment rating reflects Australia Ratings’ current opinion of a fund’s or an investment’s ability to achieve its stated investment objectives in the near term.The rating expresses a view on the expected consistency of the fund’s or investment’s performance within its peer or style group and on the fund manager’s ability to produce superior performance amongst its peers in the near term with due regard to the medium-term consensus view of the asset class to which the product is benchmarked.
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