What is a wholesale mortgage fund?
A wholesale mortgage fund is a managed investment scheme that combines capital from qualifying wholesale investors and deploys it into a portfolio of loans secured by registered mortgages over Australian real property. Investors receive returns in the form of income distributions, typically paid monthly, derived from the interest charged to borrowers on the underlying loans.
Wholesale mortgage funds are available exclusively to investors who meet the criteria set out in section 761G of the Corporations Act 2001 (Cth), typically by investing a minimum of $500,000, or by qualifying on the basis of net assets or income.
Two ways to invest with Granor Capital
Granor Capital offers two distinct fund structures for wholesale investors, each designed to suit different investment preferences and risk appetites.
The Granor Lending Fund is a pooled mortgage fund that provides passive diversification across a portfolio of property-backed loans. Your capital is spread across multiple borrowers, property types, and geographic locations. The fund targets approximately 8 per cent per annum in returns, paid monthly.
The Granor Lending Fund No. 2 is a contributory lending fund that allows investors to choose individual loan opportunities and build their own portfolio. Each investment is a direct participation in a specific property-backed loan, giving investors greater control over their exposure.
How do wholesale mortgage funds generate returns?
Returns in a wholesale mortgage fund are derived from the interest paid by borrowers on the loans within the fund’s portfolio. The interest rate on each loan reflects the risk profile of that loan, including the loan-to-value ratio, the quality of the security property, and the term. Management fees and fund operating costs are deducted before distributions are paid to investors.
Granor Capital aims to provide monthly distributions to investors. The distribution amount may vary depending on the composition and performance of the fund’s loan book. Target returns are not guaranteed, and all investments carry risk including the potential loss of capital.
Benefits of investing in a wholesale mortgage fund
Wholesale mortgage funds offer several potential benefits for qualifying investors. These include regular monthly income distributions, property-backed security through registered mortgages over Australian real estate, diversification away from traditional equity and bond markets, professional fund management by an experienced team, and transparent reporting on portfolio composition and performance.
What are the risks of investing in a mortgage fund?
Like all investments, wholesale mortgage funds carry risk. Key risks include borrower default where a borrower fails to meet their loan obligations, property market risk where the value of the security property declines, liquidity risk where investors may not be able to withdraw their capital on demand, and concentration risk where the fund has significant exposure to a small number of loans or a single geographic market. Investors should read the fund’s Information Memorandum carefully and seek independent professional advice.
Who qualifies as a wholesale investor in Australia?
You may qualify as a wholesale investor under the Corporations Act 2001 (Cth) if you invest at least $500,000 (the product value test), have net assets of at least $2.5 million certified by a qualified accountant, have earned gross income of at least $250,000 per annum over each of the last two financial years certified by a qualified accountant, or hold professional investor status such as an Australian Financial Services Licence.
What is the minimum investment in a Granor Capital fund?
The minimum investment in Granor Capital’s wholesale mortgage funds is $500,000, which also satisfies the wholesale investor product value test under the Corporations Act.
How often are distributions paid?
Granor Capital aims to provide monthly distributions to investors, typically paid within 14 business days of month end. The distribution amount depends on the performance of the underlying loan portfolio and is not guaranteed.
Can I invest through my SMSF?
Yes. Self-managed superannuation funds may invest in Granor Capital’s wholesale mortgage funds, subject to the fund meeting the requirements of its investment strategy and the SMSF trustee qualifying as a wholesale investor. SMSF trustees should seek independent financial and legal advice before investing.
What is the difference between a pooled and contributory fund?
In a pooled fund like the Granor Lending Fund, your capital is spread across a diversified portfolio of loans managed by the fund manager. In a contributory fund like the Granor Lending Fund No. 2, you choose individual loan opportunities and invest directly in specific property-backed loans. The pooled fund offers passive diversification, while the contributory fund offers greater control and transparency over each investment.
Explore our funds: Granor Capital investment funds | Granor Lending Fund | Granor Lending Fund No. 2
Related: How pooled mortgage funds work | What to consider before investing | Wholesale investor eligibility
This page is for general information only and does not constitute financial advice. Investment opportunities are available to wholesale clients only as defined in the Corporations Act 2001 (Cth).