DomaCom launch branded mortgage sub-fund
DomaCom have announced an allocation to two mortgage investment by their first branded Mortgage Fund with DFS Portfolio Solution (DFSPS).
The two first mortgages total around $4.1 million. The first mortgage has been drawn down and the second is expected over the next few weeks.
DomaCom CEO Arthur Naoumidis said “DomaCom has been working with DFSPS for some time to bring about a branded retail mortgage sub-fund on the DomaCom platform that can be accessed by advisers and portfolio managers”.
“Until now this market was mostly accessed by sophisticated investors but as a model manager, DFSPS has unlocked the retail potential of the non-bank sector by making this sub-fund available to clients and advisers who utilise its portfolio services.”
In an environment of highly compressed yields across a range of defensive investments, the non-bank sector is offering annualised target returns substantially higher than the cash rate, in a range of 5%-10% pa.
DFSPS managing director Stephen Romic acknowledged that it was difficult to access and manage mortgage assets until the fractional model developed by DomaCom became available.
“DFSPS and DomaCom have been working together for over 12 months to build a unique and innovative capability that allows advisers to efficiently incorporate exposures to first mortgage investments within their client portfolios," Romic said.
"With increasing market volatility expected within a persistently low yield environment, we wish to take advantage of the prevailing risk premiums whilst they continue to present.
"We are pleased to be able to offer the AFSLs that use our portfolio service access to this unique opportunity; and expect further demand in this sector going by the growing interest among new AFSLs”.
Appointed by DomaCom, DFSPS will act as sub-manager with responsibility for decisions on portfolio composition and management, including, seeking, vetting and recommending first mortgage opportunities, liaising with mortgage originators, arranging independent credit assessments, overseeing and managing timelines and liquidity management and co-ordinating funding and managing cashflows.
In developing an institutional-grade mortgage fund within the DomaCom Fund DFSPS aims to invest an initial $25m as part of the initial phase and then continue to build over time.
