Palm Beach Residential Loan Fund

Status: Completed   Vertical: Asset backed lending

About the deal

  • First mortgage loan facility on a premier property in Palm Beach with an attractive return of 8.5% pa on Tranche 1 (over 6 months) and 18% pa on Tranche 2 (over 3 months)
  • The developer had several large development projects in play and decided to sell this property and hold out for larger potential profits on their development projects.

Why the deal is attractive

  • The loan was provided to a developer, with security over the developer’s personal prestige home in Palm Beach NSW.
  • The loan had a strong buffer that protected the capital and interest return

What it delivers to investors

  • The repayment date for our loan was missed and the borrower entered a period of default interest until our funds were repaid.
  • A total return of 11.94% annualised, from late October 2019 to late May 2021
  • This case shows that with appropriate security and a properly structured loan, default events can add further return to an already attractive rate of return.