5th birthday celebration for the RAW Mortgage Fund!
We are delighted to celebrate the five-year anniversary of the RAW Mortgage Fund. The Fund, managed by Tim Parkes since inception, marked this anniversary by hitting a 12 month rolling return of 4.42%, another record!
Since inception the Fund has delivered 21.26% to institutional investors, consistently delivering positive returns and protecting investors from volatile markets.
It was time for a slice of cake with a few candles!
The First Five Years in Review - Highlights
- When we established the Fund, our aim was simple: to provide investors with attractive and consistent risk adjusted returns, combined with a high level of capital security.
- Every decision we have taken in the five years since launch leads back to that simple aim, including our target market, our conservative lending criteria (max. 50% loan to property value across the portfolio), and a simple and transparent fee structure.
- We have been prudent in our lending, choosing to lend only on property in good to excellent condition with a focus on popular residential areas in key commuter locations in and around London and other major cities in the UK.
- We have focused our lending on property that can better withstand a property price correction and avoided high value property that tends to be more volatile in a downturn.
- We have focused on borrowers who typically have a range of other assets and consistent income, who are often professionals or successful businesspeople. We have also ensured that where properties are tenanted, they have a strong level of rent compared to the borrowers’ likely mortgage loan interest and management costs.
- The steady growth of the Fund – including 60 consecutive months of positive performance - we’ve witnessed over the past five years are testament to the fantastic team we’ve put together at RAW Capital Partners, as well as our distinguished approach to investing.
What we have learned along the way
- We found high quality opportunities in a specialist segment of the mortgage market often overlooked by others and poorly served by the mainstream banks.
- We learnt that swift responses were highly valued as the mainstream lenders generally take a long time to respond. The team collaborate to ensure ‘next day delivery’ of decisions from our experienced credit committee.
- We also learnt not to waste people’s time - that a swift ‘no’ to a borrowing request is better received than a slow no. This has helped us develop a strong reputation and to identify good quality business from brokers who return to us knowing we will give them a quick answer.
- We have developed expertise in conducting detailed diligence on our chosen niche of borrowers (non-UK resident individuals and private trusts structures) which other lenders consider burdensome, instead we have made it our bread and butter.
- As our network of contacts and introducers has grown both in the UK and around the globe, we have addressed the challenges of dealing with a geographically diverse book of borrowers using independent professional specialists to assist us in our credit assessments.
- Most recently, our team learned quickly to adjust to remote working and soon embraced collaborative tools such as Zoom and Microsoft Teams. We have continued to build an increasing pipeline of quality lending opportunities at low loan-to-property valuation levels and with good quality borrowers.
While much has changed in the last few years, our investment objective - to deliver attractive and consistent returns and a high level of capital security - has not.
There may be troubled economic times ahead, however we are confident that our thorough and consistent approach, with careful consideration of ways to reduce and mitigate risk, will continue to provide consistent risk-adjusted returns to long term investors and welcome the opportunity to speak with investors about how the strategy may work as part of their clients’ portfolios.
Anyone for cake?
RAW Mortgage Fund returned 4.42% for institutional investors, 3.90% for smaller investors and 3.37% for monthly dealing investors in the rolling 12 months to end May 2020