Squirrel bites into residential mortgage

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Squirrel offers Kiwi investors a new opportunity to invest in the $ 320 billion New Zealand home loan market.

Friday, November 26, 2021, 6:43 am

by Matthew Martin

John Bolton.

John Bolton, CEO of Squirrel, is pleased to launch the Squirrel Monthly Income Fund, which gives retail investors access to a diversified portfolio of homeowner loans backed by the country’s most popular asset class – real estate.

The new Portfolio Investment Entity (PIE) fund will be issued and managed by Implemented Investment Solutions with an expected pre-tax monthly payment of 4.75% per annum (OCR + 4.00%).

Squirrel has also partnered with the InvestNow investment platform for private investors to give investors access to the fund.

New Zealand banks are not giving retail investors the option to invest directly in the home loan market, and Bolton says the brand new fund gives investors the benefits of a regular income, all of which is housed in a tax efficient PIE structure.

“For many Kiwis, home ownership remains the most important source of wealth,” he says.

“Commercial real estate funds have proven to be consistently popular in New Zealand as members value both diversification and consistent returns.

“The Squirrel Fund simply expands the opportunity to an undoubtedly larger and more familiar side of the real estate market for most Kiwis – it’s the investment next door.”

Squirrel chief operating officer David Tyrer says one of the most interesting things about the New Zealand financial market is how big the home loan debt pool is compared to any other market and how little access there is for investors.

“At over $ 320 billion, it individually dwarfs the capitalization of the NZX, sovereign debt, corporate debt, agricultural debt and Kiwisaver.

“When we look overseas, residential mortgage-backed securities are commonplace and some of the deepest investment pools in the world,” says Tyrer.

According to Bolton, the new fund will bring Squirrel’s expertise in residential real estate lending together into a convenient, tax-efficient investment vehicle that allows investors to generate returns from a diverse portfolio of high quality loans that are primarily secured against residential real estate.

“In addition to the expected regular monthly income, investors in the Squirrel Fund will be confident that exposure to a variety of underlying loans and an interest in real estate in the event of borrower default will manage their risks,” said Bolton.

“Squirrel has built a reputation for being a trusted brand with a clear focus on the needs of New Zealand investors – and we are excited to democratize home loan investments for all Kiwis.”

Tags: Implemented Investment Solutions InvestNow John Bolton Cake Fund Squirrel

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