Australian Unity Investments (AUI) will wind up the High Yield Mortgage Trust (HYMT) from 9 December 2011, while maintaining its focus on continuing to grow its more conservative Mortgage Income Trust.
The HYMT will start returning all remaining capital to investors through regular payments and Mr David Bryant, CEO of AUI, said that with 48% of the trust already returned to investors through periodic redemption facilities, AUI expects the remaining 52% to be returned progressively between now and late 2014, as assets in the fund mature.
“We believe this decision is in the best interests of all investors in this particular trust in light of the investment environment since the global financial crisis.
“The government’s bank deposit guarantee, seen as necessary because of the GFC, had the unfortunate side-effect of triggering a rush of withdrawals from mortgage funds, forcing most to freeze redemptions.
“Following this, we have continued to see persistent demand for liquidity from investors in the HYMT and, given continued rate of redemptions we believe that the most responsible action is to formally terminate the trust and return the balance of the capital to investors,” said Mr Bryant.
AUI will make an initial payment to investors before Christmas of approximately 10 percent of investors’ capital. A second payment, of around five percent, will be made in March next year, and AUI expects to continue making regular payments on a six-monthly basis from September 2012. It anticipates that the fund will be fully closed by the end of 2014.
Mr Mark Pratt, general manager of property, mortgages and capital markets at AUI, said that despite winding down HYMT, AUI continues to believe mortgage funds have a role to play for investors looking for consistent income and regular access to their capital.
“The Mortgage Income Trust remains an important part of the investment portfolio of its investors, and given feedback from investors and lower levels of redemptions, this fund will continue under its current arrangements,” Mr Pratt said.
The Australian Unity Wholesale Mortgage Income Trust has returned 5.25% for the year ending 30 November 2011.
Australian Unity Investments is the funds management arm of financial services, health and retirement living services provider Australian Unity. It has over $11 billion in funds under management (as at 30 November 2011). Its investment approach is to use its established in-house expertise in property and mortgages while also forming joint ventures and strategic alliances with other organisations with specialist expertise.
For more information please contact:
David Bryant – 03 8682 4401
Mark Pratt – 03 8682 4448
12 December 2012