19th March 2008
In June 2007, we issued an Investment News entitled "Know who you are investing with". In that issue we highlighted the difference between La Trobe and a number of debenture companies that had experienced difficulties and sustained losses.
We noted in that Investment News that La Trobe does not permit lending to related entities, or to directors or staff. We highlighted La Trobe's tightly managed approach to construction and development projects, with the percentage of the Fund exposed to property developments currently standing at 16.34%. We noted that the average loan-to-valuation ratio for the Fund rarely exceeds 66%, with the average currently standing at 59.65%. Finally, we reminded investors about La Trobe's track record of over 50 years' successful operations.
So, in March 2008, with the global economic and financial environment in turmoil, interest rates rising, and a number of Australian financial institutions such as MFS, Centro, City Pacific and Allco in trouble, we thought that we should again reiterate for investors the conservative differences and attributes of the Fund's investment profile and the key strengths of La Trobe as the Responsible Entity of the Fund:
- La Trobe specialises in making loans secured by registered mortgages over Australian properties; it's all we do, and it's where our expertise lies. We have been lending for over 50 years, and we've successfully negotiated the ups and downs of the markets over that time. We do not manage any other type of assets.
- The La Trobe Australian Mortgage Fund is exactly that - a mortgage fund. It is not a property fund, and does not invest in property. The Fund lends money on the security of Australian property and, as noted above, the average amount lent by the Fund by way of mortgage is only 60% of the independently assessed property value.
- The Fund has no borrowings whatsoever and in the underlying investments we are almost invariably the first mortgagee on title.
- The Fund invests in a portfolio of mortgages broadly diversified by geography, security type, loan purpose and loan size, the latter currently averaging $259,778. Construction and development currently represents only 16.34% of Fund's investments. The Fund only lends to a limited number of select construction and development projects at a time and we don't undertake any construction developments ourselves.
- La Trobe does not have any relationships with property trusts, either listed or unlisted, and we don't lend to property trusts.
- The La Trobe Group is not listed on any Stock Exchange - so the Group is unaffected by the day-to-day turbulence of the stock markets, and we are not exposed to margins loans, which many investors will have read about.
- Neither La Trobe nor the Fund has any credit exposure to the US sub-prime mortgage markets.
- The Fund was established by La Trobe in 1999 and is registered with the Australian Securities & Investments Commission ("ASIC") as a managed investment scheme.
- La Trobe Financial Asset Management Limited, the responsible entity of the Fund, holds Australian Financial Services Licence No. 222213.
- The Pooled Mortgages Option of the Fund has been independently rated by PIR and S & P, and both research houses will be undertaking update reviews over the next few months.
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Head of Funds Management
t +61 3 8610 2811
Chris Andrews is the Head of Funds Management for the La Trobe Group and has responsibility for the La Trobe Australian Mortgage Fund.
Read full profile here.
La Trobe is one of Australia's leading independent specialist mortgage Financiers. Its business includes residential mortgages, commercial mortgages, and investment services operating one of Australia's largest Mortgage Funds under AFSL 222213. It employs over 115 staff and has raised over AUD$10Billion to assist over 100,000 customers since inception in 1952.
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