Bedrock Mortgage Fund – February 2024
February 2024 Fund Commentary
Launched in December 2023, the new Ark Bedrock Mortgage Fund followed up its maiden distribution of 0.96% (11.26% annualised) with a return of 0.95% (11.24%) in January ’24 and 0.90% (11.27%) in February ‘24. The Fund ended February with $8.9m in FUM and investments in 8 mortgage facilities across Melbourne, Sydney, Adelaide, Margaret River (WA), and Toowoomba (Qld). A further $12m in applications was received for unit issue on 1 March 2024, bringing FUM to $20.5m in the first 3 months. The Fund has thus far received significant interest from new investors attracted to the pooled fund model of development investing, but most pleasing is the support (approx. 50% of FUM) from long term Ark investors attracted to Bedrock’s simple diversification strategy, the returns being delivered and their past experience with Ark and our approach to lending and investment management.
Ark’s Bedrock Fund diversifies its investments by taking an interest in a range of Ark Wholesale Mortgage Fund investments alongside other contributing investors. Hence investors in Bedrock benefit from the reduced concentration risk of this strategy whilst seeing returns similar to those in the contributory Ark Wholesale fund. Investors also benefit from Ark’s risk philosophy and practice, that protection of capital takes priority in all lending decisions. Additionally, Ark’s rigorous due diligence and loan selection process is heavily informed by the extensive first-hand development experience within the Ark team, which enables Ark to more critically assess the risks in a developer’s project, and hence Ark’s investment.
Ark’s loan origination team will invest only in the sectors and loan types approved by the Board. Ark’s loan settings are constantly monitored by its senior management and Board, and updated dynamically to reflect changing macro-economic conditions, and particularly the microclimate in different property development sectors. The Bedrock Fund Investment Committee, comprising the Ark Capital CEO and the dedicated Bedrock Fund Manager communicate constantly to assess investment opportunities for Bedrock, considering the Fund compliance metrics, optimal investment diversity settings and the target returns for the fund.
Research coverage and a rating by SQM Research has been commissioned for the Bedrock Fund, and is expected to be published in April 2024.