Bedrock Mortgage Fund – April 2024
April 2024 Fund Commentary
In April ‘24, in its 5th month since inception Ark Bedrock delivered its investors a 5th consecutive monthly return of 11.24% (annualised) or higher, at 11.27% for the month and 11.28% YTD. FUM increased by $1.8m in April to $22.4m and $4.7m of new FUM was received for unit issue in May ’24, bringing current FUM to $27.1m. Approx. 50% of the Bedrock FUM continues to be from existing Ark investors with a longer term experience with Ark and its investments.
Bedrock achieves its returns through a combination of careful investment selection, and dynamic cash management. Minimising cash holdings as best possible during a month sometimes entails temporarily deploying Bedrock funds into an Ark Wholesale loan intra month, and typically ahead of settlement of a longer-term investment. This softens the negative impact of having funds uninvested and contributes positively to Bedrock’s returns. Bedrock is fortunate to be able to do this by virtue of its relationship with its related fund, the Ark Wholesale Fund, and the opportunities created by the Ark team managing that fund.
During April the fund made one new loan investment, a $1.1m Residential land-bank investment by a high quality borrower developing a significant, master-planned neighbourhood precinct in north Adelaide, South Australia. An additional $0.7m was invested into two existing loans, ensuring almost full deployment of cash funds.
It is typical that 100% of the interest and loan management fees payable to Ark is prepaid at loan settlement or at least one quarter in advance, substantially eliminating the risk of loan arrears. Ark carefully monitors the financial position and standing of its borrowers, and dilligently manages the performance of all individual loans, thus minimising laon defaults and best ensuring protection of investor’s capital. 100% of Ark’s (and hence Bedrock’s) loan investments are performing, with no loans in default or in arrears.
In March 2024 Ark Bedrock received its inaugural fund rating by Research agency SQM, achieving an investment grade rating. This rating will enable a broader number of Financial Advisors to recommend Ark Bedrock to its clients, helping the fund grow and deliver better opportunities and risk weighted outcomes for its investors.