Merx has been providing business and real estate financing solutions for over a decade and recently launched a wholesale investment fund. Managing Director Andrew Dunning discusses the background to Merckx Wholesale 1 PIE Trust and what it offers wholesale investors.
As long-time investors ourselves, we’ve been looking for the “ideal” debt fund structure for some time now, the kind of fund we want to invest in now and in our retirement years from now. In addition to the obvious aspect of being managed by experienced personnel, we agreed that we wanted a debt fund that:
- Preferred Matched Interest: Debt funds where decisions are made based on the interests of all parties, enabled by a fund structure in which the manager invests alongside the investors.
- Achieve diversification within a single asset class. A debt fund that invests in diversified lending to a variety of unrelated borrowers and risk profiles across business and real estate sectors to reduce concentration risk within the portfolio.
- Provides flexibility: A fund that recognizes that investor needs and circumstances may change and provides the ability to enter and exit efficiently.
- Provides tax savings: A fund that provides tax incentives and simplified tax compliance by using a PIE structure.
After researching the market and discovering that no other fund offers all four points, we decided to implement the fund structure ourselves. That is the Merx Wholesale 1 PIE Trust.
Since Merx began lending to the business sector, it has provided over $150 million in loans and capital needs continue to grow. Against the backdrop of that demand, the Merckx Wholesale 1 PIE Trust is generating high returns for our wholesale investors. Our target net income is 9-11% per annum, and since our launch in June 2022, our net income to investors has been over 15%. *. This is a compelling proposition for wholesale investors to consider and we are now introducing it to our broader network of financial advisors to explore potential clients.
Information Pack for Investment Advisors Now Available here. In the meantime, here’s an overview of what the fund has to offer.
*Targeted returns are not guaranteed and are based on many assumptions. Actual results may vary materially. Merx Wholesale 1 PIE Trust launched in June 2022. Annual returns will be available from July 2023. Further, past performance is not necessarily indicative of future performance. Investors should perform their own due diligence on any information provided prior to investing.
Merckx Wholesale 1 PIE Trust | Fund Overview
Profit Alignment – And Why It Matters
Profit adjustment is a core principle of the Merckx Wholesale 1 PIE Fund. As the Trust’s management team, we personally invest together with our investor partners.
This means that our interests as fund managers are directly aligned with those who invest in us, fostering a true sense of partnership, transparency and accountability. We share the same risks and potential returns as our investors and are committed to making decisions that are in the best interests of all parties.
Diversification: what to invest in
The Merx Wholesale 1 PIE Fund invests in secured loans to business owners and real estate professionals. Investors own a portion of the overall loan portfolio rather than being exposed to individual loans. This approach provides a lower risk, more efficient and flexible investment vehicle for all involved.
The Merckx Wholesale 1 PIE Fund manages a diverse borrower and risk profile in unrelated businesses and the real estate industry. This diversification reduces concentration risk and reduces the impact of a single underperforming loan on the overall portfolio. It also provides liquidity within the fund. Multiple loans repaid and funded at different times provide available cash within the fund and give investors flexibility in withdrawing their investments.
Flexible entry and exit
We are committed to long-term partnerships with our investors, but please understand that things can change. With this in mind, we have developed a fund structure that provides the necessary flexibility.
With the Merx Wholesale 1 Pie Fund, investors can:
- Choose to place a standing order to withdraw your reinvested earnings with no exit fees
- Redeem your unit with no cancellation fee if you give 6 months notice
- Units may be redeemed at any time without notice, subject to a 2.5% termination fee of the withdrawal amount.
Tax savings to maximize net income
Thanks to the PIE regime, the Merckx Wholesale 1 PIE Fund also provides tax savings for many of our investment partners. The tax rate on returns is capped at a maximum of 28%, making it particularly beneficial for investors with higher marginal tax rates.
Also, because taxes are paid at source within the PIE, investors generally do not need to include this income on their personal tax returns. This streamlines tax compliance for investors and eliminates the need to separately track and report investment returns. That said, if tax efficiency is important to your investor’s goals, it is advisable to seek the advice of a tax professional before investing.
Merx Wholesale 1 PIE Trust grew out of our decade-long commitment to non-bank business and real estate financing. Merx’s management team each brings his 20 years of commercial and professional experience in banking, finance and law.
We founded the Merx Wholesale 1 PIE Fund based on years of testing what works and what doesn’t from our personal investing and fundraising experience. We are now confident that this structure will meet our investment needs and objectives and are introducing it to our broader network of investment partners.
Want to know more?
With profit alignment, diversification and tax savings, the Merx Wholesale 1 PIE Fund could be an interesting opportunity for wholesale investor clients. click here Learn more about the fund’s strategy and the experienced team behind it.
https://investmentnews.co.nz/sponsor/merx-wholesale-1-pie-fund-investing-alongside-our-investors/?utm_source=rss&utm_medium=rss&utm_campaign=merx-wholesale-1-pie-fund-investing-alongside-our-investors Merx Wholesale 1 PIE Fund: Investing with Investors