Our latest annualised pre-tax return is 5.13%.

While the return remains above our target benchmark of 1% above the major banks’ average 12-month term deposit rates, it is slightly below the level we had targeted to achieve. This reflects continued volatility and uncertainty in the market, which has affected lending activity.

Subdued market conditions have slowed the deployment of available capital and, as a result, the fund has continued to hold a higher cash position, which has softened returns. However, this liquidity also positions the fund to take advantage of attractive lending opportunities as market conditions improve.

The return was also modestly affected by a small number of non-performing loans that we have chosen not to distribute
income on.

Active management is key

Managing non-performing loans is part of overseeing anylending portfolio, particularly during more challenging economic conditions.

Importantly, our experienced team is actively managing these loans through the recovery process, with a focus on achieving the best outcomes for the fund and investors.

Of the extensive well-diversified portfolio, only 2% are classed as being non-performing. This is a small proportion of the overall portfolio and remains low by industry standards.

We have recently completed a comprehensive review of our loan portfolio that has highlighted the strong position of the overall loan book.

We also hold a reserve fund which provides an additional layer of investor protection against potential loan losses.

The wider lending portfolio remains strong

The fund’s scale and lending diversity mean its overall performance is not dependent on any one loan, borrower or property.

In addition to the reserve fund, the portfolio has an average loan-to-value ratio of around 51%. Investor capital is supported by approximately $4 billion in property secured by first mortgages assets, personal guarantees from borrowers and significant cash holdings in the fund.

Open and transparent reporting

Transparency and integrity are fundamental to how we manage the fund. We believe investors are best served by transparent reporting, sound lending decisions and proactive portfolio management. That means recognising issues when they arise, managing them actively and communicating openly.

Investor meetings

I am looking forward to catching up with many of you at our upcoming investor meetings and having the opportunity to connect in person.

In an increasingly digital world, face-to-face connection remains valuable. These meetings are an opportunity to update you on FMT’s performance, share what we are seeing across the market and provide further insight into how we are managing the fund. They also give you the chance to ask questions, share your views and speak directly with members of our team. We value these conversations and the feedback they provide.

Thank you for sharing your feedback

Finally, I would like to thank everyone who completed our recent investor survey. Your feedback helps us understand what matters most to you and where we can improve. Our Senior Leadership Team will review the findings and use them to help shape future decisions and enhance the investor experience. Thank you for the trust you continue to place in us. We do not take that trust for granted. We remain focused on managing the fund carefully, communicating openly and protecting your interests, while continuing to make prudent decisions that support the fund’s long-term
strength and performance.

Paul Bendall, CEO