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21 December 2022

A note from our CEO – December pre-tax returns of 6.07%

Paul Bendall

Date: 21 December 2022

Hello and welcome to our last newsletter of the year. 2022 has been a busy year and if you are like me and the rest of the FMT team, you will be looking forward to spending some time relaxing with family and friends over the festive season.

We are pleased to announce the annualised pre-tax return for the December quarter is 6.07%.

In keeping with our philosophy of careful and managed growth the return rates have increased consecutively each quarter this year. This growth shows the resilience of the Fund especially considering the uncertainty and volatility that other asset classes have experienced over the past 24 months due to local and global market factors.

Our lending team are doing a great job in identifying high quality lending opportunities and achieving growth in our lending rates at the same time, which filters through to our investor returns. We have a strong pipeline of loans with no current loans where we are anticipating a capital loss. This, combined with increasing lending rates, means we are expecting further growth in investor returns in 2023.

As an active manager our philosophy is to optimise return rather than maximise return, and we believe this is what drives our success.

Here are some of our highlights and successes from 2022:

  • The Fund stands at over $1.56 billion in FUM.
  • We welcomed over 1,000 new investors this year with investor numbers now over 6,000.
  • Our loan portfolio grew to $1.39 billion, secured by over 1,350 first mortgages on properties located primarily in NZ’s five main centres.
  • Key lending metrics have tracked in line with our 5-year averages despite the tougher economic conditions.
  • Lending ratios remain significantly lower than the ratios permitted in our governing documents.
  • We opened a new office in Christchurch.
  • We were announced as one of the Top Mortgage Employers for 2022.
  • Over $130,000 was invested into our communities through our sponsorships.
  • Investor Meetings were reinstated after a two-year hiatus.

Our conservative lending approach is reflected in our loan book statistics. Our average loan to value ratio across our loan book is less than 50% and over 99% of lending is less than a 70% loan to value ratio. This means our borrowers must have significant equity in the lending transaction before we lend to them, which provides a substantial buffer to adverse property market movements.

Looking ahead to 2023

Over the course of 2022 the Fund has performed extremely well in a challenging economic environment. We see further headwinds going into 2023 with the continued increase in the cost of living, rising interest rates, the impact of inflation and geo-political tensions. Despite these headwinds, we look forward to 2023 with confidence as the Fund remains in a strong financial position.

Over the coming months we will be planning Investor Meetings for 2023 and we are looking to add additional locations. Updates on venues and dates will be available in future newsletters and on our website.

Developments will see our investment offering enriched, including the delivery of an online investor portal together with further enhancements to our cyber security platform through the introduction of new technology. Our primary focus for 2023 will continue to be the active management of the Fund.

In closing, on behalf of all the team at First Mortgage Trust, thank you for your continued support. We wish you and your families a safe and enjoyable Christmas and New Year.


Paul Bendall


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