Raw Land LendersCommodity Land Lender
Borrowings are based on variable interest rate. This fund is designed for individuals, family offices, pension funds, trustees, companies and charities. It is the Fund's aim to achieve consistently high, lucrative, risk-adjusted yields from the allocation, performance, acquisition as well as service of a diverse UK backed loan book.
It is the objective of the fund to reach a constant overall yield before charges of four to five percent per year. If British interest prices rise, investor yields will also rise. This fund will seek to provide diverse, high value and low exposure backed credit facilities by de-intermediating conventional lenders.
This will lead to significantly better diversity than traditional peer-to-peer loans. This fund primarily grants loans to private equity buyers and secures high-quality housing, mainly in London and the South East of England. Careful management of risks is based on prudent borrowing practices, strict checks on creditworthiness and continuous supervision.
It does not grant loans for quality real estate in London or elsewhere in the UK. The Fund lends the remaining 50% of the sale value of the real estate to the Fund, which provides the collateral for the initial encumbrance of the real estate. In this way, the borrowers protect the investor against the first 50% of the net present value losses of an investment in a single real estate object.
Mister Smith is paying interest on the mortgages to the fund. Smith is the owner of the real estate and is therefore 100% liable to upside/downside for any changes in the value of the real estate, plus of course all net rentals from the real estate. Fund subscribers are paid the Fund's liquid assets (i.e. borrowers' interest on mortgages) less administration charges.
You will find a condensed summary of the funds on the following slidedeck. It provides opportunities for an investor to take part in the accrual of proceeds from mortgages backed by a first fee against UK home ownership. Credit/rating relations are a ceiling of 55% at individual housing and 50% overall at mutual funds levels.
Investor enquiries for buy-to-lease real estate in the UK continue to rise, as does mortgage loan enquiry. A strict loan management regime is applied by a Loan Board to guarantee a strict personal evaluation of loan suggestions, which includes the verification of a market standard appraisal by a professionally trained appraiser certified by CICS.
Credit is not granted until all requirements have been met. Our lawyers examine the claim to ownership, supervise the performance of the credit and mortgages contracts, and record the first encumbrance on the fund. The fund's return is not correlated with ordinary investments focused on focusing on the markets by virtue of its investments in a diverse portfolio of mortgages backed by high-quality UK housing.
As well as an initial encumbrance on the real estate to which mortgage-backed credits refer, a limitation on the borrower's ownership of the real estate in question will be entered in the UK Land Registry (in relation to real estate in England and Wales) in favor of RBC as depositary of the RAW Equity Fund.
Therefore, the real estate may not be resold without the approval of RBC. Only after receiving a commitment from the seller's attorneys to assign the principal amount of the loan as well as any charges and interest arising from the disposal of the real estate to an escrow bank supervised by RBC as depositary of the RAW Hypothekenfonds will RBC agree to the disposal of the real estate.
Loan redemption will be made to a specific bank named by the Fund in the name of RBC. from the Fund and may also be used before the use of principal in the Tier 1tfolio. It will aim to reinvest most of its assets in a diverse range of mortgage-backed loan assets, all backed by an initial regulatory burden on UK and Channel Islands housing.
These portfolios account for 80% of the fund's net asset value. Most of the credit is granted by the administrator and is securitised for London and South East England housing at a prudent loan-to-value ratio. By far the largest part of the credit is securitised on real estate in key housing areas with a value of less than GBP 1 million.
For each individual credit, the Fund has fixed a ceiling of GBP 2,5 million, while the value of the real estate is GBP 5 million or less. There will always be a first regulatory burden on the fund. RAW's Hypothekenfonds bundles the equity and source of the investor, evaluates and carries out mortgages backed credits and diversifies the opposite party risks for the entire group of shareholders.
If the credit allocation is considered conservative, this should lead to a very low level of defaults and thus to a steady yield for the fund's fund managers. Investment funds will be distributed across a large number of credit facilities with a wide spectrum of properties and different location. In contrast to many other peer-to-peer credit markets, this diversity contributes to limiting the likely downward trend and spreading shareholder exposure.
This fund focuses on the provision of mortgage-backed loan financing, taking into account alternative options in the alternative markets. First, it is likely that borrower targets will be non-British residences wishing to buy high value British and Channel Island properties on a buy-to-lease relationship. It may also attempt to acquire mortgage-backed loan assets through platform deals.
It will mitigate the downward exposure by concentrating on the granting of mortgages backed by high-quality collaterals and contract protections, as well as a screening of each loan application, borrowers and real estate collaterals. Risks are distributed across a broad spectrum of exposures, with liabilities protected against a variety of real estate.
Mean loans to real estate appraisers do not exceed 50%, with an upper limit of 55% for single real estate objects, on the basis of an impartial appraisal of the real estate at the point of lending. In order to cushion loss of principal in the fund, e.g. from provisioning for impairment risks, a contingent provision can be formed.
This fund assumes that the average repayment period will be between three and seven years. While the Fund reserves the unconditional right to make investment for short or long terms, at least 75 per cent by value of aggregate credit is granted for a period of seven years or less.
Every borrowing party pays the fund interest on mortgages on a recurring basis. If interest yields increase, the investor will profit accordingly from higher yields. The Fund will retain part of the Fund's holdings in more liquid securities in order to preserve the Fund's overall solvency, comprising currency or close proximity to currency and securities backed by underlying solvency.
Our goal is to keep 20% of the fund's net asset value in this fund although it can also be used in the core fund before it is used. An objective of 10% of the Fund may consist of bank liquidities, investment in liquidities including the RAW Sterling Liquid Fund and investment in other liquidities.
An additional 10% may be deposited in mutual share trusts, mutual share trusts or undertakings investing in collateralised credit or other fixed property. RAW's Hypothekenfonds seeks to match saving savers with mortgagors, in the same way that a building society could do, but through a mutual funding scheme where the investor receives most of the returns from them.
This fund provides a high return proposition for an investor through either banking or low exposure low yield assets. Now, it seems that credit is more prudent for financial institutions, sometimes regardless of logic such as length of relationships, ages, security or maturity. Such changes have led to a significant shortfall in the new lender markets as borrower frustration has increased.
The buy-to-let real estate investor has found it more challenging to lend and many conventional lenders in the industry have either cut down their appetites or retreated outright. As a result of these changes, the RAW Equity Fund has been able to find niche opportunities in the mortgages markets that are no longer occupied by conventional lenders but still provide low equity exposure and sound returns.
The Fund's aim in excluding conventional credit establishments is to favour both the investor and the borrower by significantly narrowing the gap between deposits and interest rate differentials. Conservative lendings by the Fund will be conservative and the overall expected LTV is not expected to surpass 50% of the Fund's credit exposure.
With over 30 years industry expertise in the bank and finance sector, Tim has extensive expertise in the mortgages credit industry, a processor employing more than 800 staff and working in close collaboration with treasuries to secure and securitise credit. For 5 years Tim was MD of the Barclays Wealth International Bank and developed extensive mortgages on London real estate.
Most recently, Tim was Managing Partner of a multinational trust, mutual and pension investment company and Managing Partner of a number of real estate related companies, among them two real estate investment trusts, one of which is traded on AIM, and a major London refurbishment with high quality housing.