The opportunity

A core, sustainable income-producing asset class targeting net returns of >8% p.a. Invest in first mortgage mid-market loans that have been credit-approved and settled by Australia’s largest non-bank commercial loan servicer. Demand remains high for first mortgage loans in the sub-$50m commercial real estate sector but the banks have retreated due to funding constraints. Low supply and strong demand creates a significant opportunity for new sources of loan capital.

About the manager

Balmain Investment Management Pty Limited (Balmain) is the institutional funds management arm of the Balmain Group, Australia’s leading non-bank secured private debt group. The Balmain Group has been operating for over 30 years with a sole focus on commercial real estate debt. Balmain is one of Australia’s largest and most experienced secured private debt fund managers. The Group is also the largest distressed debt portfolio manager in Australia currently overseeing more than $6 billion in loan assets on behalf of a variety of investors including Goldman Sachs, Morgan Stanley, Blackstone and Deutsche Bank.

About the strategy

Protection of investor capital is paramount in a strategy that focuses on borrowers with a proven track record that are known to the manager. The strategy favours mis-priced loan opportunities in multiple lending categories, with a target return of >8% p.a. (net) and a target loss given default of less than 0.50%. Balmain has capacity to build an enduring program with a significant yield premium to equivalently rated corporate debt.