Manchester Investments, established in 2009 and operating in BC, Alberta, Ontario and Quebec offers investors a diversified portfolio with a focus on residential first mortgages. The fund, which has $218 million in mortgages, with a most recent return rate of 6.72%.
Fund Fact Sheet December 2022 [Download]
Fund Details (as of December 2022)
- Fund Inception: 2009
- Minimum Investment: $10,000
- Annualized Return for 2022: 6.72%
- 5 Year Historical Average Return: 6.85%
- Mortgage Type: Residential (100%)
- Line of Credit: $150 Million
- Geographical Diversification: BC, AB and ON
- Term of Mortgages: 1-3 Years
- Total Number of Mortgages: 812
- Weighted Average LTV: 47.03%
- Average Mortgage Size: $268,000
- Portfolio Size: $218 Million
Historical Returns
Note: Manchester’s Year-End was changed to December 31 from FY2020 and onward.
Investment Objectives
- Earn our shareholders a NET return of 7.0%
- Maintain a weighted average Loan to Value (LTV) of less than 50% of the total mortgage portfolio.
Key Investment Policies
- All investments must be secured by mortgages.
- To have a minimum of 65% of the portfolio invested in 1st Mortgages.
- For 1st mortgages the LTV may not exceed 75%, for 2nd mortgages the LTV may not exceed 65%.
- All mortgages require an independent property appraisal.
- The term on any mortgage is not to exceed 2 years without approval of two directors.
- No more than 10% can be lent in the form of commercial mortgages.
Our Typical Investor Is Someone Who:
- Is interested in a consistent annual return with capital preservation in mind.
- Is interested in a regular income stream with limited volatility.
- Would like to have direct contact with the experienced Fund Managers that are investing along side them.
Tax Treatment
The fund falls under Section 130.1 of the Canadian Income Tax Act. It is a flow through investment and as such, pays no taxes at the corporate level so long as it distributes 100% of its annual net income.
The fund distributes 100% of its annual profits to its shareholders in the form of dividends. These dividends are treated as regular income for income tax reporting.
An investment in the fund is RRSP, RRIF, RESP and TFSA eligible.
Investment Strategies
The fund is one of the largest purchasers of private mortgages from Alpine Credits Ltd and Sequence Capital. The fund receives first look at all mortgages underwritten by these mortgage origination groups which have not been purchased by Ryan Mortgage Income Fund Inc.
Because of this relationship, the fund is well positioned to take advantage of a large percentage of this proprietary mortgage deal flow.
The fund maintains a line of credit with a major financial institution. The credit facility ensures the fund is fully invested at all times.