At the end of Q2-2019, Romspen Mortgage Investment Fund (“RMIF”, “fund”) had $2.70 billion in gross mortgage receivables and investments (up 1% YTD) secured by 156 properties (98 active mortgages, 33 investments in subsidiaries and 25 properties in a US Master Mortgage LP / USMLP).
In H1-2019, approximately $0.38 billion in mortgages were advanced (down 27% YoY), and $0.42 billion were repaid (up 36% YoY). The fund invested an additional $0.09 billion in the USMLP in H1-2019.
We believe the fund’s risk profile has stayed flat relative to the 2018 year-end portfolio – a higher exposure to first mortgages (99% at the end of Q2) and lower duration were offset by higher exposure to construction loans (33%) and an increase in non-performing loans.
The fund had a realized loss of 0.29% of mortgages and investment in subsidiaries (net) in H1-2019, versus 0.24% in 2018 (full year).
The portfolio’s exposure to mortgages in the U.S. (47%) and B.C. (19%) increased, with a corresponding decline in Ontario (“ON” / 21%).
The Net Asset Value (“NAV”) was $9.91 per unit at the end of H1-2019, versus $9.96 at the end of 2018, reflecting a 0.5% decrease due to a $15 million loss in FOREX.
Investors’ received 7.5% in H1-2019, versus the 2018 full-year’s 7.5%. The annual return for investors has averaged 8.5% since 2006. We expect returns to stay at approximately 7.5% in 2020.
