What is it called and what sort of savings product is it?
The $340 million Equitable Property Mortgage Fund is a group investment fund relaunched this week.
Who is the company behind it?
Equitable is a long-established property finance business, which is controlled by theSpencer family of Caxton fame. It has built its reputation around conservative lending policies.
Who is the target market?
The more conservative investor who is seeking income and not too much risk.
What return does it offer?
Its current 20-month rate is 8.85 per cent.
When was it launched?
The new fund is an amalgamation of three existing smaller funds, all of which had been in existence for some time.
What other products is it like, or what is it competing with?
This fund competes against other property-backed finance companies, but is at the lower risk end of the spectrum and only has first mortgages. Others, which have got into trouble have had second mortgages. They are much harder to realise if there are problems.
Is it long term, short term or medium term?
Funds such as this are more for the medium and long term, as opposed to short-term investments. Equitable currently has some special rates around terms of 20 months.
What is the unique selling point?
The amalgamation of the three funds means there is more backing for each investor. Also no impaired loans from the three funds will be included into the new one. Any loans that become impaired in the first 12 months will be topped up.
How strong a stomach do you need for it?
When it comes to a finance company operating in the property sector, Equitable is one of the safer options. It plans to seek a rating from Standard and Poor's this year.
What's the hitch?
Like any property fund the biggest risk is defaults from the borrowers. However Equitable, unlike others, has conservative lending policies.
