Lombard Launches New Mortgage Income Trust
Lombard Group Ltd has launched a new mortgage backed investment trust.
The Lombard Mortgage Income Trust (LMIT) aims to provide a regular income stream at a rate significantly better than bank deposits, with security spread over a number of properties.
There are no entry fees and all the interest earned after tax and expenses is paid to unitholders every three months.
The LMIT is a unit trust, which is managed by Lombard Funds Management Ltd, and the Trustee is the Public Trust.
Investors buy units in the trust and the money received by the Trustee is pooled and invested in mortgages over real estate. The mortgages are held in the name of the Trustee.
The minimum investment is $1,000, and further investments can be made of a minimum of $200 a month.
The chairman of the Lombard Group, the Rt Hon Sir Douglas Graham, also chairs Lombard Funds Management, the managers of the Trust.
"There is now the potential for long-term relationships between Lombard and its investors, who in the past have invested for fixed terms on specific property projects," Sir Douglas said.
Those opportunities would still exist, but investors were increasingly seeking a range of investment products and Lombard had moved to meet that need.
As mortgages were normally medium to long-term it was expected that investors would take a similar timeframe.
"We are taking a long-term view as a prudent lender with long experience in mortgage funding of residential and commercial development property," Sir Douglas said.
The General Manager and a director of Lombard Funds Management, Mr Douglas Burke, said the Trust's flexibility and generally lower and wider spread of risk than contributory mortgages would have significant appeal to investors looking for better than bank deposit returns.
The directors considered an intended return over time of 8% to be reasonable, before taxes and after expenses, however that was not a forecast or projected return, and the actual return may differ.