Financial services group Australian Unity Investments (AUI) has responded to investor demand and begun to wind up its High Yield Mortgage Trust (HYMT).
The trust will start returning all remaining capital to investors through regular payments. It has already returned 48 per cent to investors through periodic redemption facilities. The remaining 52 per cent was expected to be returned periodically until late 2014, AUI chief executive David Bryant said.
"We're just responding to investor demand on this. Investors have been telling us that they are after liquidity and by winding the fund up we believe it will provide certainty for investors around getting that liquidity," AUI general manager of property, mortgages and capital markets Mark Pratt told InvestorDaily.
"The next steps for us really are that investors are going to get 10 per cent of their investment paid back to them before Christmas and we intend to make another 5 per cent payment by March.
"Subject to the loan book that supports the mortgage trust, we'll come to full maturity over the next two years. As those lines are refinanced and moved on, we'll return investor liquidity."
AUI will make an initial payment to investors before Christmas of about 10 per cent of investors' capital. A second payment of around 5 per cent will be made in March next year, and AUI expects to continue making regular payments on a six-monthly basis from September 2012. It anticipates the fund will be fully closed by the end of 2014.
"We believe this decision is in the best interests of all investors in this particular trust in light of the investment environment since the global financial crisis (GFC)," Bryant said.
"The government's bank deposit guarantee, seen as necessary because of the GFC, had the unfortunate side-effect of triggering a rush of withdrawals from mortgage funds, forcing most to freeze redemptions.
"Following this, we have continued to see persistent demand for liquidity from investors in the HYMT and given the continued rate of redemptions, we believe that the most responsible action is to formally terminate the trust and return the balance of the capital to investors."
