As the landscape of traditional investments becomes increasingly uncertain, savvy investors are turning towards alternative investment options to safeguard their portfolios and secure attractive returns. Recent statistics suggest a notable surge in the popularity of private debt investments, marking a shift in investment strategies in New Zealand’s financial market.
According to Pernell Callaghan, Managing Director of Finbase, private debt has emerged as a favoured alternative investment option for both seasoned investors and those looking to build their investment portfolios. Callaghan attributes this trend to several factors, including stagnant property returns, heightened volatility in the share market, and ongoing concerns over inflation.
“Finbase largely caters to wholesale investors, and there is a notable transition within this group. They’re divesting from residential and commercial properties to bolster their existing investments with secured debt opportunities,” explains Callaghan. “This shift underscores a growing recognition of the benefits of non-traditional assets and a desire to diversify investment portfolios in response to market volatility.”
Finbase offers investors a fixed return of 11 percent p.a. (less RWT), making it a great avenue for investors looking for regular, predicable returns. Investments are secured by first mortgages against saleable New Zealand real estate. To further reduce risk, investments are pegged at a conservative loan to value ratio of 60%.
Finbase’s first mortgage investments are also increasing in popularity because its monthly payment system provides a consistent income stream. This is a critical difference as most funds or financial products only pay on exit, this makes the company’s approach appealing to retirees and others seeking stable financial returns.
Investors see Finbase as a way to safeguard their portfolios against market turbulence. The company maintains strict lending policies to mitigate risks, Callaghan emphasises the importance of risk awareness.
“Every investor desires a trustworthy and reliable advisor, people want complete confidence in their investment partners. Good partners, like Finbase, provide opportunities and the information needed to understand the risk and opportunity, and also how they can capitalise on them. Risk is part of any investment, but I will also highlight our track record of zero investor losses.”
Callaghan, an experienced investment portfolio manager, says there’s also a growing malaise for traditional investment vehicles. “We have stock market volatility, a government that has yet to crystalise its plan for regulating property investments, global uncertainty in terms of war and potential market downturns, and ongoing uncertainty in the OCR and long-term bank interest rates. It’s no surprise people are looking for alternative asset classes with positive yields.”
Trust and reliability are paramount in the world of investments,” emphasises Callaghan. “Investors need to have confidence in their chosen financial partner, and Finbase remains committed to delivering consistent returns and protecting investor capital.”
Critically, the company says it’s made every interest payment to investors and has never suffered a loss of investor capital.
As wholesale investors find good value in first mortgage lending, Finbase is a trusted partner, empowering people to make investment decisions with confidence. If you are an investor seeking alternative opportunities, Finbase helps you to achieve financial success and transform the way you engage with your portfolio.
For more information, visit finbase.nz.
