About CMCC Capital Fund
The CMCC Capital Fund is a $66 million mezzanine and equity fund designed to generate a minimum 15% annualized return to investors. The Manager, Canadian Mortgage Capital Corporation ("CMCC"), is an organization with tremendous real estate depth, industry contacts and experience in dealing with mezzanine & equity investments. The Manager invested $4.1 million of the committed capital of the Fund.
CMCC has sourced and syndicated over $200 million in joint venture and mezzanine investments since 2001. This includes two pooled limited partnerships aggregating $95 million in committed capital across 20 investments. Both funds were co-managed with Dream Unlimited. The first fund, which is fully repaid, yielded an internal rate of return of more than 22%, net of all management fees. The second fund, which is fully subscribed and 85% deployed in its third year of operation, is forecasted to yield 20% before management fees. A summary of these transactions can be downloaded here.(link to pdf file, please see investment summary here.
Why Invest with CMCC Capital Fund?
The CMCC Capital Fund intends to focus its investment activities where the Manager has local operations and where we feel the real estate markets are strongest at the present. Compelling reasons to invest:
- Long track record of successful investments in residential and commercial real estate.
- Ability to capitalize on established client relationships.
- Significant financial commitment of the Fund Sponsor.
- Investments will be restricted to major metropolitan centres.
- CMCC has four offices across Canada and a local presence in all of the target markets, a unique attribute among real estate equity funds in Canada.
- Local presence gives the Fund an advantage to quickly identify and source the most attractive opportunities in those markets.
The Fund Sponsor
The Fund Sponsor, Canadian Mortgage Capital Corporation is a major mortgage brokerage company with well-established lending and mortgage servicing operations in Toronto, Ottawa, Calgary & Vancouver. The two largest offices are in Toronto and Vancouver. Most of CMCC’s business revolves around three activities:
- (i) managing a $560+ million non-bank lender, Atrium Mortgage Investment Corporation (TSX:AI),
- (ii) originating and managing mezzanine and equity investments, and
- (iii) mortgage servicing and administration for institutional and non-bank lenders.
Atrium Mortgage Investment Corporation, a national non-bank lender, has assets of approximately $560 million and is traded on the TSX under the symbol ‘AI’. Atrium was founded 15 years ago and has grown steadily throughout its history. The company has consistently generated dividends to its shareholders of 8.5% to 10% per annum. Since its inception, Atrium has funded more than $1 billion of real estate loans and has had only $700k of interest losses (7 basis points) and no losses of principal. In 2012, Atrium went public with a listing on the TSX. Since then, it has raised approximately $290 million of equity and convertible debentures.
CMCC has in-depth expertise in structuring mezzanine financing and joint ventures, and has cultivated long-term relationships with top developers and real estate investors. CMCC has always had a loyal investor group that have funded more than $200 million of mezzanine and equity loans in the past 10-15 years. In most cases, CMCC or its principals have invested in the project with the investor group. The internal rates of return from these investments have averaged more than 18%-20% per annum, with no investment resulting in a loss of principal. These impressive results are based on a philosophy to only invest in markets where CMCC has local knowledge, to underwrite transactions conservatively, and to mitigate as much risk as possible.
Five of the Managing Directors at CMCC each have more than 25 years of lending experience and have long established developer relationships. Most of CMCC’s Managing Directors have also previously held senior positions at major financial institutions.