Romspen Delivers Solid Absolute and Comparative Performance in 2017.
TORONTO, June 7, 2018 /CNW/ - Romspen Mortgage Investment Fund, a leading non-bank mortgage lender specializing in commercial and industrial real estate, today released its financial statements for the year ended December 31, 2017. For 2017, the Fund had a 7.9% net yield, reflecting both a strong absolute return and continued significant comparative outperformance against the major fixed income benchmarks. While slightly below last year, it was achieved in a year with significant geopolitical events, a competitive lending environment and continuing low interest rates.
2017 Highlights
"Completing its 51st year in business in 2017, the firm has a strong history of growth, broad diversification across North America and a solid and consistent investment track record," says Mark Hilson, Managing General Partner of Romspen. "We have a long established track record of delivering steady and predictable returns. Romspen has generated positive returns each and every month over the past 20 years typically outperforming the major benchmarks across a broad spectrum of economic conditions and cycles".
2017 Results of Operations
Revenues for the year were $161 million, compared to $138 million for 2016. Current year revenues are higher due to growth in size of the mortgage portfolio. For 2017, Romspen recorded net income of $115 million, or $0.61 per unit, compared to $100 million, or $0.66 per unit, in 2016. Investors held units totalling $2.1 billion, compared to $1.6 billion last year. Net debt (debt less cash) was $10 million, compared to last year's level of $116 million.
Comparative Performance
During 2017, Romspen's net compounded yield of 7.9% significantly outperformed T-bills (0.7%) and FTSE/TMX?STBI (0.1%), but trailed the S&P/TSX (9.1%). The following table presents a comparative performance history reflecting Romspen's consistent outperformance against the benchmarks.
Comparative Performance History
Comparative Cumulative Compounded Performance Yields | |||||
1 year |
3 years |
5 years |
10 years |
20 years | |
Romspen |
7.9% |
26% |
46% |
121% |
481% |
S&P/TSX |
9.1% |
21% |
51% |
58% |
290% |
FTSE-TMX STBI1 |
0.1% |
4% |
9% |
36% |
115% |
T-bills |
0.7% |
2% |
4% |
9% |
59% |
Note: Romspen returns are net, comparative returns are gross. 1Yield/return, as used herein, is calculated based on net compounded monthly cash |
Investment Portfolio
At December 31, 2017, the net investment portfolio was $2.0 billion, compared to $1.7 billion in 2016, representing an increase of 19%. The Fund realized losses of only $2.0 million on mortgages that were previously reserved for, ensuring that there was no negative impact on net earnings from these losses. Total provisions for credit losses increased to $63.2 million as the Fund seeks to maintain a comfortable margin of safety.
The Fund continues to focus on short-term mortgages, with 84% of mortgages maturing within one year, and 98% maturing in less than two years. Geographic diversification continued, with 26% of mortgages invested in Ontario, 26% in Western Canada, 9% in other provinces, and 39% in the US. The weighted average interest rate of the mortgage portfolio was 10.6% in 2016, compared to 11.2% to last year.
2017 Distributions
Unitholder distributions for 2017 were $0.76 per unit, compared to $0.77 per unit in 2016. This equates to a compounded net yield to investors of 7.9% compared to 8.0% in 2016.
About the Fund
Romspen has a long-term track record of successful mortgage investing. With its origins in the mid-60's, Romspen is one of the largest non-bank commercial/industrial mortgage lenders in Canada with a portfolio in excess of $2.0 billion. Our investors are high net worth individuals, foundations, endowments and pension plans.
The Fund's investment mandate is focused on capital preservation, strong absolute returns and performance consistency. Romspen has had 20 consecutive years of positive net investor yields (ranging between 7.4% ? 10.6%) with positive returns each and every month.
The 2017 Romspen Mortgage Investment Fund Annual Report, including the Trustees' Report, Management's Discussion & Analysis and the audited Financial Statements, are available at: www.romspen.com.
This press release is for informational purposes only. It is not investment or financial product advice, and is not intended to be used as the basis for making an investment decision. This press release is not, and does not constitute, an offer to sell or the solicitation, invitation or recommendation to purchase any securities in any jurisdiction. An offering memorandum containing important information relating to the Fund has been prepared, and the Fund is available only to investors who are "accredited investors" or otherwise qualify under certain other exemptions from prospectus requirements under applicable securities laws. Copies of the offering memorandum may be obtained from Romspen.
SOURCE Romspen Investment Corporation
These press releases may also interest you
|