FAQs:

2. How are Merx’s interests aligned with investors?

At Merx, we believe in putting our money where our mouth is. The Fund was created through the management teams shared personal loan investment portfolios coming together under a shared structure.  Our management team continues to invest their own funds alongside our investors in the Fund. This means that we share the same risks and potential rewards. Our interests are directly aligned with investors, fostering a true sense of partnership, transparency, and accountability.  

3. Is there a minimum investment amount?

There is no stated minimum investment amount. However, most investors choose to start investing with us with around $200,000 and build from there.

4. How are distributions made?

The Fund makes distributions monthly to investors. Investors can choose to have distributions paid out monthly or reinvested to their investment account.

5. How flexible is the entry and exit process?

We understand that circumstances change, so we’ve built flexibility into the Fund. Subject to funds being available, Investors can choose to:

• Set up a standing order to withdraw reinvested returns, with no exit fee.
• Redeem units without an exit fee, provided you give six months’ notice.
• Redeem units within the six month notice period and incur an exit fee of 2.5% of the withdrawal amount.

This flexible structure ensures investors can manage their investment according to changing needs, without being locked in long term.

6. Is the Fund PIE qualifying?

The Fund operates under the Portfolio Investment Entity (PIE) regime. This can be very tax-efficient for investors in higher tax brackets. With the PIE structure, the tax rate on returns is essentially capped at 28%. We recommend our investors consult their own tax specialist before investing to make sure this structure is right for them.

7. How does Merx secure its investments?

Security is a top priority for us. Before we approve any loan, we take a deep dive into the borrower’s track record, assess market conditions, and make sure there’s some security backing the loan. In most cases, that security is property. So, if anything goes wrong, there’s some security in place to protect our downside.

8. How does Merx assess whether to lend to a particular borrower?

With more than 20 years of lending experience, we have built a thorough process for efficiently assessing loan investments. We’re thorough when it comes to choosing who we lend to. We search many data points and look closely at a borrower’s history, financial health, and experience in their field. We also make sure the security being offered, like property or other assets, meets our standards. On top of that, we review a borrower’s plan and projections to make sure we have a path to repayment.

9. What is Merx’s process if things go wrong with a borrower?

All investments contain an element of risk. Sometimes, things don’t go to plan. At Merx, we have a robust system in place for monitoring and managing loans. If a borrower falls behind, our systems immediately flag the delinquency, and we escalate the issue with a structured follow-up process. This includes reminders and direct communication with the borrower to resolve the issue early on.

If the situation becomes more serious, we have a specialist team that steps in, which includes lawyers, debt collectors, and other professionals experienced in recovering funds. Our priority is always to take action and efficiently to protect our investors’ capital and minimise any potential losses.

10. How can I invest in the Fund?

To invest in Merx Wholesale 1 PIE Trust, you must qualify as a Wholesale Investor as that term is defined in sections 3(211a) – (c) or 313(a) of Schedule 1 of the Financial Markets Conduct Act (“FMCA”). See below for more on Wholesale Investors.

As a Wholesale Investor, getting started with the Merx Wholesale 1 PIE Trust is simple, just reach out to us at fundgrowth@merx.co.nz or 09 215 9364. We’ll walk you through the process and talk through your queries in detail.

Note: This article is intended to provide general information and does not constitute financial advice. We recommend you speak with a financial adviser for advice tailored to your individual circumstances. Potential investors with Merx must qualify as Wholesale Investors as that term is defined in sections 3(2)(a) – (c) or 3(3)(a) of Schedule 1 of the Financial Markets Conduct Act (“FMCA”). The Trust is not suitable for retail investors.