Merx Wholesale 1 PIE Trust: Taking stock of the fund’s first year

The Merx Wholesale 1 PIE Trust launched in September 2022, and a few months later we decided to open it up to likeminded investors. One year into this journey, we talked with Merx’s managing director Andrew Dunning to reflect on the milestones achieved and the future of the fund.

The fund is gathering momentum

In setting up the Wholesale 1 PIE Trust, Merx management brought together their collective expertise to realise a shared vision: creating a fund they want to be invested in – now and in the future.

In its first year, the fund has been attracting a growing number of investors (currently nearly 30) and is gathering momentum. With core principles like alignment of interests proving to be sound, now it’s just a matter of fine-tuning.

“It’s still quite early for us in the fund structure, so we’re still testing, tweaking, and adjusting. But the fundamentals of the proposition seem to be very well-timed,” says Andrew. “This is in terms of both the nature of the loans we make to the business and property investment community, and yield and flexibility demands from our investors.”

Alignment of interests builds trust

Trust – it’s a key factor when choosing where to invest money, and Merx management knew that alignment of interests would be a substantial factor in fostering trust in this proposition.

“As managers, we invest our personal finances in the fund, and our families are also invested, says Andrew. “Having skin in the game means we don’t stand on the sidelines, but we are true partners here. This is quite uncommon in the investment landscape. I believe investors appreciate our personal commitment to the fund’s success.”

Having transparent goals and clear communication is also crucial. “We like to keep it simple and transparent: no jargon, no big words. We do what we say we’re going to do, and deliver it. So, you always know what to expect from the fund,” says Andrew.

Net returns are consistently higher than our target

At the time of this writing (October 2023), 12-month net returns sit over 20% – well above the 9-11% longterm target net returns that Merx management are aiming for. Of course, while past performance is not a guarantee of future returns, there’s no denying that these are outstanding results so far.

So, what has driven them? According to Andrew, their portfolio approach has allowed them to make the most of favourable market conditions (i.e., changing interest rates and the slowdown in credit access from the main banks).

“When Garrick [Wynne] and I met during post-graduate finance study, nearly 20 years ago, we were learning the fundamentals of risk and return. Now, as business partners and managers of the Merx Wholesale 1 PIE Trust, we’re applying the same principles to any loan investments we make,” says Andrew.

This involves assessing the overall return the investment is set to generate, then structuring the loan accordingly and monitoring it. “We also focus on maintaining a relatively short portfolio and keep the money moving, so that it’s working harder. The more times we deploy it, the more return we can generate, and that flows through to our investors,” says Andrew. “To put that simply, we know how to do the math and how to generate loan opportunities, and we do that.”

While the returns have been impressive, the goal remains to aim for steady growth, rather than big spikes. “We want to make lots of consistent, and safe bets. Over time, these smaller numbers compound.”

Looking ahead

So far, the Merx Wholesale 1 PIE Trust has engaged nearly 30 investors and helped more than 18 business owners and property professionals get their projects across the line. Talking about the upcoming year, Andrew has no doubt.  

“It’s rewarding when new investors trust our story and join us. Our plan is to continue on this path, get more investors on board and build some more scale, so we can help more business owners while also generating good returns for our investors,” Andrew says. “If this year has been about getting established, next year will be about growth.”

Like to become part of this journey?

The Wholesale 1 PIE Trust is a reflection of the management team’s own journey and personal commitment. If you’d like to become part of this journey, click here to learn more and give us a call on 09 215 9364 to discuss further. We look forward to hearing from you.

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.

30.99

%

Returns Since Inception

Returns based on an actual company investor account with net returns re-invested monthly. Past performance is not a guarantee of future performance. The fund was established 30 June 2022 and made its first investments in September 2022.

Why Invest with Merx

About the Merx Wholesale 1 PIE Trust: Structure, principles: management and more

Comments from Merx Investors

I have enjoyed investing with Merx and learnt a lot through the process too. Merx have been very transparent with what they do and the communication has been consistent. Wouldn’t be a testimonial without mentioning the returns too, thanks for those. Looking forward to being a part of the journey for years to come.

Luke

There's a lot to be said for a fund where the managers invest alongside their investors. It's a real partnership where the interests of investors are prioritised. The returns to date have been great, the unit structure gives me the flexibility I want, and I've been really impressed with the communication.

Aaron

I've been impressed by how Merx looks after their investors - from how the fund is structured for redemption, reinvestment, and tax efficiency - to the communication and care in understanding my investment goals. It makes a difference - investing alongside managers who are also invested in the fund.

John

Aligned Interests

Aligned interests is a core principle of the Merx Wholesale 1 PIE Fund. As the Trust’s management team, we personally invest alongside our investor partners. We have the same risks and potential returns as our investors.

Building an investment portfolio for the long term

Investor's Journey: Merx Director,
Andrew Dunning

The role of economic cycles in investment

Get the detail – fund description, management, fees, risks and more. Request the Merx Wholesale 1 PIE Trust Investor Brochure here.
Request the Merx Wholesale 1 PIE Trust Investor Application form here. Note: the fund is not suitable for retail investors.

Merx Wholesale 1 PIE Trust Returns

Year 1 actual net return (on company investor portfolio reinvesting)

20.13%

 

Average monthly distribution (annualized)

17.50%

 

Returns since inception

30.99%

Returns based on an actual company investor account with net returns re-invested monthly. The fund was established 30 June 2022 and made its first investments in September 2022. Past performance is not a guarantee of future performance.

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*Returns are net actual returns distributed to investors (annualized) – net of all fees and costs before tax. The fund was established 30 June 2022 and made its first investments in September 2022. Past performance is not a guarantee of future performance.

Investor Brochure

Important information for investors

Investment in the Trust is open only to wholesale investors as set out in schedule 1, clauses 3(2)(a)-(c) and 3(3)(a) (inclusive), or persons who are otherwise not required to receive disclosure under Part 3, of the Financial Markets Conduct Act 2013 (“FMCA”).

Investor Application

Important information for investors

Investment in the Trust is open only to wholesale investors as set out in schedule 1, clauses 3(2)(a)-(c) and 3(3)(a) (inclusive), or persons who are otherwise not required to receive disclosure under Part 3, of the Financial Markets Conduct Act 2013 (“FMCA”).