Why we avoid related-party lending

At the end of 2023, we took the opportunity to refine the establishment documents of the Merx Wholesale 1 PIE Trust. One of the key changes was our explicit stance against related-party loans.

While this has always been a standard in our approach, we have now made it very clear: the fund will not lend to Merx management or any other related parties. Here’s why we felt it was important to put this rule in writing.

Who are “related parties”?

Based on the Establishment Deed and the Financial Markets Conduct Act 2013 (FMCA), a related person in respect of the Manager means any of the following:

  • a related company of the Manager;
  • any director or shareholder of the Manager;
  • a relative of any director of the Manager;
  • any person in which a person referred to at points (b) and (c) has a material financial interest; or
  • any MIS, superannuation scheme, or other fund or scheme that is owned by, managed by or controlled by the Manager or related company of the Manager.

Why exclude related-party loans?

The reason is simple: at best, related-party loans give rise to potential conflicts of interest, which we want to avoid. At worst, as history has shown, they offer an opportunity for outright theft. 

Without naming specifics, some may recall past incidents in the financial sector where personal projects were funded with investors’ money, leading to misuse of funds. These examples serve as cautionary tales and reinforce our decision to distance ourselves from these practices. 

Our focus remains on lending to others, not to ourselves. By lending to a diverse group of unrelated business owners and property professionals, not only we can avoid conflicts of interests, but also spread our risk and optimise liquidity and yield. 

All in the name of transparency

Alignment of interests is one of the core principles of the Merx Wholesale 1 PIE Trust. With Merx management actively investing alongside our investor partners, we share in both the risks and rewards. 

Once again, in putting the “no related-party loans” rule in writing, we want our investors to know that our decisions are made with their best interests at heart. 

Like to join us on this journey?

Click here to learn more or 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.

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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”).