This article is from the Australian Property Journal archive
SQM Research has upgraded Alceon’s Debt Income Fund to its Superior – High Investment Grade rating for 2024, the second highest rating available.
The Debt Income Fund has been awarded a 4.25-star rating, indicating its “substantial potential to outperform over the medium-to-long term”, with the fund providing a consistent return of 8.66% annually since its October 2019 inception.
“The investment/lending process is thorough and robust. Significant due diligence on investments is undertaken, with independent property and construction industry experts engaged along the investment pipeline. A series of monitoring protocols are in place to mitigate default risk,” said SQM Research.
“The Fund is fully allocated to senior debt (first mortgages) and at relatively low/modest LVRs (maximum allowed is 65%), which means that the Fund is lower risk than some other Funds that have a lower allocation to senior debt & asset- backed debt and at relatively higher LVRs.”
Alceon’s fund has seen growth over the last year from $106 million in May 2023 to $193 million in May 2024.
With a three-year return volatility of 0.38%, the fund is diversified across 57 loan facilities, with 43 borrowers and 100% of the portfolio invested in first mortgages and senior debt, with a current weighted average LVR of 62%.
“Alceon focuses on originating well-secured senior debt positions with conservative LVR’s enabling us to provide our borrowers and development partners with greater speed, flexibility, and certainty compared to traditional real estate lending sources,” said Grant Atchison, head of funds management at Alceon.
“This approach also allows us to capitalise on current market dynamics and the reduced presence of traditional banks, ultimately delivering higher returns to our investors.”
