The Personal Loans Unit Trust will increase simplicity, liquidity, diversification and access for all of SocietyOne’s wholesales investors.
The trust will provide investors with a monthly income stream and will invest in a diversified portfolio of SocietyOne’s fixed rate unsecured personal loans and includes a mechanism to smooth earnings.
Chief executive of SocietyOne Mark Jones said the trust model was another example of how the company was constantly improving the funding experience for their customers.
“We believe this new unit trust model will help to significantly simplify the experience of investing in our portfolio of personal loans and provide investors with greater access to this asset class, consistent interest payments and enhanced liquidity options after 12 months,” he said.
The trust will target $25 to $50 million in assets under management with a return of 6 per cent per annum, with any proceeds above this targeted return to be passed on to investors.
The trust is able to smooth volatility in the earnings profile of the portfolio of loans by paying returns above the monthly crediting rate which can be rebated to the trust during later periods to achieve a consistent return.
Chief investment officer at SocietyOne John Cummins said the design provided investors with greater access and liquidity which also delivering solid returns.
“The market has also evolved, with investors now wanting a more simplified structure and means to invest in this asset class, rather than having to make many smaller investments in individual loans.
“This is an issue that the trust resolves, while simultaneously providing the same above-average returns,” he said.