Invest in Australian
Private Credit
Msquared Capital is a trusted private credit provider. It sources and evaluates quality borrowers needing finance and matches them with funding from one of our three investment vehicles.
Income Generation
& Diversification
Msquared Capital provides investors with unique access to the Australian private credit market through the provision of registered mortgage investment opportunities, which aim to offer competitive income generation, diversification, and capital preservation. Speak directly to the decision makers to begin your journey into private credit today.
Products
Investment Products
Msquared Mortgage
Income Fund
Invest in a diversified portfolio of first registered mortgage investments. The Msquared Mortgage Income Fund has a maximum LVR of 70% for any given loan, and will not have exposure to vacant land, construction, or development loans.
*In September 2024, the Fund returned 8.00% p.a. on an annualised basis, with a Weighted LVR of 53.84%.
Msquared High Yield
Mortgage Income Fund
Invest in a diversified portfolio of mortgage investments aimed at ensuring the Fund delivers a higher return for investors. The Msquared High Yield Mortgage Income Fund has a maximum LVR of 80% for any given loan, which includes shorter-term loans with limited exposure to vacant land, construction, or development.
*In September 2024, the Fund returned 10.35% p.a. on an annualised basis, with a Weighted LVR of 67.81%.
Msquared Contributory
Mortgage Income Fund
Curate your investment portfolio by investing in individual loan opportunities that suit your risk profile. The Msquared Contributory Mortgage Income Fund assesses LVRs on a case-by-case basis, with limited exposure to vacant land, construction, or development. The Fund targets a net return between 8.00% p.a. and 14.00% p.a.
Investments in Msquared’s products are not bank deposits and investors risk losing some or all of their capital. *The performance of any Msquared fund and any specific rate of return is not guaranteed. Past performance is not indicative of future performance. †The payment and frequency of distributions is not guaranteed. Investors should consider the relevant fund’s Constitution, Information Memorandum (particularly the Risks section) and relevant Loan Memorandum before making any decision to invest in any fund. Disclosure documents are issued by Msquared Capital Pty Ltd ACN 622 507 297 and Msquared Capital Funds Management Pty Ltd ACN 644 643 274.
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Lending Process
The Lending
Process
Since inception, each Fund has paid monthly distributions, and all loans have been repaid in full. Msquared Capital applies a robust and disciplined credit approach which focuses on five key areas, known as ‘The 5Cs’:
01 Character
Msquared Capital conducts extensive background checks on the prospective Borrower to help ensure we are lending to someone of good character. We undertake searches demonstrating their past behaviour in relation to prior debt obligations, their repayment history, as well as personal and professional reputation.
02 Capacity
A clear exit strategy for the proposed mortgage must be established early in the credit review process. This may include refinancing to another lender at the end of the loan term, or sale of the security property. Another critical consideration is the prospective Borrower’s net asset position relative to the loan amount.
03 Cashflow
04 Collateral
Proposed security properties must be assessed based on the worst-case scenario of Borrower default. This means that the Loan-to-Value Ratio (LVR) should be carefully selected so that recovery in the event of default will be achievable. The quality of the security property, its geographical location, its saleability, and existing security interests on it, are critical factors in Msquared Capital’s assessment of the collateral to a proposed loan. In addition, Msquared Capital engages reputable third parties, including approved valuers, whose reports are thoroughly reviewed before approving a loan.
WHAT OUR PARTNERS SAY
MSquared Capital
In the media
- Brokers, Investors
Our Managing Director, Paul Myliotis was invited by Miranda Brownlee to write a piece on what accountants and their business clients should consider when choosing private credit for Accounting Times. At Msquared Capital we help accountants solve problems for their clients by offering them a tailored financing solution that goes beyond the capabilities of traditional […]
- Investors
In response to financial adviser demand, we are delighted to announce that the Msquared Mortgage Income Fund and the Msquared High Yield Mortgage Income Fund are now available on the Netwealth platform. Financial advisers seeking reliable sources of monthly income for clients from private credit now have an additional way of accessing Msquared Capital’s investment […]
- Investors
As the RBA and US Fed both kept interest rates on hold last month, the ASX 200 and S&P 500 continue to levitate at record highs. The headline US inflation figure came in at 3.2% over the year in February, only 0.1% higher than market expectations. If we compare this to a few years ago, […]
- Investors
We are delighted to announce that the Msquared Mortgage Income Fund has received a ‘Favourable’ rating from SQM Research. The fund has a diversified portfolio of first mortgages secured by real estate and has no exposure to land, construction or second mortgages. For more information or to receive a copy of the report, please contact […]
- Investors
We are pleased to announce that the Msquared Mortgage Income Fund and the Msquared High Yield Mortgage Income Fund are now available on the Mason Stevens platform. This provides financial advisers with another way to access our funds and enable them to invest in products which can deliver regular monthly income to their clients.
- Investors
Msquared Capital is delighted to confirm that Evergreen Consultants has reviewed both the Msquared Mortgage Income Fund and Msquared High Yield Mortgage Income Fund and rated them both as Investment Grade. Watch the video to see Paul Miron, Msquared Capital Managing Director, discuss the funds with Evergreen Ratings’ Founder Angela Ashton. Please contact as at info@msqcapital.com.au […]
- Investors
As 2023 draws to a close, we are presented with an opportune moment to reflect on a year marked by economic resilience and a transformation of our economic environment that has not been seen for decades. We continue to push through the complex circumstances presented by the post-COVID recovery, remaining inflation, and the aggressive array […]
- Investors
Msquared Capital Managing Director, Paul Miron, speaks with David Koch on ausbiz to discuss the latest developments in private credit, the economy, and how Msquared is positioning our funds accordingly.
- Investors
The most recent inflation figures, both here and in the US, reinforce that inflation is here to stay, with US inflation having risen to 3.7% in August 2023 (up from 3.2% in July 2023), and Australian inflation remaining elevated at a rate of 5.2% in June 2023. At the same time, expectations of higher oil […]
Frequently Asked Questions
Retail v Wholesale investors in the provision of Financial Services
01 What are the major differences between retail and wholesale investors?
- Retail investors must be provided with a Financial Services Guide (FSG), Statement of Advice (SOA) and where appropriate, a regulated offer document such as a Product Disclosure Statement (PDS)
- Retail investors have access to external dispute resolution schemes, while wholesale investors generally do not
- Retail investors are afforded all the consumer protections contained in the Future of Financial Advice (FOFA) reforms
- Wholesale investors can access a wider and more complex range of investments and products, which may have an enhanced risk profile
02 What is the rationale for the distinction?
03 Does this mean wholesale investors are not afforded any protection?
- Although wholesale investors do not have the same protections as a retail investor under the Corporations Act 2001 (Cth) (Act), general law duties still apply so that all investors (including wholesale investors) are owed a fiduciary duty by the Australian financial services licensee who is giving advice or providing a product or service.
04 What is a retail investor?
- The basic proposition in the Act is that all investors (or potential investors) are retail, unless an exemption applies. Therefore, a “retail” investor includes anyone who does not come within the definition of a “wholesale” investor for the purposes of providing a financial product or financial service under section 761G(5), (6), (6A) or (7) or section 761GA of the Act.
05 What are the exemptions to being classified as a retail investor?
There are several ways in which an investor can be exempt from being classified as a retail investor. A general summary is set out below.
1. Price/value test
A person or entity invests where the entry price is $500,000 or more.
2. Net assets/income test
A person or entity has obtained an accountant’s certificate from a qualified accountant stating that the client:
- has net assets of at least $2.5 million, or
- has a gross income for each of the last two financial years of at least $250,000.
Once a certificate has been obtained, it is valid for a period of two years.
3. Professional investor test
Section 9 and 761G(7)(d) of the Act defines a professional investor, which includes (amongst other things):
- financial services licensees
- bodies regulated by APRA
- superannuation funds, and
- a person or entity who controls gross assets of at least $10 million (including any amount held by an associate or under a trust that the person manages).
