Investment Week revealed TwentyFour Asset Management is aiming to raise £200m through a placing and open offer on the London Stock Exchange, which is expected to close by the end of June and begin trading in July.
The new product has an annual total return target of 7%-10% once fully invested, paying out quarterly dividends to shareholders, with the first year dividend expected to come in at 3p.
The fund will invest in legacy mortgage portfolios with strong observable performance histories and new portfolios with robust underwriting standards. The group aims to keep leverage conservative at around 4x.
The trust will have a management fee of 75bps or lower and an OCR below 1%, with no performance fee.
TwentyFour Asset Management said in a factsheet sent to potential investors: “RMBS and other forms of leverage have allowed traditional lenders to enjoy strong returns from their mortgage books and they have typically not given access to the equity part of these structures.
“However, with regulatory changes regarding leverage ratios and upcoming capital weighting reviews, the originators are under increasing pressure to sell these assets to third parties, allowing investors to buy large portfolios of UK mortgages for the first time.”
