February 13, 2024

Merricks Capital Partners Fund Portfolio and Market Update January 2024


Soft Landing

The Merricks Capital Partners Fund (the Fund) returned 0.8%* in January and 10.1%* on an annualised basis since inception. The Fund declared an interim distribution of 4.0% on 31 January, which will be paid in the third week of February 2024.

January saw record highs in US equity markets amidst challenged economic conditions in China, with the Hang Seng Index trading at near-GFC lows. Australian retail spending data for December revealed a subdued performance, registering one of the weakest monthly results in the four-decade history of retail sales data. The December 2023 quarter also saw a notable decline in Australian job numbers (65,000 decrease reported on 30 January), highlighting the challenge central banks will face in 2024 of attempting to navigate soft landings without significant job losses.

One new loan settled during the month, a 1.2% allocation, funding a mixed asset collateral pool valued at more than $500m. The loan funded the settlement of Victorian rural and residential properties.

One loan repaid during the month, a 1.1% allocation for the Fund secured against two large-scale grazing properties in the Northern Territory. Repayment of the loan was from the sale of these two properties that transacted in line with our valuations for the assets to fully repay senior debt.

Currently, we have over $900m of potential commercial real estate investments under term sheet or in due diligence, including $400m in residential and $500m across mixed-use, hotels and retail. In addition, we’re in due diligence on $150m of specialised industrial and infrastructure projects and $210m of agricultural investments, covering dairy, cropping, farmgate horticulture and beef cattle.

*These returns are stated net of fees and costs

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