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Realm Capital Series Fund

What is the Realm Capital Series Fund?

Realm believes there is a role for a High Yield allocation in your portfolio, but there are good times to invest and not so good times to invest in this sector. We do not believe High Yield investing should be done in an isolated, open ended managed fund. During times of market volatility, investors tend to want liquidity at the very time a high yield manager should be allocating to the market. We believe High Yield investing is better achieved by a series of investments in credit opportunities, with the client agreeing to commit funds for a pre-determined period. This gives the manager certainty of time to manage the opportunities they identify with the potential to increase returns and reduce volatility. The Realm Capital Series Fund (RCSF) is a vehicle to provide high conviction investment opportunities in the Australasian credit markets for non-institutional investors. These investment opportunities exist due to certain market conditions which are driven by either changing regulation or market dislocation.

Realm Capital Series 2018-1 Units

Investors can benefit from a concentrated portfolio of opportunistic domestic fixed income investments providing exposure to high yielding securities, whilst focusing on capital preservation and the potential for a target return of 4.75% over cash.

Learn more about the Realm Capital Series 2018-1 Units in the below interview with the Portfolio Managers


The Opportunity

Realm Capital Series 2018-1 Units, the first investment available via the Realm Capital Series Fund will focus on a structured credit opportunity, with the strategy taking advantage of a new regulatory environment driven by APRA's Policy Statement 120. APRA's new policy impacts the capital requirements around Residential Mortgage Backed Securities (RMBS) as well as the introduction of an Australian Bank Levy. Realm Investment House (RIH) believe that APRA's policy statement will increase general capital requirements for the non-bank sector and smaller credit unions. Banks are the current senior funders for mortgage and corporate debt facilities and an estimated additional $3bn of new capital is required for the mortgage market under the new regime. RIH also anticipates that the bank levy introduction will drive an increase in major bank RMBS issuance and increase the proportion of lower rated corporate debt in the market.

Investment Strategy

The Realm Capital Series 2018-1 Units investment strategy focuses on balance sheet funding and bank warehousing contracts. RIH will partner with the four major banks and best of breed non-bank corporate lenders, to acquire exposures in these newly capitalised facilities. RIH's assessment of the opportunities will generate good risk adjusted income returns, particularly when compared to the 'public term out market' for the same level of risk. Diversification within the fund will be achieved by diversity of banking partners, facility sponsors and the number of individual facilities. RIH's risk management and assessment overlay are used in assessing eligible exposures. This process is described by researchers as superior to RIH's competitors. RIH will actively manage & monitor the risk of each funding facility exposure during the term of the fund.

For further information please refer to the flyer, located on the right under DOWNLOADS. Additional adviser information can be obtained by contacting Kate McDermott, Head of Distribution on Kate.m@realminvestments.com.au or +61 412 260 095.

Realm Capital Series Fund