First Source, in the fund structure inclusive of full fund fees and projected expenses, has generated average Net Return of 9.3% per annum in 13 years of operations.
Net Return’ is calculated as follows: [interest income (dollar-weighted average mortgage face rates in the fiscal year) plus fee income (including commitment fees, late payment penalty, pre-payment penalty, discharge fees) less 1.) actual loan losses incurred, 2.) Class F unit GP Priority Distribution of 1.75%, 3.) estimated fund expenses 0.25% and 4.) performance compensation for each fiscal year] divided by average assets under administration in that fiscal year. The Average Net Return for 2007-Present is the simple average of each fiscal year 2007-2019.
The mortgage investments used in this performance data were not held in a fund or similar pooled investment vehicle, and hence the above data does not purport to be a hypothetical illustration of how the First Source Mortgage Funds could have expected to perform over this period. Rather, the above data indicate the historical track record of the principals of the manager. Past performance may not be repeated and is not necessarily indicative of future results.
Fiscal year: December.
First Source currently manages 29 mortgage investments totalling $159 million, including Fund assets of $77 million.
Average Mortgage Metrics
data as of December 31, 2019
In an A/B structured loan, two lenders take part in the same first mortgage. The A lender holds a priority or senior position to the B lender and accepts a lower rate for the portion that it funds. The B lender is subordinate to the A lender and receives a higher rate for its portion. The B Lender benefits by participating in a higher quality, lower risk loan that, without structuring, commands an interest rate outside its investment parameters.