On behalf of our entire CMI team, we wish you and your family a very happy and healthy New Year! We hope you had an opportunity to enjoy some rest and relaxation over the holidays.
While the past year led us further into our post-pandemic recovery, it ushered in a new set of challenges as interest rates climbed and inflation soared. These conditions drove sustained demand for private lending and expanded opportunities for mortgage investors – a trend we expect to continue in 2023 and beyond.
2022: A brief recap
Investor concerns around the performance of fixed income assets were a defining theme in 2022. In the first half of the year, both equity and fixed income markets experienced negative returns simultaneously, leading many investors to question the value of owning bonds as a portfolio stabilizer.
Against this backdrop, alternative investments attracted an increasingly larger share of investor capital. Alternatives have become an increasingly popular choice for investors looking to strategically diversify and navigate a changing macroeconomic environment marked by extreme bouts of volatility. Within this segment, mortgages provide some of the most sought-after advantages for investors looking to not only protect their wealth legacy, but to capitalize in an environment of economic uncertainty. Indeed, mortgage investments proved in 2022 to be an excellent fixed income alternative, particularly from a cash flow investment perspective.
CMI MIC Funds: A diversified fund solution for any investor profile
In 2022, our family of funds grew considerably over the year, attracting $56M combined, driven by heightened demand for fixed income alternatives in general, and high-quality mortgage investments in particular. Each fund focused on offering investors regular income and peace of mind amidst continued uncertainty as the world recovered from the COVID crisis – one of the biggest global market disrupters of modern times.
|FUND||NET ANNUAL YIELD (2022)|
|CMI MIC Prime Mortgage Fund||6.53%|
|CMI MIC Balanced Portfolio Fund||8.55%|
|CMI MIC High Yield Opportunity Fund||10.55%|
The CMI MIC Balanced Portfolio Fund has grown to become one of Canada’s largest private mortgage portfolios. Assets under management across all 3 funds surged 52% in 2022, a pace that is expected to accelerate this year in the face of sustained demand for private mortgages. The fund has paid a consistent yield of 8-9% since its inception in 2015.
CMI Mortgage Investments: An exclusive and customized mortgage investment program
Our whole mortgage investment division continued its robust growth in 2022, as sustained borrower demand for private financing was equally matched by investor desire for defensive and high-yielding alternative investment opportunities. Our nimble and strategic response to changing market conditions enabled us to meet unprecedented demand while managing the quality of our mortgage originations. As a result, we successfully funded more than $600 million in 2022.
In terms of unit volume, mortgage originations increased 26% compared with 2021. Current assets under management sit at more than $725M. Our continually expanding mortgage portfolio currently includes more than 2500 active investments, with lifetime total of mortgages funded of more than $1.7 billion. The arrears rate across the entire portfolio was below 2% and the loss rate was negligible at less than .05%.
We are strongly positioned to capitalize on the ever-growing need for alternative lending, and we remain relentlessly committed to presenting our investors with the best mortgage opportunities in Canada.
What to expect from CMI in 2023 and beyond
We remain dedicated to innovation and continuous improvement to serve a growing range of borrowers and bring you compelling investment opportunities. Looking ahead, we’re focused on:
- Continuing our geographic expansion. We’ve recently become licensed in Atlantic Canada and Quebec. We’re working to bolster our presence in key markets and continue to strengthen our geographical distribution across the country.
- Diversifying our funding sources. This will allow us to expand our product shelf, broaden the type of borrowers that we serve, and provide you with a wider and more diverse range of mortgage investment opportunities.
- Weekly market updates and analysis. To help you navigate the changing macroeconomic environment, we will be providing a weekly commentary on the economy, financial and housing markets starting in early January 2023.
- Increasing community support. We remain deeply committed to giving back, particularly during these uncertain times. We plan to expand our corporate philanthropy program, and to explore new ways to support our community through our monthly giving program.
As always, thank you for entrusting us with your financial legacy. We’re excited to kick off this new year of growth and partnership with you. For those who are new to us, not currently invested, or seeking a trusted private mortgage investment partner, we invite you to contact us at [email protected] to discuss our programs.