Add CMI MIC Funds to Your Client’s Portfolio

With low correlation to equity and fixed-income markets, CMI’s family of MIC funds is a compelling alternative to traditional investments that can help you diversify your clients’ portfolios from public markets.

The CMI MIC Prime Mortgage Fund minimizes volatility by investing primarily in first mortgages and by capping its loan to value ratio at 65%. The fund aims to deliver targeted annual returns of 6-6.5%. The CMI MIC Balanced Mortgage Fund offers moderate risk and volatility by investing in first and second mortgages while capping its loan to value ratio at 75%. The fund aims to deliver targeted annual returns of 8-9%. The CMI MIC High Yield Fund aims to deliver a target annual yield of 10-11% by investing primarily in second mortgages with a maximum loan to value ratio of 85%.

Industry Expertise

Our investment research goes beyond simply qualifying each individual investment deal. Our extended efforts to understand the industry and it’s underlying fundamentals focus on framing the investment opportunity for value creation through deep market analysis. We employ a thorough due diligence process to identify opportunities and risks, ultimately adding value to our partners seeking informed deal decisions.

At CMI, we believe that due diligence is both an art and a science. We spend a considerable amount of time identifying investment opportunities that meet our rigorous standards. We then spend even more time trying to identify the “story behind the numbers” and whether the opportunity fits our growing portfolio.

Investment Process

The process starts when an Investor deposits funds into the MIC. The investor’s capital is used to purchase preferred shares within the corporation, which is entitled to a dividend. The income generated from the underlying mortgages then flows through to the investors as monthly dividend payments.

1

Invest directly with CMI MIC Funds (non-registered)

  • CMI MIC Funds are eligible for cash investments both personally or through a corporation. The investor would complete the necessary subscription documents with a registered exempt securities investment representative.
  • Cash investments are accepted through certified cheque or draft made payable to “CMI Mortgage Investment Corporation”.
2

Invest inside your RRSP, RRIF, TFSA

  • CMI MIC Funds are eligible for RRSP, RRIF, TFSA and other registered investments through specified trust companies.
  • CMI MIC Funds work alongside several third party trust companies, which allow investors to open a self-directed registered account and invest into CMI MIC Funds. The monthly dividends can be directed back into the registered account or used to purchases additional shares using the “DRIP” option. The “DRIP” option is a great way for investors to take advantage of compounding rates of return within their registered accounts.

CMI MIC Funds are available through Investment Advisors, Registered Portfolio Managers, IIROC dealers, registered exempt securities investment representatives and on the FundServ platform.

When funds have been successfully deposited into CMI MIC Funds, management will source mortgages in order to place the newly acquired capital.

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Dividend Payments

A MIC must distribute 100% of its annual net income before taxes to its shareholders in the form of dividend payments (Canadian Income Tax Act – section 130.1). Dividend payments are made on a monthly basis and treated as regular income for income tax reporting. The investor has the option to receive dividend payments in the form of cash or new shares to compound their investment. The MIC undergoes an annual audit conducted by an independent accounting firm with all shareholders receiving a copy of the annual audited financial statements. At CMI we believe transparency and accountability are two of our most important values. We are invested alongside our investors and we strive to deliver a professional and efficient client experience, every step of the way.

CMI Investment and Operating Policies

  • Target loan to value ratios from 65%-85%
  • Targeted annual rates of return ranging from 6-11%, depending on the fund
  • More than 95% of the portfolio is comprised of residential mortgages
  • A professional appraisal and comparative market analysis is conducted for each mortgage as part of an extensive in-house underwriting process
  • Operator performance bonus reinvested into the MIC
  • Operator maintains a sizeable investment in the MIC as a partner
  • Operating cost efficiencies achieved through the CMI Financial Group partnership are passed on to fund holders
  • No shareholder can own more than 25% of the issued shares
  • Licensed mortgage administrator with more than $300M in assets under management and a capital loss rate of 0.10%

Wealth Managers and Investment Advisors

The investment returns generated by the CMI MIC Family of Funds are achieved by carefully selecting high-quality mortgages backed by real property in strong, stable urban real estate markets across Ontario and the rest of Canada.

Strategically integrating a mortgage investment fund such as the CMI Prime Mortgage Fund, CMI Balanced Mortgage Fund, or the CMI High Yield Opportunity Fund can complement client portfolios to help diversify and maintain overall positive returns.

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How CMI achieves consistent strong returns

Coming from an extensive mortgage lending background, we have the ability to execute financing structures that are customized to the specific needs of borrowers to compete with the comparatively inflexible financing structures offered by large financial institutions. We go beyond our fiduciary duties to the various regulatory bodies maintaining strict oversight over our MIC’s reporting and management obligations by providing extensive transparency to go along with our detailed monthly, quarterly and annual reporting.

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High-quality Mortgages

With over 40 years of mortgage lending history, management holds key relationships that provide access to high-quality real estate in numerous urban centers across Canada. The investment returns that you see are reported net of all expenses, including loan loss. The majority of our mortgages are secured by real estate in our backyard – Ontario. The regions we focus on offering stable, steady real estate markets where the economic fundamentals provide a stable investment foundation.

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Working with Your Clients

CMI puts client relationships seriously, taking the time to educate and work with your investors whether they are savvy, experienced investors to investors looking to start with a small investment. Our hands-on approach continues following the mortgage advancement where we handle all facets of portfolio administration. This includes the collection of mortgage payments, payment of property taxes, maintenance of insurance coverage, mortgage renewals and the discharge of the mortgage. This helps ensure your clients have the comfort of knowing the entire process is managed by one group that is accountable for each step of the process.

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Investing in Our Partners

CMI MIC Funds are managed by capable professionals, with substantial experience in all facets of mortgage lending, real estate appraisal, banking, and mortgage law. As we are active in the mortgage market on a daily basis, we have the expertise and knowledge to pass onto our partners. We provide exclusive access to our market research reports, marketing material, market insights and hold regular partner meetings whether it be online or in person with the sole purpose of continuing our Partner’s growth trajectory. We believe in investing in each one of our partners.