PMJ Capital is a Business Reporter client
PMJ Capital, a UK-based specialist real estate finance lender, has announced the launch of its PMJ Private Credit No 1 Fund, an alternative investment fund aimed at offering retail investors access to secured real estate debt opportunities. Leveraging its extensive experience in short-term real estate lending, PMJ aims to offer investors a safe but growth-oriented investment. The fund is designed to capitalize on the real estate market's current demand for flexible financing, providing advised retail investors and sophisticated investors the opportunity to diversify their portfolios with real estate-backed loans.
Strong market performance
The UK property finance sector has seen significant growth, particularly in the area of bridging finance. Bridging loan completions totaled £1.69 billion in the final quarter of 2023, an increase of 18.4 per cent compared to the previous quarter, and the sector is expected to expand further, with a projected value market share of £10.9 billion by the end of 2024. PMJ Capital is strategically placed to benefit from this growth, with its specialist knowledge of the North West market and over £200 million in loans awarded to real estate developers and entrepreneurs since 2015.
The fund has established itself as an alternative investment vehicle that allows investors to earn returns on property-backed debt while offering a safer credit approach. Unlike conventional investments, which can be subject to volatility, PMJ's secured lending model is backed by a first-lien collateral on the assets, ensuring investors are the first to recover funds if a borrower fails to comply.
A proven lending strategy
Over the last decade, PMJ Capital has built a strong loan portfolio, providing short-term financing solutions for residential, semi-commercial and commercial property developments, predominantly in the North West of England. The lender has earned a reputation for being fast, flexible and convenient – a rare quality in today's financial market, where traditional lenders often struggle to match the speed and personal touch that SME developers require.
The PMJ Private Credit No 1 Fund offers an entry point into this thriving sector for high net worth investors, focusing on first charge secured loans. Loans are granted after careful risk assessment and typically cover a range of property development activities, including acquisitions, renovations and new construction, all secured by real estate assets. The focus on first-fee security means that investors' capital is protected through a tangible asset, offering a safeguard not found in many other forms of alternative investment.
Synchronize the market and benefits for investors
For investors, the timing of PMJ's fund launch is ideal. The UK property market continues to show resilience and demand for short-term bespoke finance remains high. Additionally, the fund is structured to potentially qualify for business relief (BR), making it an attractive proposition for those seeking tax efficiencies. BR is particularly attractive as it can allow investments in qualifying companies, such as PMJ, to be removed from the investor's estate for inheritance tax (IHT) purposes after just two years, offering a valuable tool for long-term estate planning . This structure makes the fund especially relevant to family offices, wealth managers and HNWIs exploring efficient inheritance strategies.
However, it is essential to emphasize that tax benefits are not guaranteed and investors should seek independent financial advice to confirm their eligibility. The fund also requires a minimum investment of £250,000 and is structured with a two-year lock-up period, after which investors can redeem their shares, subject to the liquidity of the fund.
How PMJ mitigates risks for investors
The PMJ Private Credit No 1 fund is designed with risk management in mind. Loans issued under the fund are mainly bridging financing solutions, ranging between 12 and 18 months, with loan-to-value (LTV) ratios conservatively maintained: up to 75 percent for residential assets and around 60 to 65 percent for cent for commercial properties. . Each lending decision is backed by independent RICS valuations, extensive legal due diligence and ongoing monitoring, ensuring each project aligns with the fund's lending criteria and investor expectations.
Given the current economic climate and concerns about market volatility, PMJ's focus on asset-backed lending offers a reliable source of profitability. While the fund targets above-inflation growth in NAV, investors should be aware that returns are not guaranteed and investment performance depends on market conditions and the performance of the underlying borrowers.
How to participate and considerations for investors
For wealth-focused investors, PMJ's new fund offers the opportunity to diversify their portfolios by taking advantage of the growing UK property debt market. It provides a route to investing in a proven credit strategy, backed by PMJ's decade of experience and regional market knowledge, whilst offering potential benefits of guaranteed returns and inheritance tax efficiencies.
However, it is important to remember that the fund is only suitable for sophisticated investors who understand the risks of investing in real estate financing. As an unregulated alternative investment fund (AIF), it is not subject to the same FCA protections as more traditional financial products. Additionally, while the fund aims to offer consistent returns and tax advantages, investors should seek professional advice before investing, especially to understand how BR could affect their tax planning and wealth management.
A note on compliance and risk
The PMJ Private Credit No 1 Fund is an unregulated alternative investment vehicle, meaning it is not authorized or supervised by the FCA. This type of investment carries inherent risks, including the possibility of loss of principal and limited liquidity. Fund performance may be affected by various market and borrower-related factors and as such, investors are strongly advised to seek professional guidance before committing to an investment.
Investing in PMJ Private Credit No 1 Fund may not be suitable for all investors, and potential investors should be prepared to lose the capital invested. The investment is illiquid and is subject to an initial two-year lock-in period, with redemptions subject to the liquidity of the fund thereafter. Returns are not guaranteed and investors should understand the full risk profile before participating.
Invest with confidence and security
If you are a seasoned investor, family office or financial advisor looking for opportunities to diversify your portfolio with a safe asset-backed investment strategy, the PMJ Private Credit No 1 Fund could be your gateway to consistent returns in the investment market. real estate financing. To find out more about how you can be part of this new opportunity, contact Chief Investment Officer Damian Ainsley or speak to a trusted financial advisor today.
Please note that this article is intended for informational purposes only and does not constitute financial advice or an investment offer. All potential investors are advised to seek independent financial, tax and legal advice before making any investment decisions.
