Mezzanine Finance Fund
Incolink, in partnership with MaxCap Group, established the Incolink Mezzanine Fund (IMF) in 2011 to strategically invest in the construction industry in a way that would support members. At the time, Incolink led the way with what was a new and strategic initiative for institutional investors. The IMF’s investments have provided strong, risk-adjusted returns and 2016 will see the effect of the Fund’s investments continue, creating and supporting jobs for Incolink members into its fifth year.
Mezzanine finance in new developments works by supplementing banks’ investments to ensure construction is able to get under way in a post-Global Financial Crisis landscape that has tougher prudential controls. By investing into these projects, the industry gains certainty and is able to continue planning for the future; the returns to the fund are reinvested, which creates a positive cycle and creates employment for workers.
The IMF was implemented with the aim to:
- Develop investment income for Incolink
- Increase and secure jobs for workers in the industry
- Support the industry with strong, strategic initiatives
- Increase the profile of Incolink to the greater community
Traditionally, development projects are funded almost exclusively by banks. The amount of funding banks will offer ranges from 65 to 80 per cent of the total development costs of the project, determined by the quality of the borrower, location and product offering, feasibility of the project and amount of pre-sales.
Through the IMF, Incolink is committed to supporting the construction and building industry in assisting getting developments off the ground – ultimately creating jobs for members. Incolink continues to allocate funds to such projects within its investment guidelines in order to generate attractive risk adjusted investment returns for our Redundancy Funds whilst simultaneously creating jobs for our members.