The fund’s diversity metrics remained strong including 25 loans to 20 borrowers, a strong geographical spread and a moderate LVR of 64.4%.

The fund’s bias toward residential and industrial land and civil construction loans remains. We fundamentally believe that DA approved land loans with moderate LVR’s and “as is” valuations present very low recovery risk. Likewise this applies to loans for civil construction works, which typically comprises non-complex earth and pre-subdivision activities, and also investment property and additional risk.

The fund’s largest exposure remains a major loan issued in May25 and comprising 26% of the portfolio has been significantly derisked, with a significant element of the security property sold and awaiting settlement and repayment. This will be see the exposure reduced and the remaining LVR for this loan fall to ~58% at settlement in October.

We expect that the effects of the Feb and May RBA rate cuts have now largely flowed through, but are conscious of the market speculation regarding a further cut in August 2025, which will likely impact returns looking forward.