News & Views (January’24)

Welcome to the News & Views email newsletter from Faes & Co. Every month or so, we will be emailing with updates and news from our firm, along with links to interesting articles and other thought leadership. We will aim to provide an informative newsletter - that is hopefully also (at times) entertaining.

We'd love to hear from you with any ideas or feedback you might have.

🚀 Launch of our Income Fund

We recently announced the launch of the Faes & Co Income Fund.

We have been working on the launch of this Fund since early last year, and we are excited to be now sharing the details with investors.

The Fund offers investors a consistent return from a diversified portfolio of asset-backed loans. Through our own origination platform, F2 Finance, we are able to provide investors with a unique investment proposition.

The Fund is focused on providing short-term loans to professional corporate borrowers that are active in the ‘fix & flip’ market in the United States; providing loans secured by a first mortgage against residential property. This is a highly liquid market and an asset class in which we have significant domain expertise.

📈 The return offered to investors is currently between 8.5-10% per annum.

🛡️ The Fund is secured by a high level of security against a diversified portfolio of loans, and has a conservative lending profile.

📄 Our Fund factsheet is available here, and there is a brochure with more information on the Fund here.

This is a domain that our firm knows extremely well. Our team has been involved in the sector for almost two decades and has experience in successfully managing investor funds for the last 14 years.

☎️ If you would like to learn more about the Fund, please let us know, or feel free to book in a time to talk with us here.

🏢 New offices

In October we moved into our new offices. We're still in Santa Monica, only a block away from our last offices, but we now have a more suitable setup for our ambitious new firm. If you are in LA, please do come and say hi!

🤔 Food for thought

We recently read this article from Bloomberg, which we found to be a really interesting read (Higher Interest Rates Are Shattering Housing Dreams Around the World). It highlights some of the factors at play in the global housing market with the impact of higher interest rates. It was also, interestingly, the most read article on Bloomberg.com in 2023! It seems that everyone's obsession with housing continues. Here are some interesting charts from the article:

Higher interest rates, and existing borrowers on historically very low rates, has gridlocked the US housing market, with sales seeing a massive decline through 2023. Exacerbating the situation has also been the lack of new housing supply, which has been on a multi-decade-long decline. So what: All of this has helped support house prices (with supply v demand economics at play), and made the proposition for products like bridging finance that we provide through F2 Finance, an even more attractive product (for both borrowers and investors).

Another recent article we found interesting, was this article from American Banker (How Deposits Went From Sideshow to Center Stage in 2023). The article highlights how regional banks in the US have been suffering a run on liquidity following the collapse of Silicon Valley Bank. This has seen the larger banks become even larger as savers move their deposits to banks seen to be bigger and safer. So what: The liquidity crunch has been felt across various segments of the broader market. Specifically, with regards to the US bridging finance, many institutions have retreated from actively funding this market. This has caused a gridlock for bridging finance borrowers. With the securitization market shut for a large part of 2023, and the regional banks suffering a run on liquidity, it has been a good time for a new player to enter the market (ie, our F2 Finance, for example).

Finally, there was recently a great 'research dump' from the Financial Times, linking to market commentary and outlook forecasts for 2024 from over 50 fund managers and investment banks. You can see the list and read the reports from here. Happy reading!

🎟️ Events

Our team was busy last year attending several events, meeting with investors, and talking about our new Fund. In the last 6 months or so we attended Founders Forum (London), the Milken Institute Global Conference (in LA), the American Association of Private Lenders conference and the Geraci Captivate conference (both in Las Vegas), the Bigger Pockets conference (in Orlando), the California Mortgage Association conference (in San Diego) and the Opal Asset Back Securitization conference (in Dana Point).

In the coming months, we will attend the annual Structured Finance Association conference in Las Vegas, the Beverly Hills Super Summit, and the Montgomery Summit in LA. If you will be at any of these events please let us know - we'd love to meet up!