Empowering you to invest confidently

Invest in registered first mortgages over established property. Targeting net returns to investors from 6.50% p.a.

Speak with one of our Directors today.

Empowering you to invest confidently

Invest in registered first mortgages over established property. Targeting net returns to investors from 6.50%.

Speak with one of our Directors today

Msquared aims to deliver regular fixed income returns, secured by property. Let Msquared empower you to invest confidently.

Access quality loan investments

Over 100 years combined knowledge helps us identify attractive risk/reward profiles.

You’re in control

Access thorough, transparent research to help you select your investment with more confidence.

Personal service, the way it should be

Msquared Directors are just a phone call away to discuss any investment and how your investments are progressing.

how msquared works

Msquared Contributory Mortgage Income Fund provides an opportunity to invest in a range of quality registered mortgages.

 

Through a Contributory Fund structure, investors are able to choose the mortgage investments that match their personal risk/return appetite.

Current investments

LIVE
msquared-home-current-investments-palm-beach
TAREN POINT, NSW

Construction

TERM: 15 Months RETURN: 8.00% p.a.  LVR: 70.00%

LIVE
msquared-home-current-investments-burwood
SEAFORTH, NSW

Construction

TERM: 15 Months RETURN: 8.00% p.a. LVR: 70.00%

LIVE
msquared-home-current-investments-north-kellyville
CAMMERAY, NSW

Construction

TERM: 15 Months RETURN: 8.00% p.a. LVR: 65.00%

How to get started

We ARE here to make the process easy for you. if you have any questions, we WOULD love to help!

1. Contact us

We are happy to discuss your needs and whether our fund is suitable for you. It’s obligation free.

2. Choose your investment

Access comprehensive research, insights and investment tools to help you choose a risk profile you are comfortable with.

3. Ready to apply?

Feel free to download our online application form below

Meet your investment team

msquared-home-team-john-thomas
JOHN (JT) THOMAS
Chairman

John (JT) Thomas has been involved in banking, finance and funds management activities for 46 years. After initial training with a major bank, a building society and then a credit union, John joined the Howard Group in 1987, where he began managing the Howard Mortgage Trust.

John is considered an expert in the commercial mortgage trust lending space. John has an enviable record for not having lost one cent of investor funds even during the GFC, in either his mortgage or property fund activities.

msquared-home-team-paul-miron
PAUL MIRON
Managing Director

Paul Miron is respected and recognised for his economic views and ability to mitigate risks through well considered structuring. Paul is the principal theorist behind Msquared Capital‘s credit policy.

Paul has facilitated funding for many significant projects predominantly in NSW but also spanning VIC and QLD. Paul has over the years received numerous significant industry accolades and has been regularly engaged to present on the topics of lending, property, superannuation and complex structuring.

msquared-home-team-paul-myliotis
PAUL MYLIOTIS
Managing Director

Paul Myliotis is well regarded and has a vast network of trusted industry contacts. Paul’s highly commercial view comes from a wealth of on-the-ground experience in the private lending space, greatly complementing the decisions of the credit committee. In recent years, Paul’s primary focus has been in commercial and residential developing requirements managing transactions of varying degrees in size and complexity.

Msquared in the News

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MAY 27, 2022

Investing During Extreme Uncertainty

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APRIL 6, 2022

Property – A Reliable Asset in Uncertain Times

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FEBRUARY 18, 2022

It’s All About Interest Rates

In The Media

Msquared Capital – Assisting in Providing High Yielding Investments, Contributory Mortgage Fund & High Yielding Mortgage Investments.

The following are recent Msquared media syndicated releases:

Property & Economy in 2022… It’s About Risk Management

By Paul Miron – Msquared Capital

The end of 2021 brings an appreciation that we are in the middle of a bull market across most asset classes whilst still dealing with the pandemic. It is a general consensus amongst the economists that we could have experienced a recession as significant as the Great Depression if the governments and reserve banks did not act accordingly.

To illuminate, the scale of financial support provided by the Australian government to the economy was roughly seven times greater than what was provided during the GFC.

The question to ask now is what does the future hold and what can we expect in 2022 once this extraordinary sugar hit, the tapering of bond-buying programs and special Covid-19 disaster payments begin to fade.

With lower interest rates and easy access to cheap money, households spent money on property and otherwise saved, due to pent-up demand due to lockdowns. With the added benefit of hindsight, it is no surprise that property, the share market, and other asset classes have done exceptionally well.

With US latest inflation figures hitting 6.2%, inflation fears are realised. With global recovery occurring quicker than anticipated, global supply chain issues still holding up deliveries of goods, tight labour market, and the world teetering on energy shortages, the argument whether inflation is transitionary seems less likely. Interest rate rhetoric is quickly changing, and it seems interest rate hikes are inevitable. Economists argue long-term official interest rates should be closer to 3%, not 0.1% and that we are at the beginning of a new market cycle.

What is anticipated within the property sector?

The cohort of banks’ property forecasters such as Westpac, CBA, and ANZ predicts the property market has another 5% to 7% in appreciation until interest rate hikes kick in, resulting in a sharp 20% decline in property prices.

Despite interest rates being the most significant contributors to property prices, other elements such as demand and supply, migration, vacancy rates, and employment need to be considered collectively.

1) Supply and Demand of property:

a) The available supply of property for resale. Due to the uncertainty of Covid-19, people held off either selling or buying during the lockdowns. That said there were thinly traded volumes, placing upward pressure on prices. Some buyers have resorted to trading money for patience, resulting in many anecdotal prices going far beyond reserves and smashing records.

Since lockdowns eased, we have witnessed an explosion of listings anywhere between 30% to 50% above the five-year average depending on geography. Clearance rates in Sydney have fallen to 64% and 65% in Melbourne, lowest since 2017, marking the normalisation of property price growth as a reality.

b) The second subsection is the structural demand and supply of property.

Chronic undersupply of property enables property prices to be resilient in Australia. According to the National Finance and Investment Corporation, we are short of 210,000 dwellings nationally. We witnessed how specific property segments reliant on international students, tourism, and short-term stay accommodation, which initially showed price weakness, ultimately recovered and evolved over the past 18 months due to the supply of property.

There is a supply lag inherent in the market as it takes years to adjust to demand due to the time it takes for the planning approval, financing, and construction of a development project.

Depending on which state you live in, the lagging supply of property to demand is exacerbated by the inefficiencies created by the planning process, as detailed in the report by Peter Tulip, RBA’s own property economist. The modelling identifies the premium that consumers pay for lack of supply.

As borders are re-opening, politicians wish to resume migration and international travel promptly.

Just 1% of net new migration is responsible for 2% of our national GDP. That, of course, drives economic growth and can cushion our economy for the immediate term while rebalancing trade as we divorce ourselves from our largest trading partner, China, responsible for 60% of our net exports.

The fact that Evergrande, China’s largest property developer, is on the verge of collapse is not the main issue of concern for investors; it is the appreciation that China’s economic model in creating growth via supplying property artificially has run its course. China provides roughly 30% of the world’s GDP growth. The sheer size of the issue is larger than the Chinese government can resolve, with 22% (90 million units) empty with 19 million dwellings being built yearly by over-leveraged developers; this is an economic Ponzi scheme that we have not seen since the spectacular Japanese property collapse in the ’80s. We believe that Australian investors and the world are underestimating the contagion of this event to both credit market and investor psychology.

This is enough for politicians to bet on increasing migration to offset China’s risk to the global economy and cushion any labour supply constraints, suppressing inflation pressures.

The additional 60,000 required to house migrants provides a significant multiplier effect on the general economy, as for every million dollars contributed to construction it adds three million to our wider economy.

Employment:

We see the labour market bouncing back strongly post lockdown as normal life resumes. The Australian Reserve bank predicts that unemployment will reach 4% by 2023, possibly a more robust labour market than before Covid-19. Once again, this will place upwards pressure on property prices.

Vacancy rates:

The property vacancy rates are currently at a ten-year low.

Animal spirits:

A famous scientist Richard Fynman said, imagine how much harder physics would be if electrons had feelings, then physics would only work sometimes. The same can be said about economic forecasting.

Forecasting is a noble task; often, the market outcome is driven by the general mood of the market, which is referred fondly as ‘animal spirits’.

The market comprises people, and actions are not always based on fundamentals; their perspective on the future drives demand and affects prices. As mood can change from positive to negative and vice versa, markets overshoot, and assets are oversold, creating the economic market cycles that have existed for centuries. Older and wiser investors constantly remind us more naive investors of appreciating risk assessment, diversification, and holding your nerve in the market during bad times and taking comfort in holding quality assets.

Mark twain has been quoted saying “history does not repeat itself, it rhymes.”

Issac Newton, known as one of the greatest minds who have lived on our planet, could not tame his own animal spirits when it came to investing. “Sir Isaac Newton in 1720 owned shares in the South Sea Company, the hottest stock in England. Sensing that the market was getting out of hand, the great physicist muttered that he ‘could calculate the motions of the heavenly bodies, but not the madness of the people.’ Newton dumped his South Sea shares, pocketing a 100% profit totalling £7,000. But just months later, swept up in the wild enthusiasm of the market, as he was quoted, he could not stand his friends and other investors getting rich. Newton jumped back in at a much higher price — and lost £20,000. For the rest of his life, he forbade anyone to speak the words ‘South Sea’ in his presence.”

Understanding the combination of market cycles and the underlying market fundamentals is the key to unlocking the secrets to sustained investing without added stress. The Australian property market still possesses solid underlying fundamentals despite eventually succumbing to the inevitable market cycles due to the onset of animal spirits.

Due to a favourable migration policy, we believe that inflation pressure will not be as acute as in the US and Europe. Interest rates will rise, but not at the same pace as overseas. The property market will remain resilient and eventually succumb to a fall in value.

We believe that property will remain flat until such time, and it will be closer to 10% rather than going up 5%-7% and then falling 20% as predicted.

The price gap between houses and units has never been wider, according to CoreLogic research. It is close to 54% in Sydney, and 52% in Melbourne. We believe that in the coming years the gap will reduce as demand will increase for apartments. We believe high quality luxury apartments that cater for empty nesters and professional families will be one of the best performing asset types across the sector.

Investing in mortgages is increasing in popularity, especially in an environment where most asset classes are unlikely to deliver capital gains due to the prospect of increasing interest rates. Investors are seeking regular, reliable, and resilient income as the market cycle changes and investors will seek to balance their portfolios to a more defensive position to withstand volatile times. Asset preservation is the foundation of mortgage investing. Those who have invested into mortgages over time have seen first-hand the value of compounding interest at work to build wealth over time. For added peace of mind and certainty, we at Msquared typically lend 65% against the value of security offered and give our investors the platform, tools and opportunity to be able to create their own portfolio of direct mortgages that meets their risk profile.

If you would like to know more, please contact us on 9157 8608 or email us at investor@msqcapital.com.au

Learn more about Msquared Capital via their website here: https://msqcapital.com.au/

References: 

1) House prices will continue to rise into 2022 before falling in 2023, the Commonwealth Bank predicts (businessinsider.com.au)

2) https://www.afr.com/property/weekly-property-auction-clearance-rate-hovers-around-2017-low-20170612-gwp66b

3) https://www.domain.com.au/auction-results/sydney/

4) nhfic-state-of-the-nations-housing-report-2020.pdf

5) https://www.linkedin.com/pulse/property-still-safe-bet-paul-miron/

6) https://www.linkedin.com/feed/update/urn:li:activity:6851358435926253568/

7) Economic Outlook | Statement on Monetary Policy – August 2021 | RBA

8) Vacancy Rates Fall to Ten Year Low (propertyupdate.com.au)

9) https://www.corelogic.com.au/news/premium-houses-over-units-has-hit-record-highs-which-capital-city-shows-biggest-gap

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MSquared Capital Believe Australian Private Credit Coming Into Vogue

Sydney based Msquared Capital, a non-bank lender, in a recent communique to clients confirmed their belief that Australian private capital is coming into vogue as has occurred in other continents.

Just over 70% and 46% of all commercial loans are written in the US and Europe by private credit providers, also known as non-bank lenders; In Australia, it is a mere 8% and clearly lagging international markets.

This class of investment offers the ability for investors to have ownership of the mortgage, earn more than 6% p.a. while having the security against real property. This investment generates regular income with a proven track record in preserving investor capital in any market cycle and volatile markets.

The investors in US receive returns of circa 3% p.a. due to the maturity and competitive nature of the overseas private credit market. In comparison, this is less than half of what is offered by Msquared for a similar style of investment, as their returns start from 6.50% p.a.

Considering Australia are operating with the same close to zero interest rate environment globally, this is significant.

Msquared believe that demand from Australian commercial borrowers to have options other than funding through our major banks will continue to grow as reflected by the funding Gap, last reported to be over $119b. Due to ongoing government regulations and interventions, the ability of private credit providers to offer bespoke solutions, ease of capital, service and speed, private credit providers will continue to grow.

Investors are slowly learning the benefits of investing in direct commercial mortgages and seek out these opportunities. Institutional investors weigh their support into the sector both due to the lack of ability to generate consistent regular income from other investment classes and due to recognition of resilient qualities offered by real property, enabling asset preservation within the portfolio

As the market matures, the appreciation for contributory funds will increase. Savvy investors will seek higher transparency, ethical investment requirement, and a direct line of sight of the underlying security on offer while having the added benefits of superior returns rather than a pooled fund.

Contributory funds allow more control to the investor by having these choices. The function of a contributory fund is that each investment is a separate ring-fenced opportunity, whereas pooled fund, as its name indicates, has many mortgages within one investment vehicle.

The contributory fund places the investor in the driving seat, allowing them to create their personalised unique investment portfolio in this asset class.

The Megatrend is that there will be a structural change on how and who will provide commercial loans in Australia, reflecting the path experienced in the US and European debt markets. Msquared Capital is excited with the prospects of meeting the needs of more investors while servicing the funding needs of quality borrowers in their commercial pursuits for many years to come.

About Msquared Capital

Msquared Capital are Sydney bases and a non-bank lender. They offer first and second registered mortgages over bricks and mortar located on the Eastern Seaboard of Australia. Learn more about them via their website here: https://msqcapital.com.au/

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Leading Australian Blogger Feature Financial Service Providers.

.In an exclusive interview with Eleven Media, Australian lifestyle blogging site Blog Chicks confirmed they have listened to their website visitors and commenced in August publishing a series of features on the array of financial service providers readers have asked about.Blog Chicks is an online magazine website on lifestyle matters, travel and fashion for the discerning blog reader on the web. The site also features all things from health, diet, fitness, home & garden matters right through to tips for selecting an appropriate investment in contributory mortgage funds to what to look for in a chiropractor. There is something for everyone.

During August, they have responded to reader enquiries relating to financial services matters by commencing with features on Online Brokers Australia that provide broker reviews and comparisons making it easier to choose an Australian regulated, CFD, Forex or online broker who meets readers trading needs. Online Brokers Directory has also been featured who assist visitors to their website find the best broker for their online trading with a wide variety of brokerage firms including stock, CFD, futures, options, and foreign exchange brokers in Australia. In addition, they have listings for other key financial services such as investment and advisory services, broker reviews and cryptocurrency trading and exchanges.

Contributory Mortgage & Pooled Mortgage Fund Features

In September, Blog Chicks will be featuring Sydney based Msquared Capital who are a non-bank lender. They offer first and second registered mortgages over bricks and mortar located on the Eastern Seaboard of Australia. In advance of the feature being published, learn more about Msquared Capital via their website here: https://msqcapital.com.au

Blog Chicks will shortly be running financial planning articles on what a product disclosure statement is, compared to a continuous disclosure notice. The financial planning process for businesses financial planning is also being discussed by experts in the industry for readers.

Diane Muller, founder and content editor of Blog Chicks said this in her interview with Eleven Media “We have been experiencing great growth in visitors to our online magazine over recent years. We have listened to the feedback survey from our website visitors as to the content and experience they seek. We have seen the importance of also staying at the leading edge of technology to keep in touch with our clients the way they expect and to communicate in the best way possible the array of information we provide to our website visitors.”

The blog has been in operation for over 10 years and is committed to meet client needs both in the information they provided readers and technology they use. The leading Australian online lifestyle magazine has a long history of regularly featuring Australian industry sectors and companies.

Learn more about Blog Chicks and their array of lifestyle blogging features via their website here: www.blogchicks.com.au

About Blog Chicks

Blog Chicks is an online lifestyle magazine and leading Australian online lifestyle magazine site for the discerning reader on the web, on all things from health, retirement, fitness, home and garden matters right through to tips for selecting a mortgage fund or cosmetic dentist. Something for everyone.