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Romspen Mortgage Investment Fund Announces 2019 Results – Canada NewsWire

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Romspen Delivers Strong Performance in 2019.

TORONTO, June 8, 2020 /CNW/ – Romspen Mortgage Investment Fund, a leading non-bank mortgage lender specializing in commercial and industrial real estate, today released its financial statements for the year ended December 31, 2019.  For 2019, the Fund achieved a 7.5% net yield, reflecting both a strong absolute return and significant comparative outperformance against the major fixed income benchmarks. 

2019 Highlights

  • The net investment portfolio increased by 15% in 2019 to $3.0 billion.
  • Net earnings for 2019 increased by 1% to $187 million.
  • Distributions to investors totalled $0.73 per unit to yield a compounded net return of 7.5%.
  • Net yield of 7.5% for Romspen significantly outperformed T-bills (1.7%) and the FTSE-TMX Short-Term Bond Index (“FTSE/TMX–STBI”) (3.1%). S&P/TSX Composite Total Return Index (“S&P/TSX”) (22.9%).
  • Romspen’s past three, five, ten and twenty year performance has outperformed T–bills, FTSE/TMX–STBI and S&P/TSX.
  • US mortgages in the portfolio increased to 45% from 44% in 2018.
  • The Fund’s unitholder equity for all units outstanding grew to $3.0 billion at the end of 2019 compared to $2.4 billion for 2018.
  • Romspen has delivered positive net investor returns each and every month for the past 20 consecutive years.

“Completing its 53rd year in 2019, the firm has a strong history of growth, broad diversification across North America and a solid and consistent investment track record”, says Mark Hilson, Managing General Partner of Romspen. “We have a long track record of delivering steady and predictable returns. Romspen has generated positive returns each and every month over the past 20 years and has typically outperformed the major benchmarks across a broad spectrum of economic conditions and cycles”.

2019 Results of Operations

Revenues for the year were $232 million, compared to $229 million for 2018. Current year revenues are higher reflecting the growth in size of the mortgage portfolio offset by modestly lower interest rates on the potfolio.  For 2019, Romspen recorded net income of $187 million, or $0.68 per unit, compared to $185 million, or $0.81 per unit, in 2018.  Investors held units totalling $3.0 billion, compared to $2.4 billion last year.  Net debt (debt less cash) was $106 million, compared to last year’s level of $179 million.

Comparative Performance

During 2019, Romspen’s net compounded yield of 7.5% significantly outperformed T-bills (1.7%) and the FTSE/TMX–STBI (3.1%). S&P/TSX (22.9%).  The following table presents a comparative performance history reflecting Romspen’s consistent outperformance against the benchmarks.

Comparative Cumulative Compounded Performance Yields



1 year

3 years

5 years

10 years

20 years







Romspen

7.5%

25%

46%

114%

453%

S&P/TSX

22.9%

22%

36%

95%

261%

FTSE-TMX STBI

3.1%

5%

9%

26%

119%

T-bills

1.7%

4%

5%

9%

54%

Note:

Romspen returns are net, comparative returns are gross.  




Yield/return, as used herein, is calculated based on net compounded monthly cash distributions to unitholders, based on a $10.00/unit subscription price without any adjustment for unit gains/losses on sale/redemption.

Investment Portfolio

At December 31, 2019, the net investment portfolio was $3.0 billion, compared to $2.6 billion in 2018, representing an increase of 15%.  The Fund realized losses of $7.2 million on mortgages that were previously reserved for, ensuring that there was no negative impact on net earnings from these losses.  Total provisions for credit losses increased to $74.7 million, maintaining a comfortable margin of safety. 

The Fund continues to focus on short-term mortgages, with 82% of mortgages maturing within one year and 93% maturing in less than two years.  The portfolio remains well diversified with 21% of mortgages invested in Ontario, 26% in Western Canada, 8% in other provinces, and 45% in the US across 17 states.  The weighted average interest rate of the mortgage portfolio was 10.4% compared to 10.6% in 2018. 

2019 Distributions

Unitholder distributions for 2019 were $0.73 per unit, consistent with $0.73 per unit in 2018.  This equates to a compounded net yield to investors of 7.5% consistent with 7.5% in 2018.

About the Fund

Romspen has a long-term track record of successful mortgage investing.  With its origins in the mid-60’s, Romspen is one of the largest non-bank commercial/industrial mortgage lenders in Canada with a portfolio in excess of $3.0 billion.  Our investors are high net worth individuals, foundations, endowments and pension plans. 

The Fund’s investment mandate is focused on capital preservation, strong absolute returns and performance consistency.  Romspen has had 20 consecutive years of positive net investor yields (ranging between 7.4% – 10.6%) with positive returns each and every month.

The 2019 Romspen Mortgage Investment Fund Annual Report including the Trustees’ Report, Management’s Discussion & Analysis and the audited Financial Statements, are available at: www.romspen.com.

This press release is for informational purposes only.  It is not investment or financial product advice, and is not intended to be used as the basis for making an investment decision. This press release is not, and does not constitute, an offer to sell or the solicitation, invitation or recommendation to purchase any securities in any jurisdiction. An offering memorandum containing important information relating to the Fund has been prepared, and the Fund is available only to investors who are “accredited investors” or otherwise qualify under certain other exemptions from prospectus requirements under applicable securities laws. Copies of the offering memorandum may be obtained from Romspen.

SOURCE Romspen Investment Corporation

For further information: Mark L. Hilson, Managing General Partner, [email protected], 416-966-1100

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www.romspen.com

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Economy

S&P/TSX composite down more than 200 points, U.S. stock markets also fall

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TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.

The S&P/TSX composite index was down 239.24 points at 22,749.04.

In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.

The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.

The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.

The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.

This report by The Canadian Press was first published Sept. 6, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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S&P/TSX composite up more than 150 points, U.S. stock markets also higher

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TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.

The S&P/TSX composite index was up 171.41 points at 23,298.39.

In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.

The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.

The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.

The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.

This report by The Canadian Press was first published Aug. 29, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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Investment

Crypto Market Bloodbath Amid Broader Economic Concerns

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Breaking Business News Canada

The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.

The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.

Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.

The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.

Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.

Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.

Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.

Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.

The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.

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