SQM Research has awarded an investment-grade rating to the Thintank Income Trust, stating the offering has the ability to deliver the return objective across all time periods.
To this end, the fund is looking to generate an annual return of the bank bill swap rate plus 3.6 per cent for investors and is aimed at SMSFs, the self-employed and the small to medium enterprise borrowing market.
The research house recognised several strengths of the fund in handing down its decision, with one being its long-term record in its target market.
“The business is very well established and resourced, and it operates in a lucrative niche that the large banks do not actively service. The business has the requisite scale to operate the trust successfully,” SQM noted.
Thinktank was also commended for the investment team involved with the product.
“The investment team has been stable, with no staff departures in the last three years, with two experienced additions. Most key senior staff own or are incentivised by equity ownership in the parent company,” it said.
Further, SQM acknowledged the fund’s operational and performance consistency to date.
“Since inception, the trust has not missed a single scheduled interest or principal payment to its funders and investors,” it stated.
“The trust does not loan to any construction finance, development funding, land banking or Thinktank employees.
“Income returns from the trust have been extremely consistent and have matched the target objective, with no losses to date.”
The research firm did draw attention to the fact the product’s loan-to-value ratio (LVR) was slightly higher than its peers at 71 per cent compared to between 55 per cent and 75 per cent. SQM did note the manager was comfortable with this LVR as it does not loan to construction projects and security assets must generate income.
In addition, SQM highlighted the applicable redemption period was 12 months, which may not suit some investors.
Thinktank investments business development manager Laruen Ryan said: “The inaugural SQM rating of favourable is an exciting and important first step for Thinktank as we look to engage with the broader wealth management and financial advice industry.
“The rating validates Thinktank’s strong track record and cautious origination approach, leading to consistently low arrears and a negligible loss history through the cycle.”
The minimum investment amount for the Thinktank Income Trust is $10,000.
''