PMJ Capital is a Business Reporter client
PMJ Capital, a UK-based specialist property finance lender, has announced the launch of its PMJ Private Credit No 1 Fund, an alternative investment fund geared towards offering retail investors access to secured real estate debt opportunities. By leveraging its extensive experience in short-term property lending, PMJ aims to provide investors with a secure yet growth-oriented investment. The fund is designed to capitalise on the current property market’s demand for flexible finance, providing advised-retail investors and sophisticated investors with an opportunity to diversify their portfolios with real estate-backed lending.
Strong market performance
The UK’s property finance sector has seen significant growth, particularly in the area of bridging finance. Bridging loan completions totalled £1.69 billion in the final quarter of 2023, rising by 18.4 per cent compared to the previous quarter, and the sector is expected to expand further, with a market value projection of £10.9 billion by the end of 2024. PMJ Capital is strategically placed to benefit from this growth, with its specialist knowledge of the North West market and over £200 million in loans provided to property developers and entrepreneurs since 2015.
The fund has been established as an alternative investment vehicle that allows investors to earn returns from property-backed debt while offering a more secure lending approach. Unlike conventional investments, which can be subject to volatility, PMJ’s secured lending model is backed by first-charge security on assets, ensuring investors are first in line to recoup funds if a borrower defaults.
A proven lending strategy
Over the past decade, PMJ Capital has built a robust lending portfolio, providing short-term financing solutions for residential, semi-commercial, and commercial property developments, predominantly in the North West of England. The lender has cultivated a reputation for being fast, flexible and hands-on – a rare quality in today’s finance market, where traditional lenders often struggle to match the speed and personal touch required by SME developers.
The PMJ Private Credit No 1 Fund offers an entry point into this thriving sector for high-net-worth investors, focusing on first-charge secured lending. Loans are issued with careful risk assessment and typically cover a range of property development activities, including acquisitions, refurbishments and new builds, all secured against real estate assets. The focus on first-charge security means that investors’ capital is protected through a tangible asset, offering a safeguard that is not found in many other forms of alternative investment.
Timing the market and investor benefits
For investors, the timing of PMJ’s fund launch is ideal. The UK property market continues to show resilience, and the demand for tailored, short-term finance remains high. Furthermore, the fund is structured to potentially qualify for business relief (BR), making it an attractive proposition for those seeking tax efficiencies. BR is particularly appealing as it may allow investments in qualifying companies, such as PMJ, to sit outside the investor’s estate for inheritance tax (IHT) purposes after just two years, offering a valuable tool for long-term wealth planning. This structure makes the fund especially relevant for family offices, wealth managers and HNWIs who are exploring efficient inheritance strategies.
However, it’s crucial to emphasise that tax benefits are not guaranteed, and investors must seek independent financial advice to confirm their eligibility. The fund also requires a minimum investment of £250,000 and is structured with a two-year lock-in period, after which investors may redeem their shares, subject to fund liquidity.
How PMJ mitigates risks for investors
The PMJ Private Credit No 1 Fund is designed with risk management at its core. The loans issued under the fund are primarily bridging finance solutions, ranging between 12 to 18 months, with loan-to-value (LTV) ratios maintained conservatively – up to 75 per cent for residential assets and around 60 to 65 per cent for commercial properties. Each lending decision is backed by independent RICS valuations, thorough legal due diligence and ongoing monitoring, ensuring that every project aligns with the fund’s lending criteria and investor expectations.
Given the current economic climate and concerns about market volatility, PMJ’s focus on asset-backed lending offers a reliable source of returns. While the fund targets above inflation growth in NAV, investors should be aware that returns are not guaranteed, and the investment’s performance is contingent on market conditions and the underlying borrowers’ performance.
How to participate and considerations for investors
For wealth-focused investors, PMJ’s new fund offers the opportunity to diversify their portfolios by tapping into the growing UK property debt market. It provides a route to invest in a proven lending strategy, backed by PMJ’s decade of experience and regional market knowledge, all while offering potential benefits from secured returns and inheritance tax efficiencies.
However, it is important to remember that the fund is only suitable for sophisticated investors who understand the risks of investing in property finance. As an unregulated alternative investment fund (AIF), it is not subject to the same FCA protections as more traditional financial products. Furthermore, while the fund aims to deliver steady returns and tax advantages, investors should seek professional advice before investing, particularly in understanding how BR could impact their tax planning and estate management.
A note on compliance and risk
The PMJ Private Credit No 1 Fund is an unregulated alternative investment vehicle, meaning it is not authorised or overseen by the FCA. This type of investment carries inherent risks, including the potential for loss of capital and limited liquidity. The fund’s performance may be affected by various market and borrower-related factors and, as such, investors are strongly advised to seek professional guidance before committing to an investment.
Investing in PMJ Private Credit No 1 Fund may not be suitable for all investors, and prospective investors should be prepared to lose their invested capital. The investment is illiquid and subject to an initial two-year lock-in period, with redemptions subject to fund liquidity thereafter. Returns are not guaranteed, and investors should understand the full risk profile before participating.
Invest with confidence and security
If you are an experienced investor, family office or financial advisor looking for opportunities to diversify your portfolio with a secure, asset-backed investment strategy, the PMJ Private Credit No 1 Fund could be your gateway to steady returns in the property finance market. To find out more about how you can become a part of this new opportunity, contact Investment Director Damian Ainsley or speak with a trusted financial advisor today.
Please note that this article is intended for informational purposes only and does not constitute financial advice or an offer to invest. All prospective investors are advised to seek independent financial, tax and legal advice before making any investment decisions.