FAQs

Frequently Asked Questions

LEARNING

Accessing
Private Credit

Investing in private debt has never been easier for investors. Using the interval fund structure investors can access CREMX through tickerized purchase. This means no sub docs, no K-1s, no accreditation standards necessary and even no minimum. CREMX sits along side all your other tickers in the client account and at most major custodians, comes with no ticket charges. 

Knowledge

Main Objective

Whether you need lower volatility, uncorrelated returns or premium income, CREMX might be the next best tool for you portfolio.

Learn More

The Fund allocations are subject to change. Data as of 10/31/2024. See disclosures at bottom.

FAQs

What is an interval fund?
An interval fund is a 1940 act registered, closed end, continually offered investment fund that lets investors buy shares at any time but only allows them to sell shares back to the fund at specific intervals (like quarterly). This structure is designed to invest in assets that might take longer to sell, like real estate or private loans.
How is an interval fund different than a typical mutual fund?
While mutual funds let you buy and sell shares daily, interval funds only allow redemptions (selling back shares) at set times. This makes interval funds less liquid but enables them to invest in less liquid, potentially higher-return assets.
What qualifies as commercial real estate?
Commercial real estate includes properties used for business purposes, like office buildings, retail centers, warehouses, apartment complexes, and hotels.
What is a bridge loan?
A bridge loan is a short-term loan used to "bridge" a gap in financing. In real estate, it helps property owners or developers fund a project until they secure long-term financing or sell the property.
What are the main purposes for the loans in CREMX?
Loans in CREMX are typically used for providing financing for property owners or developers to fund a project until they secure long-term financing or sell the property. Most commonly they see refurbishments, improvements and building transformations.
What types of properties does CREMX hold?
CREMX focuses on various commercial real estate properties, including multifamily housing (apartments & condos), mixed use properties, warehouses, hotels, commercial use residential and office buildings.
What types of projects does CREMX tend to hold?
The fund invests in projects like property renovations, new developments, or property repurposing in order to create new value for the property.
How is Loan-to-Value calculated?
Loan-to-Value (LTV) measures the loan amount as a percentage of the property's value. For example, if a property is worth $1 million and the loan is $750,000, the LTV is 75%. Lower LTVs generally indicate less risk for the lender.
What is duration and why does it matter?
Duration measures the length of time it will take the buyer to recoup their principal. It is generally shorter than the stated maturity dates, as the interest payments will decrease the time to recoup. In general, a shorter duration less risk than longer duration.
How does CREMX compare to other private credit funds?
CREMX focuses specifically on loans backed by commercial real estate, offering diversification and seeking relatively stable NAV compared to other private credit funds, which might include riskier loans.
How can private debt help my portfolio?
Private debt, like the loans in CREMX, seeks to provide steady income and diversification. It tends to be less correlated with stock market ups and downs, which can help reduce overall risk in your portfolio.
Why should I add something less liquid to my portfolio?
Less liquid investments often come with higher potential returns and less day to day volatility because they invest in assets that take longer to sell but seek to offer steady cash flow, like real estate loans. Adding these can balance the risk and return of your overall portfolio.
What does it mean to be 1st senior secured?
"1st senior secured" means the loan has the first claim on the property if the borrower doesn’t repay. This gives the lender a highest chance of recovering their money, reducing risk.
How does CREMX do in falling interest rate environments?
In falling rate environments, CREMX yield may fall as many of the loans for floating rate and based on SOFR. That being said, as rates fall, the spread and which loans are written, typically increase. Many of the loans also offer a “floor” provision that helps from sharply declining interest rates.
How does CREMX do in rising interest rate environments?
Since CREMX loans are often short-term and can adjust rates, the fund may perform well in rising-rate environments, as its loans seek to provide higher returns to match the market.
What are the minimums for CREMX?
CREMX does not impose any minimums. At a fund NAV price of $25 any investor can buy as little as 1 share for $25.
What is the tax status of the income?
Income from CREMX is often taxed as 1099 ordinary income, but qualifies under section 199a. of the 2017 JOBS act as real estate income. This means income from CREMX will receive a 20% tax benefit as long as this tax statue remains in effect.
Why is CREMX quarterly liquidity instead of daily?
CREMX has quarterly liquidity so it can invest the assets into private market securities. Because private markets do not have daily liquidity, the fund managers uses interval windows to match up investor liquidity demands with fund asset deployment.
Isn’t commercial real estate struggling right now?
Many of the headlines circulating around commercial real estate involve their valuations dropping. This would cause any equity owner to experience fluctuations in value. Because CREMX focuses solely on 1st senior secured debt over short duration and low LTVs, these types of fluctuations usually do not impact the NAV or loan values.
How is this different than any other REIT available?
Unlike a typical REIT (Real Estate Investment Trust), which owns properties, CREMX primarily invests in loans secured by real estate. This seeks to provide a steady income stream without directly owning properties, which can reduce certain risks.has context menu.

Have Questions?

Let's Talk

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.