Perch Capital is a mortgage investment fund that invests in short-term first and second position residential mortgages. Unlike high interest savings accounts or GICs which offer guaranteed but limited returns, alternative investments such as mortgage funds can provide an opportunity to earn higher returns on a risk-adjusted basis.
Perch Capital has a target yield of 9.00% on a 1-year term, with distributions paid monthly.
Originally launched in May 2022 to a closed group of investors, the mortgage investment fund saw high demand early on, leading Perch to expand access less than 1 year later.
“The past year has been tough for investors. Many traditional investment portfolios saw equities and bonds take a big hit, and higher than expected inflation has eroded purchasing power for those living on fixed income,” said Alex Leduc, CEO of Perch.
“Investments such as Perch Capital can help by generating additional monthly income and preserving capital, while reducing the volatility in their returns. We’re excited to offer retail investors a vehicle that, historically, has been reserved for high-net-worth institutional investors and to democratize access to alternative investments.”
Perch Capital lends to higher quality borrowers than the average mortgage investment fund, which in turn reduces the risk of loan default. Typical borrowers in Perch Capital’s mortgage portfolio have an average credit score of 800 and household income of $140,000, which is similar to what you’d expect to find with a bank portfolio.
As a testament to that loan quality, Perch Capital has experienced no loan losses or arrears since inception.
Leveraging Perch’s automation and analytics technology, Perch Capital manages deal flow and risk mitigation at scale, translating to lower operational overhead and higher potential returns for investors.
Investment in Perch Capital is offered solely through Tactex Asset Management and AcreageWay, registered Exempt Market Dealers (EMDs) through the Ontario Securities Commission and other relevant regulatory bodies across Canada.
Perch raised $4 million in Series A funding from investors including Second Century Ventures, the strategic venture arm of the National Association of REALTORS®.