Australian Unity Investments is reviving its mortgage investments business, switching from its traditional pooled fund approach to a "contributory" model.In December 2014 Australian Unity acquired Owen Law Trust Ltd, the manager of the Owen Law First Mortgage Income Fund, which had about A$50 million of funds under management.The Owen Law fund is a contributory fund, which means that each loan is set up in a sub-trust and investors choose the particular loan or loans they want to invest in.A contributory scheme is made up of multiple sub-trusts and each may have a different group of investors.In a more familiar pooled fund investors' funds are linked, and assets and returns are the same for each investor.Pooled mortgage funds have a long history in Australia and were popular with investors looking for a conservative asset with a reliable yield.But in 2008 the Government introduced a guarantee on bank deposits and investors made a flight to safety. Most mortgage funds froze redemptions and many of them have been wound up since.Australian Unity had two mortgage trusts, with a total of about $2 billion of funds under management. One was closed in 2011 and the other in 2012.Since taking over Owen Law Trust, now called the Australian Unity Select Mortgage Income Fund, Australian Unity has been building up a distribution network of financial planners. The fund has increased to $90 million of funds under management.It has 21 loans in its portfolio. Twelve of them are construction loans and most of the others are related to small-scale property development or construction. Its maximum loan is around $15 million and the maximum loan-to-valuation ratio is 65 per cent. It is writing two or three loans a month.The minimum loan term is 12 months and the maximum 24 months. Interest rates are around nine per cent and between seven per cent and 7.5 per cent is currently being passed on to investors.The fund has no arrears or defaults and investors have had an unbroken flow of monthly payments under Australian Unity's ownership.Australian Unity Investments head of mortgage Roy Prasad said they spent a lot of time looking at the best way of re-entering the mortgage fund market.Prasad said: "I liked the contributory concept for a few reasons. It matches investors with loans. Investors know the term and when they will get their money out."The new breed of contributory mortgages has addressed many of the problems inherent in the previous pooled structure."