La Trobe outlasts to lead mortgage funds

Victoria's self-help home finance champ La Trobe Financial Services has reached a milestone this year, assisted by the strains in a once vibrant mortgage fund sector.

Greg O'Neill, chief executive of La Trobe, said yesterday the La Trobe Australian Mortgage Fund now held A$839 million in assets.

This puts the fund $283 million ahead of the next largest, Bendigo's Sandhurst Select Mortgage Fund, which shed one third of its assets over the year to June 2014.

Founded in 1952 by Ray O'Neill (the present CEO's father), La Trobe Financial Services, which is still privately held. reported operating income of $111 million in 2014, up $3 million. It has aggregate funds under management of $1.7 billion (up $100 million) and net assets of $75 million, up from $62 million in 2013.


Fund manager Fidante is preparing to make a final return to capital to investors in what was once Australia's largest mortgage fund, the Howard Mortgage Fund. The fund peaked during the 2000s at more than $4 billion, with around 30,000 investors.

Fidante recently advised investors that "the mortgage portfolio of the fund has now reduced to less than 50 mortgage loans, including a number of mortgage loans where the realisation process is complex."

Fidante has been making steady capital repayments since December 2012, when the decision was made to have an orderly wind-up of the fund. The amount of capital to be distributed in the final payment represents about 20 per cent of the capital value as at December 2012.

Howard Mortgage Fund investors have suffered some capital loss during the wind-down. In a notice sent out earlier this year Findante said the sale of the remaining assets resulted in a downward revaluation of the mortgage portfolio as at the end of June. As a result, unit holdings were reduced (by way of a cancellation of units) by 2.5 per cent.