linebg

EMD, portfolio managers, institutional, family offices, and more

AP Capital MIC

24 Fund Facts | Monthly Reports | Fund SummaryFact FridayAP on all the social networks 

As a financial advisor, investment advisor, institutional investor, family office, or other registered firms, you want the highest quality investment option for your clients and their portfolio.

In the alternative lending sector, AP Capital Mortgage Fund (a Mortgage Investment Corporation) may be that for you or your clients.  AP Capital has been raising capital through CIRO and EMD firms for over 10 years and we appreciate the many established relationships across Canada.  AP Capital MIC is available in multiple classes of shares depending on the status of firm and whether commission-based or fee-based. We work closely with EMDs, CIRO investment dealers, as well as institutional investors, family offices, and high net worth individuals. We accept investments from corporations and trust investors as well as Registered Funds (RRSP, TFSA, etc) and cash account investments. Funds in AP Capital Mortgage Fund are raised primarily through the Offering Memorandum exemption.   Please contact us to learn more and to receive a copy of our Offering Memorandum and investment presentation deck.

Treasury is open for 12 scheduled share issuances per year.

The fund’s Class F shares are available via FundSERV: QWE834

FAQ

What is a MIC?

A Mortgage Investment Corporation (MIC) is a company created by virtue of the Canadian Income Tax Act which enables investors to invest in a pool of Canadian mortgages. Investing in mortgages has long been an investment vehicle primarily available to sophisticated and affluent investors.  AP Capital allows investors at all levels to share in the returns generated by mortgages on Canadian real estate.

How does a MIC work?

Investors’ capital is pooled and used to fund mortgages – mortgages secured by Canadian real estate. By their nature, mortgages generate a yield through interest rates and fees charged to borrowers.  As opposed to many other real estate investments, MICs generate monthly cash flow through interest payment made by borrowers. The Income Tax Act requires that 100% of a MIC’s annual net income be distributed to its shareholders in the form of a dividend.

I thought mortgages were provided by major Canadian lending institutions?

Full-term (e.g. 25-year term) conventional mortgages are most often provided by large Canadian lending institutions.  Alternative mortgage lenders like AP Capital offer short-term (1 year term) mortgages that Canadian banks often do not offer.  These are desired by some Canadians when the borrower requires funds for a minimal amount of time.  Canada’s major financial institutions do not commonly provide these short-term mortgages.

Who are the applicants and borrowers from AP Capital mortgage fund?

Our underwriting team has seen a variety of applicant types over our 17 year history and nearly 2,200 mortgages funded. The first category of borrower is business-for-self individuals that fall outside of conventional bank underwriting guidelines. Through tax planning, these applicants can justify higher interest rates from AP Capital as these higher costs are often offset through business/personal income allocations and associated taxes. The second category of borrowers are those that otherwise could qualify with a bank lender, however, given time urgency, they come to AP as funding can occur in as little as 2 to 3 business days. The third category of borrowers are investor-class and the business model of these applicants is based on generating capital gains in their real estate portfolio. They often do not show consistent taxable income year over year, leaving bank financing challenging. AP is able to leverage their real estate assets to provide well secured loans. A fourth category includes a few different scenarios where second mortgages may be secured. These include applicants requiring debt consolidations or bridge financing solutions. A common scenario is where breaking or refinancing an existing fixed rate bank mortgage may be cost prohibitive when compared to securing an AP Capital second mortgage. 

While borrower scenarios vary, our priority is in securing mortgages against marketable properties at conservative loan to values. 

What about the liquidity of my investment?

By their nature, non publicly traded MICs are not considered liquid investments when compared to equities traded on open exchanges. Understanding AP Capital’s business helps investors appreciate the liquidity of their investment. Investor capital is pooled and placed in short-term mortgages. To achieve the target rate of return, the company works to place investor capital in mortgages; rather than holding funds in the fund’s cash account. The company also plans for monthly dividend payments and redemption requests from its investors. AP Capital aims to fulfill investor redemption requests within 15 days. If investors can plan ahead for their retraction of shares, the corporation would prefer capital requests made 60 days prior to the company’s year-end (December 31).  Further details are found in AP Capital’s Offering Memorandum (OM).

Are there restrictions on how a MIC operates?

Yes, The Canadian Income Tax Act (Section 130.1) clearly outlines rules that all MICs must follow. They include:

  • A MIC must have at least 20 shareholders
  • No shareholder may hold more than 25% of total capital
  • At least 50% of a MIC’s assets must be comprised of Canadian residential mortgages, and/or cash and insured deposits at Canada Deposit Insurance Corporation member financial institutions
  • A MIC may invest up to 25% of its assets directly in real estate, but may not develop land or engage in construction. This ceiling on real estate holdings does not include real estate acquired as a result of mortgage default
  • A MIC is a flow-through investment vehicle, and distributes 100% of its net income to its shareholders
  • All MIC investments must be in Canada.
  • A MIC’s annual financial statements must be audited

Fund Facts

Effective DateOctober 31, 2024
Mortgages Under Administration$241 MM
Mortgages funded since inception$1 B
Mortgages in Portfolio401
Mortgages funded since inception2,328
Portfolio Loan to Value (LTV)57%
Mortgage funds in BC92%
Mortgage funds in AB8%
Mortgage funds in 1st position80%
Mortgage funds in 2nd position20%
Residential Mortgages96%
Mortgages secured by:
Single Detached Homes59%
Serviced & Urban Lots29%
Condos6%
Townhouses2%
Owner Occupied 40%
Average Credit Score of Borrowers 714
% of portfolio in foreclosure5.41%
Average LTV on foreclosures57%
10 year total non-recovered funds0.17%
Consecutive dividends paid to shareholders176
Class B shares8.50% p.a.
Class F shares9.00% p.a. (less advisor fee)
Class I shares9.50% p.a.
Top-Up / 13th distributionIf applicable, all share classes receive top-up annually after audited yield is calculated
Shareholder Accounts1,571
Shareholders choosing monthly cash distribution51%
Shareholders choosing share re-investment (DRIP)49%
Shareholders with open/cash investment67%
Shareholders with registered funds (RRSP, TFSA, etc)33%

 

Monthly Reports

Monthly Report OCTOBER 2024 

Monthly Report SEPTEMBER 2024

Monthly Report AUGUST 2024

Monthly Report JULY 2024

Monthly Report JUNE 2024

Monthly Report MAY 2024

Monthly Report APRIL 2024

Monthly Report MARCH 2024

Monthly Report FEBRUARY 2024

Monthly Report JANUARY 2024

Monthly Report DECEMBER 2023

Monthly Report NOVEMBER 2023

Monthly Report OCTOBER 2023

Monthly Report SEPTEMBER 2023

Monthly Report AUGUST 2023

Monthly Report JULY 2023

Monthly Report JUNE 2023

Monthly Report MAY 2023

Monthly Report APRIL 2023

Monthly Report MARCH 2023

Monthly Report FEBRUARY 2023

Monthly Report JANUARY 2023

Monthly Report DECEMBER 2022

Monthly Report NOVEMBER 2022

Monthly Report OCTOBER 2022

Monthly Report SEPTEMBER 2022

Monthly Report AUGUST 2022

Monthly Report JULY 2022

Monthly Report JUNE 2022

Monthly Report MAY 2022

Monthly Report APRIL 2022

Monthly Report MARCH 2022

Monthly Report FEBRUARY 2022

Monthly Report JANUARY 2022

Monthly Report DECEMBER 2021

Monthly Report NOVEMBER 2021

Monthly Report OCTOBER 2021

Monthly Report SEPTEMBER 2021

Monthly Report AUGUST 2021

Monthly Report JULY 2021

Monthly Report JUNE 2021

Monthly Report MAY 2021

Monthly Report APRIL 2021

Monthly Report MARCH 2021

Monthly Report FEBRUARY 2021

Monthly Report JANUARY 2021

Monthly Report DECEMBER 2020

Monthly Report NOVEMBER 2020

Monthly Report OCTOBER 2020

Monthly Report SEPTEMBER 2020

Monthly Report AUGUST 2020

Monthly Report JULY 2020

Monthly Report JUNE 2020

Monthly Report MAY 2020

Monthly Report APRIL 2020

Monthly Report MARCH 2020

Monthly Report FEBRUARY 2020

Monthly Report JANUARY 2020

Monthly Report DECEMBER 2019

Monthly Report NOVEMBER 2019

Monthly Report OCTOBER 2019

Monthly Report SEPTEMBER 2019

Monthly Report AUGUST 2019

Monthly Report JULY 2019

Monthly Report JUNE 2019

Monthly Report MAY 2019

Monthly Report APRIL 2019

Monthly Report MARCH 2019

Monthly Report FEBRUARY 2019

Monthly Report JANUARY 2019

Monthly Report DECEMBER 2018

Monthly Report NOVEMBER 2018

Monthly Report OCTOBER 2018

Monthly Report SEPTEMBER 2018

Monthly Report AUGUST 2018

Monthly Report JULY 2018

Monthly Report JUNE 2018

Monthly Report MAY 2018

Monthly Report APRIL 2018

Monthly Report MARCH 2018

Monthly Report FEBRUARY 2018

Monthly Report JANUARY 2018

Quarterly Report Fall 2017

Quarterly Report Summer 2017

Quarterly Report Spring 2017

Quarterly Report Winter 2017

Quarterly Report Fall 2016

Quarterly Report Summer 2016

Quarterly Report Spring 2016

Quarterly Report Winter 2016

Quarterly Report Fall 2015

Quarterly Report Summer 2015

Quarterly Report Spring 2015

Quarterly Report January 2015