Wholesale Investment Providers – Who Can You Trust?

27 June 2023

Wholesale investment offers provide strong returns and unique opportunities not available in the retail investment market.

However, they are not regulated in the same way and the Financial Markets Authority (FMA) has recently raised concern about “undesirable practices” being used to promote such investment opportunities.

Last October the FMA warned nine New Zealand property investment firms who were offering unregulated products to non-expert investors, questioning the legitimacy of their wholesale investor certificates and warning that investment risks were being downplayed, potentially exposing investors (many of whom are retirees) to financial loss.

Alpha First Mortgage Investments’ Managing Director, Olivia Fraser, says the company’s investors always come first and stringent safeguards are in place to ensure money is handled appropriately at all times.

“Alpha First operates differently to many other Wholesale Investment providers in the market,” Fraser explains. “Firstly, we are not a managed fund, nor do we pool funds. We are not a finance company and do not pass costs onto our investors – we simply receive a fee straight from the borrower in exchange for finding investors on their behalf.”

Alpha First only presents investment opportunities that are secured by first mortgages over the borrower’s property. Renowned law firm Simpson Grierson ensures all securities are in place and each loan is documented in line with its proposal, and all funds are held and dispersed via Alpha First’s trust account which is operated by Ellice Tanner Hart Lawyers.

“Our investors have control and choose the opportunities they wish to invest in, so they can customise their portfolio. Some people wish to invest in commercial developments only, while others may prefer townhouses, land subdivisions or rural land projects. Investors know exactly where and what their funds are secured over at all times.”

Fraser says the company always takes a conservative approach to Loan to Value Ratios and only in rare circumstances would they ever exceed 55% LVR.

“We also ensure our due diligence is thorough so people can make a fully informed investment decision. Transparency is key and we provide a comprehensive Investment Information Pack for each loan opportunity for potential investors to review and consider.

“We assess a borrower’s capability, past experience, professional advisers, and their repayment/exit strategy, and will provide a valuation report, credit report, financial trading reports, financial forecasts and works programme, plus other relevant information. We inspect every security property and meet borrowers personally before approving any loan.”

Fraser says Alpha First’s investors sincerely appreciate this extra effort and take comfort in the fact that every loan is thoroughly investigated to minimise risk and maximise returns. The company has received the following feedback about their approach:

“We are conservative investors, and value the security of Alpha’s policy of having our name registered on the mortgage of the borrower’s property, and that it is first mortgage security. We also like the fact that Alpha outsource the financial and legal work involved, to two independent, and reputable accounting and legal firms.” – John

“I am very impressed with how thorough your investigations of potential borrowers are.” – Clary

“We have found Alpha First to be reliable, trustworthy, and easy to deal with. Their communication is excellent but most important to us is that their investment opportunities have been sound, and interest paid on time, every time.” – Steve

“I have been impressed with Alpha First in the way in which my interest comes direct from an accountancy firm and is always on time. Communication with Alpha First is also good and transparent.” – Michael

Fraser says investors can rest assured that Alpha First Mortgage Investments operates to the highest standards and scrutiny. “We are proud to bring you wholesale investment opportunities that have your best interests in mind.”