An opportunistic, short-term commercial financing strategy focused on core U.S. markets.  Trez Capital Yield Trust US participates primarily in large scale residential lot development projects in major urban centres of Texas.  In addition to its commercial loan portfolio, up to 20% of net assets may be invested in equity positions and 10% may be invested in mezzanine loans. The investment objective is to preserve invested capital, while generating an attractive rate of income.

Fund Summary

Fund Manager: Trez Capital Fund Management Limited Partnership
Asset Class: Open-ended pooled mortgage fund
Fund Inception Date: January 2017
Strategy Inception Date: January 2013
Minimum Investment: CDN$5,000 (500 units)
Redemptions: 30 days' notice, subject to 1% retraction penalty if redeemed within 1st year
Eligibility: RRSP / RRIF / TFSA / RESP / RDSP / DPSP
FundSERV Codes: Series A CAD - TRZ360, Series F CAD - TRZ370
DRIP Eligible: Yes
Fund Assets (09/30/2017): $267,868,627

Case Studies

  • Dallas Mixed-Use Repositioning
     
    Dallas Mixed-Use Repositioning
    Loan: US$20,000,000 (Tranche B: US$10,000,000)
    Security Rank:1st mortgage (Deed of Trust)6 months (with extension option)
    Term:6 months (with extension option)
    Interest Rate:15.0% (on B Tranche)
    Loan-to-Value:38.0% (on B Tranche)
    Description:
    Investment in the Junior (B) tranche of a first mortgage secured by a mixed use property undergoing repositioning.
  • Dallas Lot Development
     
    Dallas Lot Development
    Loan: US$10,500,000
    Security Rank:1st mortgage (Deed of Trust)
    Term:36 months
    Interest Rate:10.0%
    Loan-to-Value:64.0%
    Description:
    Investment in a first mortgage secured by a 96.5 acre site. The subject property will be developed into 299 lots in two phases. 100% of the lots were presold to three prominent homebuilders prior to the mortgage funding date.
  • Conroe Lot Development
     
    Conroe Lot Development
    Loan: Loan Amount: US$17,200,000 Preferred Equity: US$2,200,000
    Security Rank:1st mortgage (Deed of Trust)
    Term:36 months
    Interest Rate:Fixed rate: 8.5%. Projected IRR: 23.3% (includes profit participation)
    Loan-to-Value:69.0%
    Description:
    Quasi joint venture financing for the servicing and development of 272 lots on a 111 acre site. 91% of the Phase I lots were presold.

Portfolio Composition

Cash (and Equivalents) $10,696,047
Other Assets $5,053,012
Limited Partnership Investments $3,006,888
Mortgage Investments $249,112,680
Total Assets $267,868,627
Credit Facility (Drawn) $2,930,462
Average Loan Size $4,017,946
Number of Loans 62
Weighted Average LTV 64.2%
Weighted Average Term-to-Maturity (Months) 17.7
Weighted Average Interest Rate 11.57%

Geographic Region

Dallas/Ft.Worth
60%
Houston
14.7%
Denver
9%
San Antonio
3.2%
Austin
3%
Nashville, TN
1.3%
United States - Other
3.1%
Cash and Other Assets
7%

Asset Class

Residential
90.8%
Retail
2.2%
Cash & Other Assets
7%

Security Rank

First Mortgages
83.3%
Second Mortgages
3.9%
Third Mortgages
4.8%
Cash and Other Assets
7.0%

Weighted Average Term to Maturity

Month-to-Month
0.0%
Zero to 6 Months
15.8%
6 Months - 12 Months
10.1%
12 Months - 18 Months
37.2%
18 Months - 24 Months
19.1%
24 Months - 36 Months
17.8%

Historical Performance

  2017 YTD 1 Year 3 Year 5 Year Since Inception
Trez Capital Yield Trust US (CAD)
Series F
6.1% 9.3% N/A N/A 10.9%
Trez Capital Yield Trust US (CAD)
Series A1
5.3% 8.1% N/A N/A 10.0%

1 A Series units were introduced on April 1, 2013.
Returns are reported as F Series.

2 Due to the inception of the fund in January 2013, the return for 2013 is an annualized return.

3 The fund was established on Dec 8, 2016 and assets were transferred from Trez Capital Yield Trust US ("TCYT US") pursuant to a unitholder-approved reorganization of TCYT US whereby the CAD denominated units of TCYT US were cancelled and an equal number of units of Trez Capital Yield Trust US (Canadian $) were issued to unitholders.

 

Trez Capital Yield Trust US (CAD) distributes 100% of its net income annually. Unitholders receive quarterly distributions at a rate of 2.0% on Series F units and 1.75% on Series A units, payable fifteen days following each calendar quarter end. Distributions are paid in the currency of the units denomination. All residual income attribuable to each unit series is distributed by way of an annual top-up distribution, which is paid in mid-March following the conclusion of the annual audit of the Trust.

Distribution History

 
Year Series Q1 Q2 Q3 Q4 Total Quarterly Distribution Top-up1 Annual Distribution
2017 F $0.200 $0.200 $0.200    $0.600    
  A $0.175 $0.175  $0.175   $0.525    
20162 F $0.200 $0.200 $0.200   $0.200 $0.800  $0.092 $0.892
  A $0.175 $0.175  $0.175  $0.175 $0.700  $0.090 $0.790
20152 F $0.200 $0.200 $0.200 $0.200 $0.800 $0.674 $1.474
  A $0.175 $0.175 $0.175 $0.175 $0.700 $0.589 $1.289

1 Based on a weighted average return to Unitholders, this amount is an estimate of the average top up distribution paid. Those invested for less than a full one year period will receive a prorated allocation, and those invested in the dividend reinvestment plan will receive a slightly higher top up due to the effects of compounding. Top-up distributions are paid following the conclusion of the annual audit, to all registered unitholders on the record date December 31.

2 Due to the fund being established in January of 2017 distributions prior to 2017 are reported as the returns on Trez Capital Yield Trust US CAD units.

 

 

 

Distribution Schedule

  Record Date Expected Pay Date
First Quarter March 31 April 15
Second Quarter June 30 July 15
Third Quarter September 30 October 15
Fourth Quarter December 31 January 15
Annual Top Up December 31 March 15

Note: Distributions are taxed in the year that they are earned. T3 slips are distributed to all unitholders in March of each year following completion of the year end audit and payment of the annual top-up distribution.

 

Fees

Management Fee 1.5% of the Average Annual Gross Assets relating to the F Series and A Series units.
Incentive Fee 10% of the Net Income for each unit series after deduction of the Management fee.

Minimum Investment

Province Minimum investment when relying on accredited investor exemption1 Minimum investment when relying on offering memorandum exemption2 Minimum investment amount exemption3
Alberta $5,000 $5,000 $150,000
British Columbia $5,000 $ 5,000 $150,000
Manitoba $5,000 N/A $150,000
New Brunswick $5,000 $5,000 $150,000
Newfoundland & Labrador $5,000 $5,000 $150,000
Nova Scotia $5,000 $5,000 $150,000
Ontario $5,000 $5,000 $150,000
Quebec $5,000 N/A $150,000

1 Accredited Investor Exemption: There is no regulatory minimum subscription amount for investors qualifying under the Accredited Investor Exemption. However, the minimum initial purchase amount established by the Manager is $5,000.

2 Offering Memorandum Exemption: There is no regulatory minimum subscription amount for investors qualifying under the Offering Memorandum Exemption. However, the minimum initial purchase amount established by the Manager is $5,000. (Only available for residents of British Columbia, Newfoundland & Labrador, Ontario, Alberta, Saskatchewan, Nova Scotia, and New Brunswick, subject to certain restrictions)

3 Minimum Amount Exemption (not available to individuals): The minimum initial subscription amount for investors qualifying under the Minimum Amount Exemption is $150,000 in each province listed above.

 

 

 

to invest, contact your financial advisor, or follow the procedure outlined below.

TREZ CAPITAL YIELD TRUST US is sold BY offering memorandum and is available to:

  • Residents of British Columbia or Newfoundland & Labrador, who are provided with an offering memorandum and complete a risk acknowledgment form (45-106F4).  Investment relies on the Offering Memorandum exemption.
  • Residents of Ontario, Alberta, Saskatchewan, New Brunswick, or Nova Scotia, who are provided with an offering memorandum and complete a risk acknowledgement form (45-106F4) with Schedule I and Schedule II (Classification of Investors and Investment Limits).  Investment relies on the Offering Memorandum exemption.
  • Residents of Manitoba or Prince Edward Island, who are provided with an offering memorandum and complete a risk acknowledgment form (45-106F4) and an eligible investor certification.  Investment relies on the Offering Memorandum exemption.
  • Residents of Quebec who qualify as accredited investors and complete an accredited investor certification and a risk acknowledgement form (45-106F9 - for individual investors only).  Investment relies on the Accredited Investor exemption. or;
  • By investing a minimum of $150,000 (for entities only).  Investment relies on the Minimum Amount exemption.

How To Invest

Units may be purchased directly from Trez Capital, or through a self-directed registered plan administered by one of the following:

  • Olympia Trust Company
  • Blue Shore Financial
  • Computershare Trust Company
  • Canadian Western Trust
  • Scotia Wealth Management

 

Fund Fact Sheets

  • Fund Fact Sheet (I Series) CAD

    Fund Fact Sheet (I Series) CAD
    September 2017 - Trez Capital Yield Trust US Fund Fact Sheet (I Series) CAD
    View/Download »

Quarterly Unitholder Reports

  • September 2017 Quarterly Report

    September 2017 - TCYT US Quarterly Report (CAD)
    View/Download »

Subscription Documents

  • Corporate Investor Application Form

    October 2017 - Fund Application form for Corporation, Partnership, or Trust
    View/Download »
  • Exempt Market Dealers - Subscription Form (Corporate)

    October 2017 - Exempt Market Dealers - Subscription Form (Corporate)
    View/Download »
  • FundSERV Brokers - Subscription Form (Corporate)

    October 2017 - FundSERV Brokers - Subscription Form C$ (Corporate)
    View/Download »
  • FundSERV Brokers - Subscription Form (Individual)

    October 2017 - FundSERV Brokers - Subscription Form (Individual)
    View/Download »
  • Individual Investor Application Form

    October 2017 - Fund Application form for Individual investors (or joint investors)
    View/Download »
  • Institutional Investor Application Form

    October 2017 - Fund Application form for Institutional, Pension Plan, or Investment Fund
    View/Download »

Offering Documents

  • Offering Memorandum

    August 2017 - Trez Capital Yield Trust US Offering Memorandum
    View/Download »
  • Declaration of Trust (CAD)

    December 2016 - Trez Capital Yield Trust US (Canadian $)
    View/Download »

The Declaration of Trust for Trez Capital Yield Trust US (Canadian $) has been posted for informational purposes in connection with the special meeting of unitholders of Trez Capital Yield Trust US to be held on December 9, 2016, and remains subject to further change and finalization prior to the effective date of the reorganization of Trez Capital Yield Trust US, which is conditional upon, among other things, receipt of unitholder approval.