Advantages and disadvantages of a tailor made investment platform
ADVANTAGES:
- Customisable: the mortgage offer can be fully tailored to the specific needs of the investor. It is possible to target a specific part of the Dutch market or create a specific type of mortgage proposition (e.g. focused on sustainability).
- In control: the investor can be more directive than in collective structures, e.g. with regard to product conditions, pricing, credit decisions.
- Independent: no dependence on other investors in terms of timing, volume over time and performance of other investors.
- Option to be an originator and lender of record.
DISADVANTAGES:
- Costly process: tailor made mandates require a greater investment of resources and money, as in most cases a mortgage label has to be developed and launched. The documentation and structuring process can take a considerable amount of time, depending on the investor's requirements and experience.
- Less specific targeting: as the investor is the sole funder behind a mortgage label, the ability to focus on a specific type of mortgage exposure is limited. For a mortgage label to be a viable proposition and achieve the required investment and production volumes, it needs to target a sufficiently large part of the market.
- Continuity risks: because there is only one investor behind a mortgage label, that investor alone carries the visibility and reputation, which can pose risks in periods of low funding.
Collective investment structure
In most cases, a tailor-made investment solution is only efficient for investors with large investment mandates. An alternative investment structure that still allows for a high degree of tailoring to the needs of the investor, but is more suitable for smaller investment mandates (between €150 million and €5 billion), is a so-called collective platform. In this case, DMPM combines the investments of several investors within several plug-and-play investment options. Read more about the advantages and disadvantages of our collective investment platform.
