Why mortgages belong in investment portfolios
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CMI Financial Group details how mortgage investments can be a lucrative portfolio stabilizer – and why partnering with an industry leader makes all the difference
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AS ONE of the few fully integrated private mortgage lending and investing firms in Canada, CMI Financial Group (CMI) stands out in a crowded landscape dominated by small regional players. Leveraging a national network of more than 12,000 broker partners who source mortgages from coast-to-coast, CMI’s mortgage investment programs help investors amplify returns while adding ballast to their investment portfolios.
“Private mortgage investments can provide higher yields compared to traditional fixed-income securities,” says Chris Baker, CMI Mortgage Investments’ vice president of investment sales. “A leading private mortgage portfolio like CMI’s can yield between six percent and 16 percent annually, depending on the risk profile. With such compelling risk-adjusted returns, private mortgages have become one of the fastest-growing segments of alternative investments.”
CMI Financial Group (CMI) is a fully integrated alternative mortgage lending and investment company, offering end-to-end private mortgage services for mortgage brokers and investors through its four interrelated businesses: CMI Canadian Mortgages Inc., CMI Mortgage Investments, CMI MIC Funds, and CMI Mortgage Servicing. As an award-winning industry leader and one of Canada’s fastest-growing companies, CMI has funded nearly $3 billion in mortgages and manages nearly $1 billion in assets. CMI helps investors achieve competitive fixed-income returns by offering high-quality, real estate-backed mortgage investment solutions tailored to their investment objectives and risk tolerance.
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The CMI Difference
Vast partner network. Our national community of more than 12,000 broker partners source high quality mortgage opportunities from coast-to-coast.
“Private mortgage investments are not only about higher yields, strategic diversification, and steady income, but also about making a positive difference in people's lives and communities. This dual benefit makes them a valuable addition to any investment portfolio”
Chris Baker,
CMI Financial Group
As uncertainty continues to overshadow public markets and the broader economy, advisors and investors are increasingly seeking refuge and opportunities in the niche realm of alternative investments. This shift aligns with the strategies of global private asset and alternative fund managers, who are expanding their client base beyond the usual pension funds, endowments, and other institutional investors.
According to Preqin, alternative assets under management have more than tripled since 2015 and are expected to surpass $23 trillion by 2026. One of the biggest factors driving this growth is the increasing demand for diversification. Traditional portfolio construction methods relying solely on stocks and bonds no longer provide sufficient diversification during periods of volatility.
Today's investors face universal challenges: rising inflation requires higher returns to maintain purchasing power over time, while opportunities for alpha in traditional stocks and bonds have become scarcer. Last year’s bond market selloff has left investors searching for more reliable portfolio stabilizers, and the demand for steady income generation remains constant.
Investors are increasingly turning to alternative investments to achieve higher returns, reduce volatility, and diversify their portfolios. Among these alternatives, private credit, particularly private mortgages, has emerged as a popular choice for both high-net-worth individuals and institutions. According to Baker, private mortgage investments offer flexibility and the potential for higher yields compared to traditional fixed-income securities. With their ability to provide steady income and minimal correlation with public markets, private mortgages serve as a stabilizing force within investment portfolios.
In the residential real estate market, private lending refers to short-term mortgage financing primarily for borrowers unable to qualify for traditional bank mortgages. These loans are typically provided by mortgage investment corporations and individual private lenders, which include individual and institutional investors, conglomerates, or high-net-worth groups.
Private lenders play a crucial in offering liquidity and financing options to the growing segment of borrowers who seek alternatives to those provided by major banks. This includes small business owners, gig economy workers, and individuals with less-than-perfect credit. Private lenders offer greater flexibility in the mortgage application process, often focusing on factors like equity, cash flow, and exit strategy, without the stringent stress tests required by traditional lenders.
Baker explains that private mortgage borrowers are usually financially stable and responsible but face hurdles in meeting increasingly strict conventional lending criteria. Private lenders like CMI fill this gap, offering a lifeline to underserved borrowers, helping them achieve homeownership or leverage their home equity for other financial needs and goals.
Data from Canada Mortgage and Housing Corporation (CMHC) shows that the share of new mortgages extended by private lenders increased to eight percent in the first quarter of 2023 – up from 5.3 percent in 2021. CMHC believes private and alternative lenders accounted for 10 percent to 12 percent of the country’s mortgage market as of 2023 – and that share has been growing in recent years.
“For investors, funding these mortgages enables strategic portfolio diversification, while borrowers gain access to flexible financing solutions,” adds Baker. “This mutually beneficial relationship injects liquidity into Canada's real estate market.”
As both investors and borrowers seek stability and growth, CMI’s unique model offers a compelling solution that bridges the gap between opportunity and need.
CMI offers two innovative programs – CMI MIC Funds and CMI Mortgage Investments – designed to help investors achieve competitive fixed-income returns for their portfolios. These programs provide broad exposure to residential real estate markets across Canada, catering to investors with various risk appetites and financial goals.
The CMI Mortgage Investments program is tailored to high-net-worth (HNW) and ultra-high-net-worth (UHNW) investors seeking bespoke mortgage investment opportunities. This full-service program offers a seamless investment experience, handling everything from sourcing and underwriting to managing the mortgage throughout its term, ensuring that investors can focus on returns rather than administrative details.
“Our program curates whole-mortgage investment
With a track record of nearly $3 billion in funded mortgages and nearly two decades in the industry, CMI has emerged as one of Canada's leading private mortgage lending and investment firms. The company's commitment to transparency, integrity, and operational excellence has earned it accolades as one of Canada’s top growing companies, top private lenders, and premier mortgage employers.
“Our commitment to excellence, transparency, and customized solutions sets us apart,” says Baker. “We bridge the gap between traditional fixed-income investments and alternative strategies, helping investors build robust, diversified portfolios that are resilient in the face of market volatility.”
With CMI’s innovative investment programs, advisors can confidently discuss this strategy with their clients, knowing they are partnering with an industry leader dedicated to delivering high-quality, well-managed mortgage solutions. With its commitment to innovation and tailored solutions, CMI is setting new standards in how investors can achieve their financial goals while contributing to the growth and stability of Canada's real estate market.
As Baker puts it, “Private mortgage investments are not only about higher yields, strategic diversification, and steady income, but also about making a positive difference in people’s lives and communities. This dual benefit makes them a valuable addition to any investment portfolio.”
opportunities, giving investors control over their portfolios while providing access to a diverse range of high-quality mortgages,” explains Baker. “Each investor is paired with a dedicated Investment Account Manager who ensures a seamless and customized experience.”
This personalized approach is further enhanced by CMI’s unique Mortgage Matching Process, which ensures that investors receive only those opportunities best suited to their specific needs and preferences, including their yield expectations and risk tolerance. “We provide a robust due diligence package for every investment opportunity,” Baker says. “The entire investment process is fully digital, ensuring transparency and efficiency.”
Because whole-mortgage investing involves funding an entire mortgage transaction, the CMI Mortgage Investments program is suited to accredited individuals with at least $1,500,000 in liquid capital.
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The rise of private mortgage lending
Revolutionizing private mortgage investing
Published July 15, 2024
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“Our program curates whole-mortgage investment opportunities, giving investors control over their portfolios while providing access to a diverse range of high-quality mortgages”
Chris Baker,
CMI Financial Group
Full-service investment experience. CMI Mortgage Services provides comprehensive in-house administration for every CMI mortgage throughout its lifecycle.
Track record. CMI has nearly 20 years of experience in the mortgage industry with nearly $3 billion in successful mortgage fundings.
Award-winning reputation. CMI earned a place on the Globe and Mail’s Report on Business ranking of Canada’s Top Growing Companies for four consecutive years (2020 through 2023).
In 2023, OSFI proposed even stricter mortgage guidelines under B-20, including restricting the mortgage size borrowers are eligible for, limiting debt service coverage, and implementing interest rate affordability stress tests. The regulator launched a public consultation on the matter.
Factors driving growth in private MORTGAGES
CMHC believes private and alternative lenders accounted for roughly 10% to 12% of the country’s mortgage market as of 2023 – and that share has been growing in recent years.
Separate data from Statistics Canada showed that the market for mortgage investment corporations (MICs) – a major source of private mortgage financing – grew more than threefold between 2007 and 2021.
Seeking shelter in alternatives
The CMI difference
For investors who don’t meet the capital requirements for whole-mortgage investing, CMI MIC Funds offer an accessible entry point into the private mortgage market. These funds provide a gateway for investors to tap into diversified residential mortgage portfolios with a minimum investment of just $5,000.
“Our MIC funds provide investors access to the mortgage investment market through a professionally managed portfolio solution – with far less capital and risk than investing directly in individual mortgage investments,” says Baker. “Each fund is designed to generate monthly dividends while preserving capital and providing a consistent long-term yield.”
CMI’s suite of funds caters to different risk profiles, offering options tailored to specific investor needs, goals, and risk tolerance. Each fund is meticulously managed to ensure geographic and borrower diversity, enhancing portfolio stability. Investors benefit from steady income through monthly dividend payments, generated from interest and fees collected from mortgage borrowers.
Unlike many mortgage investment corporations (MICs) that are regionally focused, CMI lends in major urban centers with high liquidity, smaller urban centers, and even rural properties on a case-by-case basis. “Each MIC fund consists of a pool of mortgages that share similar characteristics with respect to risk, diversification, and yield expectations,” Baker explains. “A team of experienced mortgage and investment professionals oversees every aspect of the fund, from initial underwriting to ongoing management, ensuring high standards of quality and performance.”
This strategic approach to portfolio allocation and geographic diversification helps mitigate risk and preserve capital while meeting each fund’s yield targets. Additionally, CMI’s comprehensive, in-house mortgage administration provides ongoing quality control and professional management throughout the mortgage lifecycle, which ensures greater control and lower expenses. This translates to higher yields for investors in a space that already outperforms many other cash-flow-focused strategies over the past few decades.
CMI’s MIC funds are eligible for various registered accounts such as RRSP, RRIF, TFSA, and RESP, providing tax-advantaged growth opportunities. Investors also have the option of enrolling in a dividend reinvestment plan (DRIP), providing them the opportunity to increase their investment principal and compound their returns.
Ensuring accessibility for a wider range of investors
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CMI Financial Group (CMI) is a fully integrated alternative mortgage lending and investment company, offering end-to-end private mortgage services for mortgage brokers and investors through its four interrelated businesses: CMI Canadian Mortgages Inc., CMI Mortgage Investments, CMI MIC Funds, and CMI Mortgage Servicing. As an award-winning industry leader and one of Canada’s fastest-growing companies, CMI has funded nearly $3 billion in mortgages and manages nearly $1 billion in assets. CMI helps investors achieve competitive fixed-income returns by offering high-quality, real estate-backed mortgage investment solutions tailored to their investment objectives and risk tolerance.
With a track record of over nearly $3 million in funded mortgages and nearly two decades in the industry, CMI has emerged as one of Canada's leading private mortgage lending and investment firms. The company's commitment to transparency, integrity, and operational excellence has earned it accolades as one of Canada’s top growing companies, top private lenders, and premier mortgage employers.
“Our commitment to excellence, transparency, and customized solutions sets us apart,” says Baker. “We bridge the gap between traditional fixed-income investments and alternative strategies, helping investors build robust, diversified portfolios that are resilient in the face of market volatility.”
With CMI’s innovative investment programs, advisors can confidently discuss this strategy with their clients, knowing they are partnering with an industry leader dedicated to delivering high-quality, well-managed mortgage solutions. With its commitment to innovation and tailored solutions, CMI is setting new standards in how investors can achieve their financial goals while contributing to the growth and stability of Canada's real estate market.
As Baker puts it, “Private mortgage investments are not only about higher yields, strategic diversification, and steady income, but also about making a positive difference in people’s lives and communities. This dual benefit makes them a valuable addition to any investment portfolio.”
The CMI difference
For investors who don’t meet the capital requirements for whole-mortgage investing, CMI MIC Funds offer an accessible entry point into the private mortgage market. These funds provide a gateway for investors to tap into diversified residential mortgage portfolios with a minimum investment of just $5,000.
“Our MIC funds provide investors access to the mortgage investment market through a professionally managed portfolio solution – with far less capital and risk than investing directly in individual mortgage investments,” says Baker. “Each fund is designed to generate monthly dividends while preserving capital and providing a consistent long-term yield.”
Ensuring accessibility for a wider range of investors
CMI offers two innovative programs – CMI MIC Funds and CMI Mortgage Investments – designed to help investors achieve competitive fixed-income returns for their portfolios. These programs provide broad exposure to residential real estate markets across Canada, catering to investors with various risk appetites and financial goals.
The CMI Mortgage Investments program is tailored to high-net-worth (HNW) and ultra-high-net-worth (UHNW) investors seeking bespoke mortgage investment opportunities. This full-service program offers a seamless investment experience, handling everything from sourcing and underwriting to managing the mortgage throughout its term, ensuring that investors can focus on returns rather than administrative details.
“Our program curates whole-mortgage investment
Revolutionizing private mortgage investing
In the residential real estate market, private lending refers to short-term mortgage financing primarily for borrowers unable to qualify for traditional bank mortgages. These loans are typically provided by mortgage investment corporations and individual private lenders, which include individual and institutional investors, conglomerates, or high-net-worth groups.
Private lenders play a crucial in offering liquidity and financing options to the growing segment of borrowers who seek alternatives to those provided by major banks. This includes small business owners, gig economy workers, and individuals with less-than-perfect credit. Private lenders offer greater flexibility in the mortgage application process, often focusing on factors like equity, cash flow, and exit strategy, without the stringent stress tests required by traditional lenders.
The rise of private mortgage lending
As uncertainty continues to overshadow public markets and the broader economy, advisors and investors are increasingly seeking refuge and opportunities in the niche realm of alternative investments. This shift aligns with the strategies of global private asset and alternative fund managers, who are expanding their client base beyond the usual pension funds, endowments, and other institutional investors.
According to Preqin, alternative assets under management have more than tripled since 2015 and are expected to surpass $23 trillion by 2026. One of the biggest factors driving this growth is the increasing demand for diversification. Traditional portfolio construction methods relying solely on stocks and bonds no longer provide sufficient diversification during periods of volatility.
Today's investors face universal challenges: rising inflation requires higher returns to maintain purchasing power over time, while opportunities for alpha in traditional stocks and bonds have become scarcer. Last year’s bond market selloff has left investors searching for more reliable portfolio stabilizers, and the demand for steady income generation remains constant.
Investors are increasingly turning to alternative investments to achieve higher returns, reduce volatility, and diversify their portfolios. Among these alternatives, private credit, particularly private mortgages, has emerged as a popular choice for both high-net-worth individuals and institutions. According to Baker, private mortgage investments offer flexibility and the potential for higher yields compared to traditional fixed-income securities. With their ability to provide steady income and minimal correlation with public markets, private mortgages serve as a stabilizing force within investment portfolios.
Seeking shelter in alternatives
AS ONE of the few fully integrated private mortgage lending and investing firms in Canada, CMI Financial Group (CMI) stands out in a crowded landscape dominated by small regional players. Leveraging a national network of more than 12,000 broker partners who source mortgages from coast-to-coast, CMI’s mortgage investment programs help investors amplify returns while adding ballast to their investment portfolios.
“Private mortgage investments can provide higher yields compared to traditional fixed-income securities,” says Chris Baker, CMI Mortgage Investments’ vice president of investment sales. “A leading private mortgage portfolio like CMI’s can yield between six percent and 16 percent annually, depending on the risk profile. With such compelling risk-adjusted returns, private mortgages have become one of the fastest-growing segments of alternative investments.”
Published July 15, 2024
In 2023, OSFI proposed even stricter mortgage guidelines under B-20, including restricting the mortgage size borrowers are eligible for, limiting debt service coverage, and implementing interest rate affordability stress tests. The regulator launched a public consultation on the matter.
CMHC believes private and alternative lenders accounted for roughly 10% to 12% of the country’s mortgage market as of 2023 – and that share has been growing in recent years.
Separate data from Statistics Canada showed that the market for mortgage investment corporations (MICs) – a major source of private mortgage financing – grew more than threefold between 2007 and 2021.
Factors driving growth in private MORTGAGES
“Private mortgage investments are not only about higher yields, strategic diversification, and steady income, but also about making a positive difference in people's lives and communities. This dual benefit makes them a valuable addition to any investment portfolio”
Chris Baker,
CMI Financial Group
“Our program curates whole-mortgage investment opportunities, giving investors control over their portfolios while providing access to a diverse range of high-quality mortgages”
Chris Baker,
CMI Financial Group
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Best in Wealth
Subscribe
Companies
About us
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Contact us
External contributors
Copyright © 1996-2024 KM Business Information Canada Ltd.