June 9, 2016, Los Angeles, California – The WFP Income Fund, managed by Wilshire Finance Partners, paid investors a 7.41% net annualized non-compounded return through May 31, 2016. The net annualized compounded return through May 31, 2016 was 7.50%. The net annualized compounded return for the fund since its inception on September 23, 2013 through May 31, 2016 was 8.65%.
The WFP Income Fund is a short term fixed income alternative investment that seeks to protect the investor’s principal while also providing attractive risk-adjusted returns primarily through investments in loans secured by first trust deeds and mortgages within the United States.
The return obtained by the fund was on an unlevered basis and was primarily the result of interest income received on the first trust deeds and mortgages in the fund’s portfolio.
As of May 31, 2016, the portfolio had a weighted average loan-to-value of approximately 59.70% and a weighted average maturity of approximately 24 months. The fund had an average loan size of approximately $840,261, consisting of loans secured by residential, office, retail, light industrial, warehouse and senior assisted living properties located predominantly in the State of California.
Through May 31, 2016 management identified one loan it has classified as special mention and one loan it has classified as substandard. A special mention loan has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the fund’s credit position at some future date. Special mention loans are not adversely classified and do not expose the fund sufficient risk to warrant adverse classification. A substandard loan is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans that are also classified as substandard must have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the lender will sustain some loss if the deficiencies are not corrected.
As of May 31, 2016, the principal balance of the substandard loan represented less than 3.25% of the assets under management in the fund. The loan was considered substandard as the borrower was 60 days delinquent as of May 31, 2016. Based on the current value of the underlying collateral, the Manager believes that there is no collateral impairment impacting the loan. Collateral impairment occurs when the amount currently owed under a loan exceeds the value of the collateral pledged for the repayment of the loan. Although it is not obligated to do so, Wilshire Finance Partners, as the Manager of the fund, repurchased the loan from the fund as an additional protective measure in the event additional collection action is necessary.
Since its inception, the net asset value (NAV) of the WFP Income Fund remained stable and demonstrated no correlation to the stock markets or bond markets. Further, the NAV has not been sensitive to changes in interest rates.
“Although the property secured by the loan classified as substandard is in the process of being sold, the borrower was 60 days delinquent in their payments as of May 31, 2016,” said Don Pelgrim, CEO of Wilshire Finance Partners. “Therefore, while we believe the value of the collateral securing the loan exceeds the amount currently owed under the loan, the substandard classification is warranted at this point in time due to the borrower’s failure to make timely payments under their loan. As a result, and although we are under no obligation to do so, as the Manager of the fund Wilshire has elected to repurchase the loan from the fund as an additional protective measure in the event additional action is necessary to ensure repayment of the loan.”
The WFP Income Fund has been approved for both retirement and non-retirement accounts on the following alternative investment platforms:
- Fidelity Investments (National Financial Services or NFS); CUSIP Number 94699K534
- TD Ameritrade as WFP INCOME FUND LLC NSA; CUSIP Number 93099B102
- Millennium Trust Company (with affiliate access to the Charles Schwab platform)
For more information about Wilshire Finance Partners or the WFP Income Fund please call:
About Wilshire Finance Partners and the WFP Income Fund
Wilshire Finance Partners, Inc. (Wilshire) specializes in real estate finance and investments and is the manager of the WFP Income Fund, LLC (Income Fund) and the WFP Opportunity Fund, LLC (Opportunity Fund and collectively with the Income Fund, the Funds). The Income Fund invests in a diversified pool of residential, multifamily, and commercial real estate related short-term bridge loans secured by first trust deeds and mortgages. The Opportunity Fund invests in a diversified pool of residential, multifamily, and commercial real estate related short-term bridge loans, participating loans, real estate joint ventures, and direct real estate investments. Wilshire commenced operations in January 2008 and launched the Income Fund and Opportunity Fund in September 2013. Each of the Funds is managed by Wilshire, which maintains two sales and operations offices in California.
The WFP Income Fund has been approved for both retirement and non-retirement accounts on the Fidelity Investments platform for Alternative Investments (National Financial Services or NFS) under CUSIP Number 94699K534, and the TD Ameritrade platform for Alternative Investments as WFP INCOME FUND LLC NSA under CUSIP Number 93099B102. The fund is open to investors, wealth managers and individual investment advisors under both the Fidelity and TD Ameritrade platforms using standard subscription and transfer procedures.
Safe Harbor Statement
This communication is not an offer to sell or the solicitation of offers to purchase the securities of either of the Funds or otherwise. The purpose of this communication is to provide an overview of the respective Funds and its private placement. Persons interested in learning about either of the Funds and their private placement will be provided with the respective Fund’s Private Placement Memorandum, dated September 2013 (inclusive of exhibits thereto and any supplements, the Memorandum), which provides a description of the respective Fund, the terms of its private placement, a discussion of risk factors, a copy of such Fund’s limited liability company operating agreement, a subscription agreement and other information related to the respective Funds.
This communication contains certain forward-looking statements regarding each of the Funds’ investment objectives and strategies. The forward-looking statements are based on current expectations that involve numerous risks and uncertainties which are difficult or impossible to predict accurately and many of which are beyond the control of Wilshire, as the manager of the Funds. Although Wilshire believes that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance that the forward-looking statements will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements, the inclusion of such information should not be regarded as a representation by Wilshire, any placement agent, or any other person, that the objectives and strategies of the respective Funds will be achieved.
An investment in either of the Funds may be made solely by accredited investors (which for natural persons, are investors who meet certain minimum annual income or net worth threshold), who are provided with the Memorandum and who complete, execute and deliver the subscription documents included therein. Each of the Funds securities are being offered in reliance on an exemption from the registration requirements of the Securities Act of 1933, as amended (the Securities Act) and are not required to comply with specific disclosure requirements that apply to registration under the Securities Act. The Securities Exchange Commission has not passed upon the merits of or given its approval to the securities, the terms of the offering, or the accuracy or completeness of any offering materials. The securities are subject to legal restrictions on transfer and resale and investors should not assume they will be able to resell the securities. Past performance is not indicative of future results. Investing in the Funds involves substantial risk, including loss of investment, and is not suitable for all investors.
Wilshire Finance Partners, Inc.
Donald H. Pelgrim, Jr.