April 7, 2016, Los Angeles, California – The WFP Income Fund, managed by Wilshire Finance Partners, paid investors a 7.52% net annualized non-compounded return through the first quarter of 2016. The net annualized compounded return for the first quarter of 2016 was 7.56%. The net annualized compounded return for the fund since its inception on September 23, 2013 through March 31, 2016 was 8.65%.
The WFP Income Fund is a short term alternative fixed income 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.
At the end of the first quarter of 2016, the portfolio had a weighted average loan-to-value of approximately 58.84%, a weighted average maturity of approximately 24 months, and 0% non-performing assets. The fund had an average loan size of approximately $776,381, consisting of loans secured by residential, office, retail, light industrial and warehouse properties located predominantly in the State of California.
Through March 31, 2016 all loans in the fund were performing, however, management identified one loan it has classified as special mention. 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.
During the first quarter of 2016 the fund experienced approximately $9.29 million in loan repayments, with approximately $7,646,070 occurring in early March. Together with new investments entering the fund in March, those repayments created excess liquidity for the fund which created a cash drag (or under-deployment) as the additional cash was not redeployed into new loans during the month of March.
Throughout the first quarter of 2016 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 was not sensitive to changes in interest rates.
“Although as a lender repayments are a welcome and positive factor in a loan portfolio, the velocity and volume of repayments in March 2016 was uncommon and caused a drag on earnings because the fund was holding a large cash position throughout the month. The result was a 6.42% net annualized non-compounded return for March on a standalone basis. While we still continue to be presented a number of lending opportunities, holding with our philosophy of striving to protect our investors’ principal while generating strong risk-adjusted returns, we continue to maintain our lending discipline in an effort to place better quality loans in the fund’s portfolio,” said Don Pelgrim, CEO of Wilshire Finance Partners. “Based on the current origination volume we are experiencing, we believe the excess funds will be fully deployed over the coming weeks and will help keep the fund’s returns in line with our target of 7.5% to 8% on an annualized basis.”
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 on Wilshire Finance Partners or the WFP Income Fund please call (866) 575-5070.
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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, the TD Ameritrade platform for Alternative Investments as WFP INCOME FUND LLC NSA under CUSIP Number 93099B102, and the Millennium Trust Company platform (with access to the Charles Schwab platform) under the WFP Income Fund (no CUSIP is required). The fund is open to investors, wealth managers and individual investment advisors under the Fidelity, TD Ameritrade and Millennium platforms using standard subscription and transfer procedures. Access though Millennium also permits aggregated reporting across the Schwab platform.
Safe Harbor Statement
This communication and the webcast referenced herein are not offers to sell or the solicitation of offers to purchase the securities of either of the Funds or otherwise. The purpose of this communication and the webcast 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 and the webcast contain 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
Don Pelgrim | Owner and Chief Executive Officer
TOLL FREE: (866) 575-5070 | DIRECT: (310) 736-1370
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