WFP Opportunity Fund Announces a 9.45% Net Annualized Return through 3rd Quarter 2015
October 2, 2015, Los Angeles, California – The WFP Opportunity Fund, managed by Wilshire Finance Partners, paid investors a 9.45% net annualized non-compounded return through the 3rd quarter of 2015. Further, the fund delivered a 9.74% net annualized non-compounded year-to-date return through the same period. On a stand-alone basis, the fund generated a 4.95% net non-compounded annualized return in the 3rd quarter.
The WFP Opportunity Fund seeks to provide attractive risk-adjusted returns to its investors through debt and equity investments in real estate within the United States. Such investments will include, without limitation, direct and indirect equity investments, joint ventures, deeds of trust and mortgages, participating loans and other real estate related investments.
At quarter end, the fund’s portfolio consisted of participating loans under joint venture arrangements where the fund provided higher leverage in exchange for preferred interest and a percentage of the profits resulting from the real estate investments. In addition, the portfolio contained B Notes and second trust deeds with combined loan-to-values below 80%. All of the fund’s portfolio investments involved property inside the State of California.
“While the WFP Opportunity Fund remains non-correlated to the stock and bond markets, the returns of the fund were negatively impacted by two primary challenges in the 3rd quarter of 2015,” said Don Pelgrim, CEO of Wilshire Finance Partners. “First, as the housing market continues to firm we saw fewer participating loan transactions meeting the ‘spread’ or return requirements of the fund. As a result, the fund did not make any new participating loan investments during the quarter and the capital in the fund was under-deployed. Second, there were existing participating loan investments secured by single family homes which were not completed and sold during the summer, which is historically the prime selling season for residential real estate. As a result, there were no realization events during the quarter on those investments and, absent additional price increases, the anticipated return on those investments may be impacted due to the additional holding costs associated with delayed sales. The combination of those factors acted as a drag on the fund’s returns during the quarter and impacted year-to-date returns in the fund.”
Mr. Pelgrim added, “To address the issue of under-deployment on a move forward basis, the members of the fund approved changes to the fund’s operating agreement to allow greater flexibility in the sourcing of investments through the manager and its affiliates. Further, the fund will periodically invest on a short term basis in bridge loans to generate a return on what may otherwise be idle capital.“
For more information on Wilshire Finance Partners or the WFP Opportunity Fund please call (866) 575-5070 or visit www.WilshireFP.com.
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About Wilshire Finance Partners and the WFP Opportunity 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.
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 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
Don Pelgrim | Owner and Chief Executive Officer
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