Zagga receives Very Strong rating by Foresight Analytics
The Zagga CRED Fund has been assigned a VERY STRONG rating indicating a very strong level of confidence that Zagga can deliver a risk-adjusted return
in line with its investment objectives. Foresight Analytics & Ratings designation as a COMPLEX product indicates that the
underlying assets require specialist investment skills to acquire, manage and monitor.
January 2025
Foresight Analytics has assigned a ‘VERY STRONG’ Rating for Zagga CRED Fund (ZCF) indicating a very strong level of confidence that the manager can deliver a risk-adjusted return in line with its investment objectives.
Additionally, Foresight Analytics & Ratings designation as a COMPLEX product indicates that the underlying assets require specialist investment skills to acquire, manage and monitor.
The Zagga CRED Fund (ZCF) is a pooled managed investment scheme established in January 2024 managed by Zagga Investments Pty Ltd (‘the Manager’).
"The Manager is well-placed from a resources perspective to achieve its growth ambitions. It is also very well placed from a system, processes, structural perspective to do so – Zagga is an institutional grade manager. Zagga’s growth strategy is, just like its lending, inherently conservative – just the way Foresight likes it in private debt."
Summary of the review
The Zagga CRED Fund (‘the Fund’ or ‘ZCF’) is a pooled mortgage trust established in January 2024 managed by Zagga Investments Pty Ltd (‘the Manager’). The underlying investments are loans secured by registered first mortgages on property development, land development and refinancing of completed stock. The Fund is effectively a floating interest rate investment strategy.
The Fund sits at the more conservative end of the spectrum in the mortgage trust segment. It is senior loan only mandate with a maximum LVR by loan of 65%. On the property development side, the Manager’s preferred loan profile is for more upmarket residential developments in the middle ring area of cities on the Australian eastern seaboard and, without exception, to highly experienced, reputable, and financially strong developers, the bulk of which are repeat borrowers in which long-term relationships exist.
While Zagga was founded in 2017, the key members of the investment team are highly experienced, having been in this sector since before the GFC (Global Financial Crisis). Zagga now has 3 funds operating in the non-bank Australian CRE debt (ACRED) space and has grown total FUM to over $900M, raised from a loyal and growing (by word-of-mouth largely) investor base materially comprising HNWs, family offices, and ‘junior’ institutional investors.
We note that since its inception in 2017, the Manager has never recorded a loss-given-default impacting unitholder. This is a high quality, institutional grade investment manager.
While the Fund is relatively new and with a current total FUM of circa $13.8M, portfolio diversification has been achieved by way of making ‘fractionalised’ loans into larger credit risk parameter appropriate loans originated by the Zagga group. The latter typically in the $2-$50M range. This interaction with other Zagga funds is also but one of what is a liquidity waterfall to assist in ensuring liquidity (invariably a focus point for any new, low FUM fund).
How to invest?
For advisers
- Find ZCF on the following platforms
• BT Panorama | • HUB24 | • Netwealth | • Praemium
For investors
- Speak to your financial adviser or broker
Investment philosophy
While Zagga does operate across the property lending capital stack (senior, mezzanine, equity warrants), the latter two are only provided on almost a bespoke basis. Otherwise, Zagga's investment strategy is overwhelmingly conservative, specifically senior-only. And, in relation to borrowers, we are effectively talking about prime or bank grade borrowers.
Maximum LVRs of 65%, short-duration bridging loans (aka, limited economic cycle risk) and, very importantly, to high quality borrowers from a comprehensive credit risk perspective.
Investors can take reassurance from Zagga satisfying various due diligence assessments and ongoing monitoring from experienced independent 3rd-parties.
"Foresight Analytics note that since its inception in 2017, Zagga has never recorded a loss-given-default impacting unitholder. This is a high quality, institutional grade investment manager."
Download the full Foresight Analytics Investment rating Report
The Zagga CRED Fund – offering another CREDible alternative for advisors
The Zagga CRED Fund (ZCF) is a wholesale fund that aims to provide investors with an attractive rate of return and
regular, risk-adjusted income by investing in a specifically curated portfolio of credit-vetted, mortgage-secured loans.