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Raleigh, NC, United States, 2008/11/01 - Madison Commercial Finance (MCF) is the alternative investment division of Madison Financial Corp. (MFC) which offers investors the entry into a few select alternative investment opportunities.
Madison Commercial Finance has recently negotiated a private placement deal with provider based out of Plainfield, NJ, that allows it to offer the Serafino Private Equity Fund to its clients and other potential investors.
Madison Commercial Finance (MCF) is the alternative investment division of Madison Financial Corp. (MFC) which offers investors the entry into a few select alternative investment opportunities. These opportunities are of an institutional grade and are only able to be offered to individual investors through Madison Commercial Finance's private placement and direct relationship to our providers. Our alternative investment opportunities also seek to provide Diversification to investor portfolios as well as Alpha through their non-correlation to the equity markets.
The private placement offering provides for short term liquidity, diversification, and a contractually secured principle of 99% with returns ranging from 20%-35% annually. This gives MCF an incredible competitive advantage in terms of the returns it is able to secure for its clients and investors at very low risk ratios. This opportunity is also equipped to handle both taxable and tax deferred investment contributions.
The Serafino Private Equity Fund strategically invests in high quality commercial bridge loans ranging from $10-$100 million. High quality is defined as A+ paper, high credit scores, and a strong equity position. We lend on a 65% LTV ratio and carry a first position lien on the commercial property as well as the primary residences of all officers of the corporation.
There are 5 separate traunches that are in place with 5 contracts that occur per year each ranging 60-80 days on average. The importance of this is that any investment capital that we accept is divided evenly over the 5 traunches so as to diversify and reduce risk. At your level of investment contribution, you would be given a rate of 6% per contract which equates to an annualized return of 33.8%. This is done through a structured note for each contract where your rate is guaranteed by the contract and by the assets held for the duration of the bridge loan.
The risk of investment is also quantified at 1% per contract which when diversified over the 5 traunches, is reduced to .2% total portfolio risk. The 1% is the risk of loss should a contract default and is used to pay the expenses of seizing the property and taking it to market in order to recoup the rest of the funds. This process takes anywhere from 2-5 months to complete. In 8 years and 125 contracts, there has 1 default to date. The default was a result of a divorce and not necessarily a fault in the analysis process.In this scenario, the investors were returned 100% of the principle investment within 3 months. The other risk to consider is liquidity risk. During each contract, funds are unavailable and therefore illiquid. Investors have the option at the end of each contract whether to roll the investment over into the next contract, strip the interest, or cash out completely.
Madison Commercial Finance is a division Madison Financial Corp. and offers several alternative investment programs that are uncorrelated to the equity markets.
Interested parties should contact William M. Geist, CEO of Madison Financial Corp.