CMI Financial Group shows how private mortgage investments can stabilize portfolios and offer high yields
In an exclusive feature by Wealth Professional, CMI Financial Group highlights how mortgage investments can be a lucrative portfolio stabilizer and the importance of partnering with an industry leader.
As one of Canada’s few fully integrated private mortgage lending and investing firms, CMI Financial Group (CMI) stands out in a landscape dominated by small regional players.
Leveraging a national network of over 12,000 broker partners who source mortgages from coast to coast, CMI’s mortgage investment programs help investors amplify returns while adding stability to their investment portfolios.
“Private mortgage investments can provide higher yields compared to traditional fixed-income securities,” says Chris Baker, CMI Mortgage Investments’ vice president of investment sales.
“A leading private mortgage portfolio like CMI’s can yield between six percent and 16 percent annually, depending on the risk profile. With such compelling risk-adjusted returns, private mortgages have become one of the fastest-growing segments of alternative investments.”
As public market uncertainty continues, advisors and investors increasingly turn to alternative investments. This shift aligns with global strategies expanding beyond pension funds and institutional investors.
According to Preqin, alternative assets under management have more than tripled since 2015 and are expected to surpass $23tn by 2026. Rising inflation and the scarcity of alpha opportunities in traditional stocks and bonds drive investors to seek more reliable portfolio stabilizers.
Baker notes the growing preference for private credit, particularly private mortgages, among high-net-worth individuals and institutions.
He says, “Private mortgage investments offer flexibility and the potential for higher yields compared to traditional fixed-income securities. With their ability to provide steady income and minimal correlation with public markets, private mortgages serve as a stabilizing force within investment portfolios.”
In residential real estate, private lending refers to short-term mortgage financing for borrowers unable to qualify for traditional bank mortgages.
Private lenders, including mortgage investment corporations and individual private lenders, provide greater flexibility by focusing on factors like equity, cash flow, and exit strategy rather than stringent stress tests.
Baker highlights, “Private mortgage borrowers are usually financially stable and responsible but face hurdles in meeting increasingly strict conventional lending criteria. Private lenders like CMI fill this gap, offering a lifeline to underserved borrowers, helping them achieve homeownership or leverage their home equity for other financial needs and goals.”
Data from Canada Mortgage and Housing Corporation (CMHC) shows an increase in private lenders' share of new mortgages, reaching eight percent in the first quarter of 2023, up from 5.3 percent in 2021.
CMHC estimates that private and alternative lenders accounted for 10 percent to 12 percent of Canada’s mortgage market in 2023.
Baker adds, “For investors, funding these mortgages enables strategic portfolio diversification, while borrowers gain access to flexible financing solutions. This mutually beneficial relationship injects liquidity into Canada’s real estate market.”
CMI offers two innovative programs: CMI MIC Funds and CMI Mortgage Investments.
The CMI Mortgage Investments program, tailored to high-net-worth and ultra-high-net-worth investors, provides a seamless investment experience, managing everything from sourcing and underwriting to mortgage management.
Baker explains, “Our program curates whole-mortgage investment opportunities, giving investors control over their portfolios while providing access to a diverse range of high-quality mortgages. Each investor is paired with a dedicated Investment Account Manager who ensures a seamless and customized experience.”
For investors not meeting capital requirements for whole-mortgage investing, CMI MIC Funds offer an accessible entry point with a minimum investment of $5,000.
Baker says, “Our MIC funds provide investors access to the mortgage investment market through a professionally managed portfolio solution – with far less capital and risk than investing directly in individual mortgage investments.”
CMI’s innovative investment programs cater to different risk profiles, providing steady income through monthly dividend payments.
Baker states, “Private mortgage investments are not only about higher yields, strategic diversification, and steady income, but also about making a positive difference in people’s lives and communities. This dual benefit makes them a valuable addition to any investment portfolio.”
