Targeting 13% IRR
How does $USH acheive 13% IRR (projected)?
The projected 13% net-IRR for $USH stems from the fact that $USH is collateralized by a portfolio of HEIs.
Manifest will buy freshly originated HEIs. Manifest projects, based on industry trends and guidance from its partners, that these newly originated HEIs will mature after 4.5 years on average. However not all HEIs will settle; some defaults are expected.
Manifest expects to be able to generate returns of 16.0-17.5% on a portfolio of HEIs after:
Origination costs
Losses from defaults.
Costs from operations and servicing the portfolio of HEIs
Cash drag from holding limited cash equivalents for working capital and liquidity (cash equivalent holdings expected to be ~ 5% of TVL)
Manifest governance may decide to apply additional fees. In the event of these fees, Manifest expects annual fees of approximately 2.0-3.0%.
The combination of these factors produces the projected 13.0-14.5% returns on assets managed by Manifest annually. See our PPM for more details.
Manifest portfolio after: - Origination costs - Losses from defaults - Costs from operations and servicing - Cash drag from cash equivalents used for working capital and liquidity (expected to be ~5% of TVL)
16.0-17.5%
Manifest governance fees
(2.0-3.0%)
Net Returns to $USH
13.0-14.5%
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