Morrison Financial

Mortgage Income Funds

Year-End Report — Q4 2025
Period Ending December 31, 2025
$70M
Funds AUM
7.08%
Senior YTD Return
9.08%
Junior YTD Return
53.41%
Wtd Avg. LTV
Highlights

Year-End Executive Summary

2025 was a year of continued growth, consistent income, and an exciting new milestone for the Morrison Financial Mortgage Income Funds. Here is a snapshot of where we stand as we close the year.

Institutional Recognition

A major wealth management firm with approximately $7 billion in AUM approved our funds for its product shelf, giving over 160 portfolio managers and advisors access to our investment products.

Consistent Monthly Income

Both Funds delivered uninterrupted monthly distributions throughout all twelve months of 2025, with the Senior Fund currently distributing 6.75% (6.96% w DRIP) and the Junior Fund currently distributing 8.75% (9.11% w DRIP) annualized.

Strong Capital Preservation

Our portfolio's weighted average loan-to-value remained at a conservative 53.41%, well within our target thresholds.

Successful Loan Activity

Multiple loans were repaid on schedule throughout the year, including construction projects in Brantford, and a large land loan in Cambridge and across the GTHA.

New Institutional Unit Class

We launched Class I units to accommodate professional wealth and portfolio managers, positioning the Funds for broader distribution.

Leadership Continuity

Senior Vice President Matthew Solda along with other members of senior leadership team have taken on an expanded role in day-to-day operations. You will begin to hear from Matthew, and other members of the team in this report, and future reports.

$100,000 Invested at Inception

An investor who placed $100,000 in the Junior Fund at inception - November 2020 - with DRIP would now hold approximately $153,140 — a total return of over 53%.

Portal Integration & Improved Communication

We are in the final steps of a secure portal integration of investor data from SGGG, our fund administrator, with our CRM, meaning improved communications on fund reporting in real time via personalized emails in the future.

From the President / Management

Funds Update

David Morrison
David Morrison, B.A., J.D.
President
Alenna Emer
Alenna Emer, CPA, CA
Chief Financial Officer
Matthew Solda
Matthew Solda, B.Eng., MBA
Senior Vice President
Chawin Vajanopath
Chawin Vajanopath, B.Eng., MBA
Senior Director, Operations

As we close out 2025, I want to take a moment to reflect — not only on the quarter, but on where Morrison Financial stands after nearly four decades in this business.

When I founded this firm in 1987, the Canadian private lending landscape looked very different. Over the years, we have built Morrison Financial on a foundation of discipline, relationships, and a commitment to doing right by every investor and borrower we work with. That foundation has carried us through multiple market cycles, and it is stronger today than it has ever been.

A wealth management firm with ~$7 billion in assets approved our Mortgage Income Funds for its product shelf — the first of many such institutional partnerships.

This past year and quarter brought a milestone that speaks directly to that strength. A substantial wealth management firm — one managing approximately $7 billion in assets — completed a full critical review of our Mortgage Income Funds and approved them for its product shelf. Their 160-plus Portfolio Managers and Advisors now have access to our funds. To accommodate institutional requirements that come with this type of relationship, we introduced a new "Class I" (Institutional) unit class in our Offering Memorandum. We view this as the first of many such partnerships, and one that will benefit all investors through enhanced liquidity and a larger volume of business.

I also want to use this letter to draw your attention to something that I believe is equally significant for the long-term future of this firm.

As our firm scales to meet institutional demand, we are consciously expanding the capacity of our senior leadership team. In his role as Senior Vice President, Matthew Solda has taken on broader responsibilities across our day-to-day operations and investment origination. He brings a combination of institutional rigor and entrepreneurial drive that complements the experience and relationships we have built over 38 years. For those of you who have worked with Matthew — you already know the calibre of his judgment and his commitment to our investors.

The future of Morrison Financial is bright, and it is a future we have been building toward for a long time.

Building deep leadership capacity is a long-term, deliberate focus for me as we lay the foundation for the firm's next chapter. I remain fully engaged as President and CEO, and I am proud of the team we are assembling to ensure Morrison Financial endures for decades to come. You will begin to hear more from Matthew and other members of our senior management in future correspondence — starting below with his perspective on the market and portfolio. The continuity of our values, our underwriting discipline, and our commitment to you as investors will only strengthen as this team steps forward. The future of Morrison Financial is bright, and it is a future we have been building toward for a long time.

David Morrison, B.A., J.D.
President and CEO, Morrison Financial
From the Senior Vice President Matthew Solda

Market Outlook & Portfolio Review

Thank you, David. And thank you to our investors for your continued trust in Morrison Financial. As we have shared in recent communications, knowing who is managing your capital — and trusting their experience — is a meaningful part of any investment decision. It is with that in mind that we continue to introduce our leadership team more directly into these reports, so that you can develop a deeper familiarity with the people behind Morrison Financial and the values that guide how we manage your investment.

As David noted, this has been a quarter of meaningful progress — both in the growth of the Funds, the successful repayment of loan facilities, and in the institutional recognition that comes with both. I want to take a moment to speak to what we are seeing in the market and how it shapes our approach going forward.

The Canadian real estate market has faced some headwinds over the past year — slower transaction volumes, and more limited borrowing landscape in some segments. That said, these conditions have historically been where experienced private lenders like Morrison Financial find our footing. When traditional financing becomes harder to access, well-capitalized borrowers with strong projects still need capital, and they turn to lenders who understand their business. We continue to see steady demand for flexible, relationship-driven mortgage financing — particularly among builders and developers in the Greater Toronto and Hamilton Area and growing Southwestern Ontario communities where our portfolio is concentrated.

Our approach has always been to lend conservatively, and the loans we are reviewing and approving present no exception to this. Our portfolio's weighted average loan-to-value stands at 53.41%, meaning there is a significant cushion of borrower equity protecting our investors' capital across the portfolio of investments. Eighty-three percent of the portfolio is in first mortgage position, and in several cases our loans are further supported by outside capital partners lending alongside us creating layered financing structures that provide an additional degree of security and diversification beyond what a single-lender arrangement would typically offer. Seventy-five percent of loans by time to maturity are within twelve months of expected repayment, reflecting the short-duration, well-collateralized nature of our investments.

On the portfolio side, the quarter was active. Three loans were successfully repaid, and our Brantford townhome project — six units, now fully complete — is expected to be repaid shortly. Our featured investment this quarter, the construction of five beautifully crafted custom homes in Pickering by an award-winning builder, continues to progress on schedule at a 62% projected LTV in first mortgage position.

These are the types of investments we are proud to share with you: well-located, well-sponsored projects with clear paths to completion and repayment.

Looking ahead, we are focused on building on the momentum of 2025. The institutional shelf approval David described opens an exciting new chapter for the Funds. As more professional wealth managers gain access to our products, we expect the Funds to grow, which in turn benefits all investors through greater scale and liquidity. At the same time, we will not compromise our underwriting standards in favour of growth. The discipline that has defined Morrison Financial since 1987 remains firmly in place.

We continue to see a healthy pipeline of new lending opportunities and look forward to sharing more with you as they close.

Strengthening Our Investor Community

One of the things we are most committed to as we grow is ensuring that our investors feel genuinely connected to Morrison Financial — not just to the returns, but to the people and the strategy behind them. To that end, we are planning a series of investor-focused initiatives over the coming year, including webinars, in-person gatherings at our midtown Toronto office and other locations, and potentially opportunities to visit select project sites firsthand.

Our goal is to build the most informed and engaged investor community in Canadian private lending. If you would like more information on the loan portfolio or how we approach portfolio management, please reach out personally to myself at msolda@morrisonfinancial.com or on my personal mobile phone at (647) 223-0081. If you would like more information on the senior or junior funds, please reach out to Tarik Ansara at tarik@belcopc.com. Tarik is a registered dealing representative with Belco Private Capital*.

* Introductions to the Morrison's Funds are to be conducted exclusively by registered dealers. Morrison Financial has retained Belco Private Capital Inc. as its exempt market dealer. All new or additional investments must be conducted through a registered dealing representative of an exempt market dealer.

Matthew Solda, B.Eng., MBA
Senior Vice President
As of December 31, 2025

Funds Profile

Fund TypeAlternative fixed-income solution backed by real estate
InceptionNovember 2020 (Funds) / 1987 (Manager)
Assets Under Management$70M (Funds) / $270M (Manager)
No. of Participating Loans22
Avg. Loan Participation Size$3.30M
Weighted Average Loan Term17.15 months
Weighted Average Loan-to-Value53.41%

The LTV outlined is based on the Junior Fund's risk exposure. The Senior Fund's exposure is lower and dependent on equity available in the Junior Fund. The Funds invest in a portion of Morrison Financial's loan portfolio.

Funds AUM Growth

~54%
Avg. YoY Growth

Since launching in late 2020, the Funds have grown steadily to $70 million in assets under management — averaging approximately 54% year-over-year growth. This trajectory reflects consistent investor confidence and disciplined portfolio growth over five years.

$2M
Nov 2020
$14M
2021
$30M
2022
$47M
2023
$60M
2024
$70M
2025
Returns

Fund Performance

Senior Fund
6.75%
6.96% with 1-year DRIP
Junior Fund
8.75%
9.11% with 1-year DRIP

Current annualized monthly distribution rates.

DRIP: The Dividend Reinvestment Plan (DRIP) automatically reinvests your monthly distributions back into additional fund units instead of paying them out as cash. This means your investment compounds each month — you earn returns on your returns. Over time, this compounding effect can significantly increase your total investment value, as shown in the performance tables below.

Performance Summary (Class F - Annualized)

PeriodSeniorSenior (DRIP)JuniorJunior (DRIP)
YTD7.08%7.32%9.08%9.47%
6-Month6.79%7.01%8.79%9.15%
12-Month7.08%7.32%9.08%9.47%
24-Month7.42%7.67%9.42%9.83%
Since Inception6.96%8.34%8.28%10.29%
Total Return35.94%43.09%42.77%53.14%

Performance figures are net of fees. DRIP returns reflect compounding of reinvested distributions.

Investors enrolled in the Dividend Reinvestment Plan have seen meaningfully higher total returns across every time period. As shown in the table above, DRIP investors in the Junior Fund have earned a cumulative 53.14% since inception compared to 42.77% without reinvestment — a difference of over ten percentage points driven entirely by the compounding of monthly distributions. If you are not currently enrolled in DRIP and would like to learn more, please contact Tarik Ansara at tarik@belcopc.com. Enrolment can be completed at any time.

Growth of $100,000 Invested at Inception (with DRIP)

The table below illustrates what a $100,000 investment made at each Fund's inception would be worth today, assuming enrolment in the Dividend Reinvestment Plan (DRIP) and NAV at par. This demonstrates the power of consistent monthly compounding over time.

PeriodSenior Fund (Class F)Junior Fund (Class F)
Initial Investment (Nov 2020)$100,000$100,000
Value as of Dec 2025$143,093$153,140
Total Return43.09%53.14%

Compare the Funds to Industry Benchmark Returns

To help illustrate how the Funds' returns compare to other income-focused options available to Canadian investors, the table below provides approximate annualized benchmarks. Each product has a different risk profile and liquidity structure, so these are not direct comparisons — but they offer useful context.

ProductType
Morrison Senior Fund (Class F)7.08%
Morrison Junior Fund (Class F)9.08%
1-Year GIC (Major Bank Avg.)~2.45–3.0%
FTSE Canada Universe Bond Index~3.3%–3.5%
Canadian High-Yield Bond ETF~5.5–6.5%

Benchmark figures are approximate and sourced from publicly available data. They are provided for illustrative purposes only. Past performance is not indicative of future results.

As the current rate environment compresses traditional fixed-income yields, the spread between conventional benchmarks and the Morrison Mortgage Income Funds has materially widened. The Senior and Junior Funds currently capture a yield premium of approximately 400 to 600 basis points over major bank GICs and the FTSE Canada Universe Bond Index.

Benchmark figures are approximate, sourced from publicly available data as of February 2026, and provided for illustrative purposes only. The products referenced (GICs, bond indices, ETFs) possess materially different risk profiles, liquidity characteristics, collateralization, and regulatory structures than the Morrison Financial Mortgage Income Funds. They are not directly comparable. Past performance is not indicative of future results.

Distribution History

Monthly Distributions (Class F)

Senior Fund

YearJFMAMJJASONDTotal
20250.65%0.63%0.60%0.60%0.60%0.60%0.58%0.56%0.56%0.56%0.56%0.56%7.08%
20240.65%0.65%0.65%0.65%0.65%0.65%0.65%0.65%0.65%0.65%0.65%0.65%7.80%
20230.63%0.63%0.63%0.63%0.63%0.65%0.65%0.65%0.65%0.65%0.65%0.65%7.68%
20220.50%0.50%0.50%0.50%0.50%0.50%0.50%0.56%0.56%0.58%0.63%0.63%6.52%
20210.50%0.50%0.50%0.50%0.50%0.50%0.50%0.50%0.50%0.50%0.50%0.50%6.00%
20200.50%0.50%

Returns are closely associated with the bank prime rate of interest. Illustrated returns assume monthly distribution and NAV at par.

Junior Fund

YearJFMAMJJASONDTotal
20250.81%0.79%0.77%0.77%0.77%0.77%0.75%0.73%0.73%0.73%0.73%0.73%9.08%
20240.81%0.81%0.81%0.81%0.81%0.81%0.81%0.81%0.81%0.81%0.81%0.81%9.72%
20230.79%0.79%0.79%0.79%0.79%0.81%0.81%0.81%0.81%0.81%0.81%0.81%9.62%
20220.50%0.50%0.50%0.50%0.50%0.50%0.50%0.73%0.73%0.75%0.79%0.79%7.29%
20210.50%0.50%0.50%0.50%0.50%0.50%0.50%0.50%0.50%0.50%0.50%0.50%6.00%
20200.50%0.50%

Returns are closely associated with the bank prime rate of interest. Illustrated returns assume monthly distribution and NAV at par.

See what your investment could grow to.

Use our online investment calculator to model different scenarios — adjust your investment amounts, add investment, change your time horizon.

Try Calculator
As of December 31, 2025

Funds Investment Portfolio

The Funds prioritize investment in first mortgage position (83%). The core focus is on construction and development loans for single-family and multi-family residential assets across Ontario. Current average portfolio LTV is approximately 53.41%.

83% First Mortgage
Loan Priority
First: 83% Subordinated: 17%
38% Construction
Investment Type
Construction: 38% Land/Precon.: 33% Asset-based: 20% Built Inv.: 9%
61% GTHA
Geography
GTHA: 61% SW Ontario: 18% Other: 11% Ottawa: 10%
40% 51–65%
Max LTV
51–65%: 40% <50%: 35% 66–75%: 15% >75%: 10%
70% 6–12 mo.
Time to Maturity
6–12 mo.: 70% <6 mo.: 25% 12–18 mo.: 4% >18 mo.: 1%
Spotlight

Featured Investments

Below are two investments that illustrate the quality of projects within the Funds' portfolio and the disciplined approach we bring to every loan.

Five Detached Homes — Pickering, Ontario

Loan Balance
$6.86M
Mortgage Position
First
Projected Max LTV
62%
Loan Maturity
July 2026

Morrison Financial is financing the construction of five detached homes in a mature neighbourhood in Pickering. The borrower is an experienced custom home builder recently awarded the 2025 Custom Home Builder of the Year by the Durham Home Builders Association. Three homes have been beautifully completed to date, with the final two expected in the coming months. This project is a great example of what we look for: a first mortgage position, an experienced and accomplished borrower, and a desirable location with strong buyer demand.

Six Townhomes — Brantford, Ontario (Repayment Expected Q1 2026)

Loan Balance
$1.83M
Mortgage Position
First
Projected Max LTV
58%
Loan Maturity
Mar 2026

This loan financed the construction of six townhomes in Brantford, part of the growing Southwestern Ontario corridor that continues to attract families and first-time buyers. Construction is now fully complete and the homes are ready for occupancy. Repayment is expected shortly. This investment is a good illustration of how a typical Fund loan progresses from origination through construction, completion, and repayment — all within the originally projected timeline.

Foreword Looking

Looking Ahead to 2026

As we enter 2026, we see a positive environment ahead for Morrison Financial and for our investors.

The conditions that have supported private mortgage lending in Canada remain reasonably favourable. There continues to be demand for the type of flexible, relationship-driven capital that Morrison Financial provides, particularly among experienced builders and developers working on residential projects in established communities. We are well-positioned to continue serving this market, and new markets which require inventory loan financing for completed homes remaining to be sold.

From a portfolio perspective, our focus remains on the quality and consistency that our investors expect. Our pipeline of new lending opportunities is healthy, and we continue to see good deal flow. As always, we will remain selective — prioritizing first mortgage positions, experienced borrowers, and projects in strong locations with clear paths to completion.

The institutional shelf approval we announced this quarter is an exciting development. We expect to build on this with additional wealth management partnerships in 2026, which will bring new capital into the Funds and benefit existing investors through greater liquidity and operational scale. The launch of our Class I units positions us well for these conversations.

On the investor engagement side, we are committed to keeping you connected. Our upcoming portfolio overview webinar will be the first in what we envision as a regular series — webinars, in-person events at our Toronto office, and possibly even site visits to active projects if enough of a group is interested. We want every investor to feel informed, included, and confident in how their capital is being managed.

The values that have guided Morrison Financial since 1987 — discipline, integrity, and a genuine commitment to our investors — remain at the core of everything we do. We are excited about what lies ahead and look forward to continuing to earn your trust.

Get in Touch

Contact

Morrison Financial

Morrison Financial Mortgage Corporation
8 Sampson Mews, Suite 202
Toronto, Ontario M3C 0H5

Tel: 416.391.3535
Email: invest@morrisonfinancial.com
www.morrisonfinancial.com

Investment Inquiry

Tarik Ansara
Dealing Representative at Belco Private Capital
Tel: 416.391.3535 ext. 114
Cell: 647.535.1126
Email: tarik@belcopc.com

Morrison Financial has retained Belco Private Capital Inc. as its exempt market dealer. All new or additional investments must be conducted through a registered dealing representative of an exempt market dealer.

Know someone who would benefit from investing with Morrison Financial?

Our growth has been built on referrals from satisfied investors. If you know someone looking for stable, real estate-backed income — we'd welcome an introduction. Simply connect them with Tarik Ansara at tarik@belcopc.com or 647.535.1126.

For Our Investors

Resources & Tools

We believe informed investors are confident investors. Below are resources recently produced by the Morrison Financial team to help you understand your investment and share our story with others.

Investment Calculator

Model your investment growth with our online calculator. Choose your investment amount, select your fund, toggle DRIP on or off, and see projected returns over time.

Try Calculator

Recent Publications

The Power of DRIP: How Compounding Builds Wealth

A closer look at the Dividend Reinvestment Plan and how monthly compounding has delivered 53%+ returns for Junior Fund investors since inception.

Article | morrisonfinancial.com/blog

What is a TFSA? The Complete Guide to Maximizing Tax-Free Growth

A practical guide to how the Tax-Free Savings Account works, common pitfalls investors make, and how to use your TFSA as a wealth-building tool — including holding alternative investments like mortgage funds.

Article | morrisonfinancial.com/blog

The Power of Tax-Advantaged Growth

How investors can hold Morrison Financial's Mortgage Income Funds within registered accounts like TFSAs and RRSPs to earn real estate-backed income on a tax-advantaged basis — combining strong yields with smart tax planning.

Article | morrisonfinancial.com/blog