Q: Hi, I have held AI and MKP for many years, with the private credit problem surfacing, do you see any risk in these mortgage lenders? Or are they considered not as risky?
Thank you.
Thank you.
5i Research Answer:
Being in the mortgage lending business, both companies are likely going to have a tough time generating much growth and there are headwinds in Canadian real estate currently. Being non-bank lenders, we would view these names as inherently higher risk. As a style preference, we aren't huge fans of these businesses and risks are elevated in the current environment but at the same time we wouldn't be particularly concerned. The real estate doldrums have ben going on for a bit of time now and the management teams appear to have been navigating them well overall.