Overview
The KHK Secured Credit Fund has been set up to provide investors with a secure and stable return. The Fund will invest solely by purchasing KHK Loan Notes, issued by KHK Capital Ltd. These Loan Notes provide a rate of 9% p.a. gross, with no tax deducted at source. The Fund will issue accumulation shares, where the income received will not be distributed, and distribution shares that will pay 0.75% (less administrative fees) per month.
KHK Capital Ltd uses the proceeds of the Loan Note sales to grow its private credit business. As of July 2025 it has 181 live loans, with an average loan-to-value of 64.8%, loans totalling £120m and average loan size of £790k with an average duration of only 15 months before full repayment is due.
What makes this investment different from similar private credit type products is that the return to investors is not dependent upon the performance of KHK's loan book. KHK have committed to paying out, through their loan notes, a fixed coupon of 9% p.a., for the benefit of those providers of capital.
KHK's profitability is therefore dependent upon their ability to make returns in excess of this figure. KHK have always remained profitable, and over the last 6 months their profit before tax has been on average 0.28% per month.
KHK are obliged to return loan monies to Loan Note investors at 100%, with 3-months notice. With significant retained profitability, KHK shareholder debentures, and other factors, KHK ensure that they are always in a position to honour those obligations.
Performance
KHK Capital Ltd has been in existence since 2019. They have offered Loan Notes since 2020. During 2020, the loan notes provided a fixed return of 8% p.a. Ever since, they have provided a fixed return of 9%. This return has been during times of unusually low interest rate environments.
0.75%
Monthly Performance
9.0%
Last 12 Months
57%
Since June 2020
Total Return Chart
How can KHK Capital Ltd continue to pay such high returns during periods of low interest rates? In the UK, mortgages, and the provision of other regulated loans to public homeowners secured on their principal private residence, are highly correlated to movements in the UK base rate.
However, private developers, and property-market professionals are not served in the same way. Banks often do not provide such short-term loans for bridging and development purposes, regardless of the level of collateral. Therefore, private developers consistently over the years have been required to pay between 12% and 15% for the provision of credit, whilst still having enough margin for their individual developments / opportunities to be profitable.
KHK Loan Portfolio as at 30 June 2025
KHK Capital Ltd has been in existence since 2019. They have offered Loan Notes since 2020. During 2020, the loan notes provided a fixed return of 8% p.a. Ever since, they have provided a fixed return of 9%. This return has been during times of unusually low interest rate environments.
£120m
Total loan portfolio
as at Jun 2025
9.0%
Average loan to value
All loans backed by first legal charge
Loan Types Distribution
Every loan is backed by a first charge on the property on which the loan is extended. KHK lends in the unregulated market, which is business-to-business. This means that the process to recover assets in the event of a non-performing loan is significantly easier and quicker than if the loan were a mortgage made to an individual homeowner.
Benefits and Risks
KHK Capital Ltd has been in existence since 2019. They have offered Loan Notes since 2020. During 2020, the loan notes provided a fixed return of 8% p.a. Ever since, they have provided a fixed return of 9%. This return has been during times of unusually low interest rate environments.
Benefits
- High return available to all investors
- High return has been consistently delivered since January 2020
- The return is guaranteed by the assets of the company
- Every loan is backed by a first charge on the property
- KHK lends in the unregulated market (business-to-business)
- KHK Capital Ltd have yet to suffer a loss due to failure of loan repayment
- £65m revolving credit facility provided by 2 UK banks
- Banks perform monthly checks and employ third-party credit risk consultancy
Risks
- 3-month redemption settlement period required
- Redemptions may be limited to 20% per calendar quarter
- 9% return cannot be guaranteed indefinitely
- Directors may close issuing of new Loan Notes
- Investors responsible for their own tax treatment
- Unforeseen events may affect investment value
Key Facts
Name
KHK Capital Secured Fund Cell
Investment Manager
Silk Invest Ltd
Inception Date
1st August 2025
Fund Domicile
Guernsey
Currency
GBP
Initial Launch NAV
£100
Minimum Investment
£100,000
Subscriptions
Monthly
Redemptions
Monthly, with 3-month notice period
Legal (Guernsey)
Walkers
Administrator
Orbitus
Auditor
Grant Thornton
Management Fees and Charges
The Fund will bear the costs of the Fund's administration, Custody, and Audit. This is expected to be 0.25% at the time of launch. In addition, the Investment Management Fee of 0.25%, can be borne by the Fund. However, at its discretion, KHK may subsidise this charge, by increasing the interest rate available to the Loan Notes that the Fund will own, in order to keep the return of the Fund between the intended range of 8.65% p.a. to 8.85% p.a.