Since they are available only to Accredited investors all the transparency you are looking for is right there in the PPM. Just sign up and prove Accreditation and the info is there in black and white.
For example hypothetically it might read like this:
Our portfolio currently includes over 3,700 loans of which 3.2% have ever hit the 120+ day delinquency stage. Once a borrower is 30 days late on their monthly payment or their maturity date, we consider that loan to be default, and our servicing team works closely with borrowers to bring them back to current. Delinquent loans may, but do not necessarily, produce a loss. Of four foreclosures and two short sales to date, only one resulted in a loss of principal.
I started this thread, and I have PPMs for six funds in front of me, though only two deal with real estate. (The two are from
http://www.alphaflow.com/ and
http://www.pmifunds.com/funds-2/real-estate-lending-fund/, and if you are aware of other funds that invest only in marketplace real estate debt, I'd appreciate it if you'd point me to them.) None of the PPMs (and neither of the PPMs for the real estate funds) include anywhere near this kind of detail.
As a general rule, all the PPMs I've read run more or less like this:
- A page or two summarizing why you're likely to make money with the fund.
- A few pages covering the administrative structure of the fund and its general policies, including free structures, constraints on withdrawals, etc.
- Many, many pages explaining all the things that could go wrong, how you could lose your entire investment, and, in general, how only a fool would consider this kind of investment.
PPMs do have useful information, but they don't contain anywhere near as much as their length and serious-looking print would lead you to expect. Furthermore, virtually all contain wording like this (from one of the PPMs I have):
THIS MEMORANDUM IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE LIMITED PARTNERSHIP AGREEMENT OF THE FUND AND THE SUBSCRIPTION AGREEMENT RELATING THERETO, COPIES OF WHICH WILL BE MADE AVAILABLE UPON REQUEST AND SHOULD BE REVIEWED PRIOR TO PURCHASING AN INTEREST. IN THE EVENT THAT THE DESCRIPTION IN OR TERMS OF THIS MEMORANDUM ARE INCONSISTENT WITH OR CONTRARY TO THE LIMITED PARTNERSHIP AGREEMENT OR THE SUBSCRIPTION AGREEMENT, THE LIMITED PARTNERSHIP AGREEMENT AND THE SUBSCRIPTION AGREEMENT SHALL CONTROL.
In other words, the fact that the PPM says something about the fund doesn't mean it's true. You have to check the partnership and subscription agreements, which are different long, serious-looking documents, the primary distinguishing feature being that they actually mean something.
The kind of information you seem to expect a PPM to contain is more likely to show up in a monthly investor newsletter that describes the current state of the fund's investments. In my experience, the most recent such newsletter is generally delivered prior to or at the same time as the PPM when you contact the fund and ask for information.