From Mediocre Portfolios to 18% Returns: EFM’s Radical Transparency in Private Markets

For three decades, Surendra Pather sat on the other side of the desk. As a veteran financial planner and one of Australia’s first CFPs, he spent years prescribing the standard suite of retail investment products to high-net-worth clients. But by 2020, the “doctor” was frustrated with his own prescriptions.

“The outcomes were quite mediocre,” Pather says. “Most products did not perform as expected. I wanted to do something better.”

That “something better” is Emerging Funds Management (EFM), a boutique firm carving out a high-yield niche in the gap between tight-fisted traditional banks and “predatory” private lenders. By targeting the underserviced small-to-mid-tier developer market, Pather is delivering structured equity and mezzanine finance solutions that target returns of 15% and upwards.

The current credit squeeze has left even high-quality developers stranded. According to Pather, the disconnect isn’t just about liquidity; it’s about valuation.

“Many good developers were disappointed with the values lenders saw versus what they saw,” Pather explains. “It caused a massive gap in how much they could borrow to complete a development.”

While institutional capital often chases “mega-projects,” Pather identified a vacuum in the $2 million to $5 million capital raising space. EFM fills this by utilising a Managed Investment Scheme (MIS) structure, often paired with a Singaporean digital exchange partner to provide seamless settlement and construction funding.

“There are not many fund managers providing solutions for smaller developers because the cost of producing an MIS is often prohibitive. We’ve made it work for raises as small as $2 million.”

In a private market often criticised for “cowboy” governance, Pather is leaning on his PWC and Sumo Group pedigree to institutionalise the process. EFM’s model relies on “best of breed” third-party independence—using top-tier legal counsel like Baker McKenzie and independent trustees—rather than keeping everything in-house.

This rigour recently earned EFM a finalist spot for a major property fund management award. For Pather, transparency isn’t just a compliance box; it’s downside protection.

Pather points to a recent project as proof of the model’s resilience. A seasoned developer held a $5 million site but was hampered by cash flow issues across other projects. Traditional lenders would only lend against the original $3.5 million purchase price, leaving a critical shortfall for DA and CC approvals.

EFM stepped in, structuring a gap-fill MIS. The result? The developer secured an additional 18 units in the approval process.

“The profitability went up significantly,” Pather notes. “For the MIS investors, it was an unexpected boom. They received an 18% return with a much larger equity buffer than originally anticipated. It was a win-win.”

While property remains the bedrock, EFM is diversifying into the “innovation bull market.” The firm has already launched a Whiskey Feeder Fund in Singapore and is preparing to debut a Digital Assets Fund of Funds.

“We are here to look after investors first and foremost,” Pather says. “Whether it’s property, AI, or alternative assets, the goal is balancing the highest return for the appropriate risk.”

As traditional lenders continue to retreat, Pather’s “investor-first” boutique model suggests that for those willing to look past the Big Four, the era of “mediocre” returns might finally be over.