Questions High-Net-Worth Investors Should Ask Before Investing in a MIC

Navigating the Alternative Investment Landscape in Canada

High-net-worth investors are busy. Product decks are optimized for that reality: clean charts, familiar real estate language, and a distribution figure placed where the eye lands first. Good questions slow the room down. They force specificity about mandate, incentives, credit outcomes, and exit mechanics.

You do not need a confrontational style. You need a written list and a willingness to leave unanswered items unanswered only temporarily. If answers never arrive in usable form, that is an answer. Begin with category clarity on What is a MIC if anyone at the table is still mixing MICs with GICs or REITs.

Critical Questions Regarding Fund Management and Strategy

What does this MIC refuse to do? What is the target mix of residential, commercial, construction, and land? What is the maximum LTV policy, and how often are exceptions approved? What share of the book is first mortgage versus subordinate? How large is the largest loan relative to the portfolio? Where is geographic concentration highest?

Ask for arrears, defaults, realized losses, and enforcement timelines across a full cycle, not only the calm years. Request a recent declined loan and the reason. Request a recent impaired loan and the week-by-week response. Storytelling ability is not the test. Specificity is the test. A structured version of this work lives in Peter's Due Diligence Framework and on the due diligence process page.

Understanding Liquidity and Risk Mitigation

How are managers paid, and when can fees be deferred, waived, or prioritized? Do principals have meaningful capital alongside investors? What related brokerages, servicing entities, or development groups sit near the loan book? How are appraisers chosen and challenged? What would make the dealer or advisor remove this product from the shelf?

If the person recommending the MIC cannot explain conflicts without defensiveness, pay attention. Independence is observable behaviour, not a slogan on a website. For the channel question, read The Independent Filter and Diversifi.

Liquidity and personal suitability questions

When and how can I redeem? What notice, caps, fees, and gates apply? Has the MIC ever delayed redemptions? What cash and maturity plan funds exits? If my circumstances change in twelve months, what are my realistic options?

Then turn the lens inward. What job is this capital supposed to do? What allocation size still leaves ample reserves outside the MIC? Are registered-account mechanics confirmed for this specific product? Would a spouse or business partner understand the illiquidity the same way you do? Are you chasing yield because public markets feel disappointing, or because this sleeve has a defined role?

These personal questions belong before subscription, not after. Use Who This Is For and How to Compare Canadian MICs to keep the conversation structured.

Questions investors ask about the checklist itself