Investor knowledge
September 28 2026
Growing Without Compromise: The Evolution of the TD Greystone Mortgage Strategy
10 minutes
Since its inception, the TD Greystone Mortgage Strategy (the "Strategy") has experienced a remarkable journey of growth and transformation. From modest beginnings of $300 million in assets under management (AUM) in 2007 to a portfolio of over $10 billion as at August 31, 2026, the Strategy stands as a testament to the power of a well-defined investment philosophy, adaptive strategy, and disciplined execution. As the portfolio expanded, a robust and selective process helped ensure the preservation of quality and downside protection, suggesting that scaling up enhanced flexibility and opportunity. This document explores, with a detailed lens, the ways in which the Strategy has successfully achieved growth over nearly two decades - all while carefully preserving its foundational identity and investment principles.
A Strategy Defined Early
From the beginning, the Strategy was built around a clear and disciplined principle: stable, contractual income is the most reliable foundation for long‑term performance. The objective was never to chase higher yields or market momentum; instead, the focus was on lending against high‑quality real estate to borrowers with the ability to service debt through full market cycles. Income durability has always been and will always be the anchor.
When the Strategy was launched in 2007, this investment philosophy was reinforced by necessity. With only $300 million in AUM, portfolio construction demanded precision. A single mortgage exceeding $30 million could represent more than 10% of the portfolio, concentrating risk and limiting flexibility. Underwriting was therefore conservative, deal selection was critical, and risk tolerance was clearly defined. These early constraints established the founding principles that continue to govern the Strategy today.
Growth Expanded Possibility, Not Philosophy
As the Strategy grew, its opportunity set expanded alongside it. Scale reduced concentration risk, improved diversification, and allowed for more flexible position sizing. Importantly, growth did not require a change in approach. Growth was not achieved by relaxing underwriting standards or stretching for yield; it was absorbed through breadth.
With increased assets under management, the Strategy gained the ability to participate across a wider range of loan sizes and structures while maintaining its focus on income quality and downside protection. Scale became a tool for better portfolio construction, not a reason to compromise it.
The Strategy’s growth also occurred alongside a meaningful expansion in the broader Canadian commercial mortgage market. By 2025, outstanding commercial mortgage debt had reached approximately $530 billion, while annual originations rose to roughly $117 billion1—providing a deeper and more active opportunity set from which the Strategy could continue to scale selectively, without changing its investment philosophy.
1 Nesto 2025 Canadian Commercial Real Estate Debt Survey.
Capacity Supported by Market Depth and Selectivity
Scale allowed the Strategy to be a meaningful participant in this market, while remaining highly selective. Over the course of the year, more than $20 billion of opportunities were reviewed, yet only $3.3 billion of capital was ultimately deployed.
This gap is intentional. It reflects a process where size enhances discretion rather than creating pressure to deploy capital. With greater choice comes the ability to be patient, to size investments appropriately, and to say no when risk‑return dynamics are not compelling. As the platform has scaled, underwriting standards have risen, not fallen.
Scale Strengthened Structure and Relationships
As the Strategy matured, scale also translated into influence. Long‑standing relationships with borrowers, brokers, and institutional sponsors deepened, improving access to high‑quality transactions and strengthening negotiating leverage. The relationship with one of our top borrowers illustrates this evolution: from no exposure at the Strategy’s inception in 2007, the platform that we build with them has grown to a meaningful scale today, secured through tailored loan structures and best‑in‑class credit enhancements. Over time, this resulted in better structures and stronger investor protections.
This evolution is also clearly illustrated by the Strategy’s long‑term involvement in Bay Adelaide Centre, which is a one million square foot, 45-storey, AAA office and retail tower located in the heart of Toronto's financial district. This LEED Platinum certified property has direct connection to PATH systems with access to amenities and transportation.
The Strategy’s investment in Bay Adelaide Centre demonstrates how scale has reduced, rather than increased, capacity risk. When the Strategy first participated in the financing in 2011, its $20 million position was appropriately sized for a much smaller portfolio and formed part of a broader lending syndicate. At that stage, larger exposure would have created concentration risk, limiting the Strategy’s ability to participate meaningfully in institutional-quality assets of this scale.
Today, with a substantially larger asset base, the same type of opportunity can be absorbed more efficiently and prudently. The Strategy’s $335 million first-mortgage financing of Bay Adelaide Centre in 2025 reflects greater balance sheet capacity, stronger sponsor relationships, and enhanced structuring influence — not a relaxation of underwriting discipline. Scale allowed the Strategy to move from syndicate participant to lead lender while maintaining appropriate portfolio diversification and risk controls.
Source: TD Asset Management Inc. As at June 30, 2026.
Portfolio Quality Improved as the Strategy Scaled
Growth also enabled a steady improvement in the quality of the Strategy’s borrower base and underlying collateral. By June 2026, the average loan size had increased to approximately $55 million, reflecting greater access to larger, institutional-quality properties and more established sponsors.
The increase in average loan size is not, on its own, a measure of quality; rather, it reflects the Strategy’s ability to finance assets that were previously difficult to accommodate without creating excessive concentration. That access has coincided with stronger portfolio fundamentals: as at June 30, 2026, more than 90% of the portfolio was invested in first mortgages, with an average loan-to-value ratio of 57.1% and debt service coverage of 1.6x.
The borrower mix has improved alongside this evolution. Institutional sponsors—including pension funds, insurers, investment managers, and REITs—now represent a greater share of the portfolio, bringing stronger balance sheets, longer investment horizons, and more durable cash flows. The Strategy’s scale has therefore supported access to larger and more complex transactions while preserving conservative structures, disciplined underwriting, and portfolio diversification.
Discipline Through Cycles
The durability of this approach has been tested across multiple market cycles, including the global pandemic. During periods of heightened uncertainty, the Strategy’s focus on high‑quality collateral, conservative leverage, strong sponsors, and contractual income allowed it to continue generating predictable income while preserving capital.
This resilience was not incidental. It was the result of a Strategy designed to perform through cycles - one where growth reinforces discipline rather than undermines it.
Bigger - and Better Because of It
Today, the TD Greystone Mortgage Strategy stands at over $10 billion in assets. While the platform is meaningfully larger, its defining characteristics remain unchanged. Scale has expanded opportunity, strengthened underwriting, improved diversification, and reinforced income durability - without sacrificing quality or returns.
The Strategy’s evolution is not a story of transformation, but of refinement. Growth has not required compromise. Instead, it has institutionalized the principles that defined the Strategy from the beginning and positioned it to continue delivering resilient, sustainable income through cycles.
Note: Returns are in C$. Includes cash. Net of expenses. 12-month rolling income returns. TDGMF = TD Greystone Mortgage Fund.
Source: TD Asset Management Inc., Nesto Corp., Bloomberg Finance L.P. As of June 30, 2026.
Performance as of August 31, 2026 (net of expenses)
| 3M | YTD | 1 YR | 3 YRS | 5 YRS | 10 YRS | Since inception1 | |
| Strategy | 0.86 | 3.16 | 4.59 | 6.73 | 5.01 | 4.83 | 5.34 |
| Benchmark2 | -0.13 | 1.35 | 2.83 | 5.42 | 2.05 | 2.43 | 4.01 |
| Difference | 0.99 | 1.81 | 1.76 | 1.31 | 2.96 | 2.39 | 1.33 |
| Income Return3 | 1.32 | 3.62 | 5.45 | 5.91 | 5.74 | 5.15 | 5.14 |
| Capital Return3 | -0.47 | -0.44 | -0.84 | 0.82 | -0.70 | -0.32 | 0.19 |
1 Inception Date: September 30, 2007
2 Benchmark: 60% FTSE Canada Short Term Bond Index; 40% FTSE Canada Mid Term Bond Index + a premium of 50 bps annually
3 Income and Capital returns may not add up to Total Return due to compounding of returns and the effects of rounding. Income represents the interest, fees, and cash distributions paid to the fund during the measurement period. Capital return represents the change in value of the securities as determined by the fund's third party valuator. Excludes cash.
Past Performance: Any performance information referenced represents past performance and is not indicative of future returns. There is no guarantee that the investment objectives will be achieved.
For Canadian institutional investment professionals only. Not for further distribution. The information contained herein is for information purposes only. The information has been drawn from sources believed to be reliable. Graphs and charts are used for illustrative purposes only and do not reflect future values or future performance of any investment. The information does not provide financial, legal, tax or investment advice. Particular investment, tax or trading strategies should be evaluated relative to each individual’s objectives and risk tolerance.
This material is not an offer to any person in any jurisdiction where unlawful or unauthorized. These materials have not been reviewed by and are not registered with any securities or other regulatory authority in jurisdictions where we operate. Any general discussion or opinions contained within these materials regarding securities or market conditions represent our view or the view of the source cited. Unless otherwise indicated, such view is as of the date noted and is subject to change. Information about the portfolio holdings, asset allocation or diversification is historical and is subject to change.
This document may contain forward-looking statements (“FLS”). FLS reflect current expectations and projections about future events and/or outcomes based on data currently available. Such expectations and projections may be incorrect in the future as events which were not anticipated or considered in their formulation may occur and lead to results that differ materially from those expressed or implied. FLS are not guarantees of future performance and reliance on FLS should be avoided. Any indices cited are widely accepted benchmarks for investment and represent non-managed investment portfolios. It is not possible to invest directly in an index. Information about the indices allows for the comparisons of an investment strategy’s results to that of a widely recognized market index. There is no representation that such index is an appropriate benchmark for such comparison. Results for an index do not reflect trading commissions and costs. Index volatility may be materially different from a strategy’s volatility and portfolio holdings may differ significantly from the securities comprising the index.
The securities disclosed may or may not be a current investment in the portfolio. Any reference to a specific company listed herein does not constitute a recommendation to buy, sell or hold securities of such company, nor does it constitute a recommendation to invest directly in any such company.
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