360 Capital Residual Stock Fund Presentation

REAL ASSETS PRIVATE EQUITY PUBLIC EQUITY CREDIT

360 Capital Residual Stock Fund October 2020

Confidential. 360 Capital Group, 2020. All rights reserved.

REAL ASSETS PRIVATE EQUITY PUBLIC EQUITY CREDIT

Disclaimer

This material has been prepared by 360 Capital FM Limited (ACN 090 664 396, AFSL 221474) ('Responsible Entity') as the responsible entity for 360 Capital Residual Stock Fund (ARSN 645 169 517) (the 'Fund') and the issuer of units in the Fund. A product disclosure statement in respect of offer of units in the Fund is expected to be available on or around 19 October 2020 and can be obtained by calling 360 Capital Information Line on 1300 082 130 (within Australia) or +61 2 8016 2884 (from outside Australia) between the hours of 8.30am and 5.30pm Monday to Friday AEST (excluding public holidays) or on www.360capital.com.au. The product disclosure statement in respect of the Fund should be considered in deciding whether to acquire or continue to hold units in the Fund. This material is a summary and does not purport to be complete. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. A reader should, before making any decisions in relation to their investment or potential investment in the Fund, seek their own professional advice. This document is not an offer or invitation for subscription or purchase of securities or other financial products. Indications of, and guidance on, future earnings and financial position and performance are “forward-looking statements”. Due care and attention has been used in the preparation of any forward-looking statements. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of the Responsible Entity, that may cause actual results to differ materially from those expressed or implied in such statements. There can be no assurance that actual outcomes will not differ materially from these statements. Except as required by law, the Responsible Entity does not undertake any obligation to publicly update or review any forward – looking statements, whether as a result of new information or future events. This information has been made available to the recipient for information purposes only. It is not intended to be, and does not constitute a product disclosure statement, prospectus, short form prospectus or profile statement as those terms are defined in the Corporations Act 2001 (Cth). It does not constitute an offer for the issue, sale or purchase of any securities, or any recommendation in relation to investing in any asset.

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Table of Contents

1

Opportunity Overview

P.4

2

The Market

P.6

3

Fund Strategy

P.8

4

Target Loan Characteristics

P.12

6

The Manager

P.14

7

Origination Channels

P.17

8

Track Record

P.20

A1

Investment Committee and Credit Process

P.27

P.3

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Section 1

Opportunity Overview P.4

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The Opportunity



360 RSF (RSF) is being launched by 360 Capital Group to provide investors the opportunity to invest in an unlisted, closed ended 3-year mortgage fund (option to extend for up to 2-years) that will invest in loans for completed, individually titled residential apartments and townhouses throughout Australian metropolitan markets.

6.00% p.a. Target Yield



360 Capital Group and its managed funds have originated and financed over $220 million of loans in Commercial Real Estate Debt with a focus on mortgage construction and residual stock finance.

15-Year Track Record



To capitalise on the opportunity for funding completed residential apartments and townhouses, the Fund is seeking to raise $50m to invest in a pool of suitable investments with a target yield of 6.0% net of fees and expenses

Up to $50m Offer Size



360 Capital Group, through its two-loan origination and brokerage businesses, AMF Finance and Dealt, continues to see significant deal flow of attractive investment opportunities throughout the major metropolitan markets of Australia.

$1.00 Offer Price



A General Offer of up to up to $50m will be open to retail and wholesale investors. The offer will open on 19 October 2020 and close on 31 March 2021.



360 RSF is well positioned to take advantage of the growing Australian residual stock market opportunity with strong capability in origination, execution and portfolio management coupled with robust governance, finance and oversight committees

With a focus on capital preservation and loss minimization

15-year real estate track record, with over $3 billion of real estate transactions

Diversified portfolio of loans to completed apartments and townhouses

Three-year fund term, unlisted product with no Unit price volatility

Regular Monthly Income Distributions will be paid monthly on deployed funds

3-Year Fund Term 3-year fund term (option to extend for up to 2-years) to take advantage of the current market opportunity P.5

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Section 2

The Market P.6

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New dwelling approvals Record recent completions resulted in excess stock levels, creating an opportunity for residual stock lending.

With lower new building approvals the market will gradually absorb this stock in due course.

Seasonally Adjusted Ave (15-20)

QLD Dwelling Approvals

11,000 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000

6,000 5,000

8 8 9 9 0 0 1 2 2 3 3 4 5 5 6 6 7 7 8 9 9 0 00 00 00 00 01 01 01 01 01 01 01 01 01 01 01 01 01 01 01 01 01 02 -2 g-2 r-2 t -2 y-2 c-2 ul-2 b-2 p-2 r-2 v-2 n-2 n-2 g-2 r-2 t -2 y-2 c-2 l-2 b-2 p-2 r-2 n u a c p a c p Ja Au M O Ma De J Fe Se A No Ju Ja Au M O Ma De J Fe Se A

Ave (08-14)

Seasonally Adjusted Ave (15-20)

4,000 3,000 2,000 1,000

8 8 9 9 0 0 1 2 2 3 3 4 5 5 6 6 7 7 8 9 9 0 00 00 00 00 01 01 01 01 01 01 01 01 01 01 01 01 01 01 01 01 01 02 -2 g-2 r-2 t -2 y -2 c-2 ul-2 b-2 p-2 r-2 v -2 n-2 n-2 g-2 r-2 t -2 y -2 c-2 l-2 b-2 p-2 r-2 n u a c p a c p Ja Au M O Ma De J Fe Se A No Ju Ja Au M O Ma De J Fe Se A

Ave (08-14)

SA Dwelling Approvals

Seasonally Adjusted Ave (15-20)

Ave (08-14)

WA Dwelling Approvals 3,500

1,300

3,000

1,100 900 700 500

8 8 9 9 0 0 1 2 2 3 3 4 5 5 6 6 7 7 8 9 9 0 00 00 00 00 01 01 01 01 01 01 01 01 01 01 01 01 01 01 01 01 01 02 -2 g-2 r-2 t -2 y -2 c-2 ul-2 b-2 p-2 r-2 v-2 n-2 n-2 g-2 r-2 t -2 y -2 c-2 l-2 b-2 p-2 r-2 n u a c a c p p Ja Au M O Ma De J Fe Se A No Ju Ja Au M O Ma De J Fe Se A

Ave (08-14)

Total Number

1,500

Seasonally Adjusted Ave (15-20)

Total Number

Total Number

VIC Dwelling Approvals

8 8 9 9 0 0 1 2 2 3 3 4 5 5 6 6 7 7 8 9 9 0 00 00 00 00 01 01 01 01 01 01 01 01 01 01 01 01 01 01 01 01 01 02 -2 g-2 r-2 t -2 y-2 c -2 ul-2 b-2 p-2 r-2 v-2 n-2 n-2 g-2 r-2 t -2 y-2 c -2 l-2 b-2 p-2 r-2 n u a c p a c p Ja Au M O Ma De J Fe Se A No Ju Ja Au M O Ma De J Fe Se A

Total Number

Total Number

NSW Dwelling Approvals 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000

2,500 2,000 1,500 1,000 500

8 8 9 9 0 0 1 2 2 3 3 4 5 5 6 6 7 7 8 9 9 0 00 00 00 00 01 01 01 01 01 01 01 01 01 01 01 01 01 01 01 01 01 02 -2 g-2 r-2 t -2 y-2 c -2 ul-2 b-2 p-2 r-2 v-2 n-2 n-2 g-2 r-2 t -2 y-2 c-2 l-2 b-2 p-2 r-2 n u a c a c p p Ja Au M O Ma De J Fe Se A No Ju Ja Au M O Ma De J Fe Se A

Seasonally Adjusted Ave (15-20)

Ave (08-14)

P.7

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Section 3

Fund Strategy P.8

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Investment Characteristics

1. Regular Income Target distribution 6.0% p.a. paid monthly

2. Unique Asset Class

3. Secured Credit

4. First Loss Buffer

5. Experienced Manager

Structural sector shift with ongoing regulatory and compliance requirements

All loans are secured by first and only mortgage with the Trustee of the Fund the registered lender on record

30% first loss buffer offering significant downside protection

360 Capital Group has a proven track record in delivering strong returns in alternative assets

Investment Characteristics

P.9

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Fund Terms

Target Return

1

6% p.a. net to investors

Distributions

2

Monthly

Size

3

Up to $50m

Term

4

3 years (option to extend up to 2-years)

Pipeline

5

Strong pipeline, strategy to recycle capital up until the end of year two

Target Market

6

Australian metropolitan markets excluding Tasmania and Northern Territory

P.10

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Target Markets Queensland - Total population: 5.16m - Population growth: 1.70% - Annual population increase: 85,000

Australia

- Total population: 25.6m - Population growth: 1.4% - Annual population increase: 357,000

New South Wales - Total population: 8.157m - Population growth: 1.1% - Annual population increase: 87,800 Western Australia - Total population: 2.656m - Population growth: 1.5% - Annual population increase: 39,600 Australian Capital Territory - Total population: 0.429m - Population growth: 1.1% - Annual population increase: 4,600 South Australia - Total population: 1.767m - Population growth: 1.0% - Annual population increase: 17,900

Victoria - Total population: 6.689m - Population growth: 1.8% - Annual population increase: 116,500

Target Markets The above figures published in September relate to the financial year ended 31.03.2020

P.11

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Section 4

Target Loan Characteristics

P.12

P.12

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Target loan characteristics

Geographic Restrictions

1

Australian metropolitan markets with populations of 200,000 plus

Typical Loan Size

2

$5m to $20m

Loan to Value Ratio

3

65% Loan to value ratio ("LTV") for the weighted portfolio 70% LTV on an individual loan

Target Loan Tenor

4

12 to 24 months

Target Interest Rate

5

7.5% to 9.5% p.a. capitalising monthly

Security

6

First mortgage, where possible personal guarantees will be sought

P.13

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Section 6

The Manager P.14

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The manager: 360 Capital Group (ASX: TGP)

360 Capital is an ASX-listed, alternative asset investment and funds management group focused on strategic investment and active management of alternative assets.

Established & Successful Track Record 14 years

Founded in 2006, 360 Capital has been successfully managed through multiple cycles

60%

Investor returns over 10+ years1

Diversified Product Offering REAL ASSETS

360 Capital REIT (ASX:TOT)

PRIVATE EQUITY Cardioscan Pty Ltd

PUBLIC EQUITY

CREDIT

360 Capital Active Value Equity Fund

360 Capital Credit Income Fund

Ralton Asset Management

360 Capital Enhanced Income Fund (ASX:TCF)

Fibreconx Pty Ltd

c. $220m

ASX Market Cap

~$200m

Free cash balance across the group and its funds, no debt

c. 34%

Owned by staff and Directors

360 Capital Digital Infrastructure Partners 360 Capital Digital Infrastructure Fund (ASX:TDI) Velocity Property Group (ASX:VP7)

1. On a total return basis assuming dividends were reinvested. Since 360 Capital’s initial strategic stake in Trafalgar (ASX:TGP) , through which 360 Capital later listed

P.15

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Disciplined lending parameters FY20 Real Estate Lending 1.

Established alternative lender with a disciplined capital allocation approach

2.

Exposures in real estate and development finance

3.

Multi-platform originator: a. Dealt b. AMF Finance c. Advisory and broker network d. 1,000 advisors and brokers

4.

Active pipeline of >$280M

5.

Ability to finance across the capital stack

Deals Reviewed Over $3.48 Billion

231 deals screened for the period ending December 2019

10.8% Terms issued but did not proceed, largely due to competitors softening covenants

Term Sheets Issued $389.97 Million

1.73%

Deals Closed $76.3m

of loans reviewed, reach settlement

P.16

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Section 7

Origination Channels P.17

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Origination platforms: AMF Finance • Over 1,000 finance brokers get regular updates • Broker accreditation and login • Tracks every DA submitted in Australia updated up to four times per day • Introducer incentivisation program • On-line applications across eight loan products • Over 33,000 developer, advisors, agents, architects etc receiving regular correspondence • Standardised loan documentation; capable of financial close within 24 hours • Digital marketing strategy has generated significant deal flow and market awareness

www.amf-finance.com.au

P.18

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Origination platforms: dealt.com.au

ONLINE COMMERCIAL MARKETPLACE

dealt capitalises on the rise of alternative lenders and the growing funding gap left by traditional banks.

Whilst online lending solutions proliferate in the residential mortgage and small business lending sectors, there are no solutions for the more complex and less homogenous areas of commercial real estate development and investment financing. dealt's goal is to provide a marketplace where lenders and borrowers can more efficiently transact, by facilitating the collection, transfer and analysis of information, to enable the subsequent negotiation and approval of deals. dealt is able to be replicated globally and is infinitely scalable.

P.19

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Section 8

Track Record P.20

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Real Estate Debt Track Record

Progressively drawn senior

Progressively drawn senior

Development of 162 room 4-star hotel in Melbourne CBD

Development of 28 room residential accommodation facility in Coogee, NSW

Construction of pre-leased hotel in Perth, WA

Net Realisation1: $53.0m Facility Amount2: $36.3m (68.4% LVR)

Net Realisation1: $11.4m Facility Amount2: $ 8.0m (70% LVR / 80% LTC)

Net Realisation1: $76.0m Facility Amount2: $ 7.6m (70% LVR / 78% LTC)

Internal Rate of Return (IRR): 16.8% p.a.

Internal Rate of Return (IRR): 15.1% p.a.

Internal Rate of Return (IRR): 16.8% p.a.

Term: 12.5 months

Term: 20 months

Term: 24 months

Repaid via refinance with term debt at practical completion

Repaid via refinance

Repaid via refinance

1.Net Realisation based on “As If Complete� valuation (net of GST & selling costs) 2.Facility amount including capitalised interest and fees

Mezzanine

P.21

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Real Estate Debt Track Record

Progressively drawn senior

Cash advance senior

Development of 27 townhouses in Greenway, ACT

Development of 2,396 sqm (GLA) medical centre in Sunbury, VIC

Construction of 30 residential apartments in Western Sydney

Net Realisation1: $13.5m Facility Amount2: $ 9.7m (72% LVR)

Net Realisation1: $13.0m Facility Amount2: $ 9.3m (71.2% LVR)

Net Realisation1: $16.8m Facility Amount2: $ 8.2m (48.9% LVR)

Internal Rate of Return (IRR): 58.7% p.a.

Internal Rate of Return (IRR): 14.6% p.a.

Internal Rate of Return (IRR): 13.5% p.a.

Term: 15 months

Term: 17 months

Term: 10 months

Repaid via refinance

Repaid via refinance

Repaid via settlement of sales

Progressively drawn senior

1.Net Realisation based on “As If Complete” valuation (net of GST & selling costs) 2.Facility amount including capitalised interest and fees

P.22

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Real Estate Debt Track Record

Cash advance senior

Progressively drawn senior

Cash advance senior

Bridging facility for portfolio of seven (7) childcare assets leased to Affinity Education

Development of 94 apartments in Western Sydney

Medium density complex comprising 22 luxury apartments in New Farm, QLD

Current Valuation: $35.6m Facility Amount2: $23.1m (65% LVR)

Net Realisation1: $46.7m Facility Amount2: $31.8m (68% LVR / 79% LTC)

Net Realisation1: $8.0m Facility Amount2: $4.7m (58% LVR)

Internal Rate of Return (IRR): 11.5% p.a.

Internal Rate of Return (IRR): 15.4% p.a.

Internal Rate of Return (IRR): 10.5% p.a.

Term: 12 months

Term: 24 months

Term: 12 months

Repaid via refinance

Repaid via refinance

Repaid via settlement of sales

1.Net Realisation based on “As If Complete� valuation (net of GST & selling costs) 2.Facility amount including capitalised interest and fees

P.23

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Residual Stock Example: Brisbane, QLD Market Value: $8.0m Avg. price $1.6m

Property Type

Developer Equity $3.35m

LTV = 58% Max

Residual Stock $4.65m

Avg. debt value $930k

Product

Five (5) Residential apartments 5 residual apartments of a 3 to 5 storey boutique residential complex, providing a total 22 prestige apartments. It offers a premium location situated in a quiet river facing street (200m), 4km east of Brisbane CBD and 600m from the New Farm ferry terminal.

The complex building features a rooftop terrace with river views, lap pool, zen garden and private home cinema room.

The unit mix for the residual stock is summarised below: Product Type

No. Of Units

No. Of cars

3 Bed, 2.5 Bath

2

2

3 Bed, 2.5 Bath + Study Nook

1

2

3 Bed, 2.5 Bath + Study

2

2

Size

• Market Value: $8.0m • Facility Amount: $4.65m • LTV: 58% (maximum)

Term

12 months facility which was repaid on time in May 2020

Interest Rate

9.0% p.a. capitalising monthly

Security

 First Registered Mortgage  Corporate Guarantee secured by a GSA over the Borrower  Directors guarantees

P.24

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Residual Stock Example : Port Coogee, WA Commencing Market Value: $23.03m

Property Type Avg. price $700k

Thirty-three (33) Residential apartments “Marina Edge” completed in late 2017 comprises 109 residual apartments over 8 storeys facing the marina in North Coogee.

The unit mix for the 33 residual stock is summarised below:

Developer Equity $13.35m

Product Type

No. Of Units

No. Of cars

2 Bed, 2 Bath

25

2

2 Bed, 1 Bath

8

1

Product LTV = 44% Max

Initial Residual Stock Facility Limit: $9.68m

Size

• • • •

Term

18 months. Then AMF Finance agreed to rollover the loan facility for a further 12 months

Interest Rate

10.0% p.a. capitalising monthly

Security

 First Registered Mortgage  Corporate Guarantee secured by a GSA over the Borrower  Directors guarantees

Avg. debt value $300k

Market Value (net GST): $23.03m Facility Amount: $9.675m LTV ratio: 44% (maximum) Rollover Facility Amount: $8.0m

P.25

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Residual Stock Example : Brisbane, QLD Commencing Market Value: $33.8m

Property Type

A luxurious 4 storey complex building with private basement parking situated on the river front in the heart of Bulimba, offering 24 apartments and 6 townhouse residences.

The complex building features a communal lap pool, uninterrupted river views and double lock up garages and individual entry for the townhouses.

Avg. price $2.0m

Developer Equity $19.4m

The unit mix for the residual stock is summarised below:

LTV = 68% Max

Initial Residual Stock Facility Limit: $23.6m

Fifteen (15) Residential apartments/townhouses

Product Type

Product Type

No. Of Units

No. of THs

No. Of cars

3 Bed, 3 Bath

2

n/a

2

3 Bed, 3 Bath

1

n/a

3

3 Bed, 3 Bath + Media Room

9

n/a

2

3 Bed, 3 Bath + Media Room

2

n/a

3

4 Bed, 4.5 Bath + Media Room

n/a

1

2

Size

• • • •

Term

12 months remaining of an 18-month loan duration

Interest Rate

8.50% p.a. capitalising monthly

Security

 First Registered Mortgage  Corporate Guarantee secured by a GSA over the Borrower

Avg. debt value $1.3m

Market Value (net GST): $28.5m Facility Amount: $19.5m Drawn Amount: $17.8m Loan to value ratio: 68% (maximum)

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Appendix A

Investment Committee and Credit Process P.27

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Management Team 360 Capital Executive

Credit Committee Andrew Moffatt Non-Executive Director

Brett Palmer Investment Committee

James Storey Head of Real Assets

Ian Harrison Investment Committee

Management Team Tony Pitt Managing Director

Tony Pitt Managing Director

Chris Chase Head of Private Credit

James Quigley Fund Manager Dennison Hambling Head of Equities

James Storey Head of Real Assets

Genevieve Naughton Debt Transaction Manager Glenn Butterworth Chief Financial Officer

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Credit Process

Origination Origination

Due Due Diligence Diligence

Origination and Due Diligence 1

2 3

Market sourced transactions with developers, brokers, advisers, Dealt platform, accountants and intermediaries Transaction structuring and financial modelling New transaction brief to management team for indicative support

4

Term sheet negotiations and mandate

5

Detailed Financial modelling and downside analysis

6

In depth management discussions

7

Third party due diligence including valuation, financial, tax, legal and operational

Credit Credit Committee Committee

Investment Investment Committee Committee

Investment Approval 1

2

3

4

Preparation of Credit Submission for Credit Committee

Financial Financial Close Close

Execution and Portfolio Management 1

Externally prepared legal documentation in the form of Facility Agreement

2

Negotiations on terms and conditions with external counsel

3

Execution of necessary security documents including Registered Mortgage and Specific Security Agreements

4

Actively monitor against expectations, business plan and covenants. Maintain credit watch-list

5

Ongoing relationship management with borrowers including regular sales progress updates

6

Quarterly Investment Management Board portfolio reviews

Description of transaction, investment analysis, due diligence findings, risks & mitigants Presented to Credit Committee for Endorsement to Investment Management Board Appropriateness of investment considered in light of overall fund return, capital availability, risk profile and alignment with fund strategy

Portfolio Portfolio Monitoring Monitoring

P.29