PrivateInvest First Mortgage Income Fund

Investment Structure

The Fund is a pooled, open-ended, unregistered mortgage Unit Trust for wholesale and sophisticated investors, meaning it is always open for investment.

First Mortgage Income Fund

The Fund is a “Pure Play” First Mortgage Fund with a high focus on capital preservation and with no subordinated debt to bolster investors returns that brings additional risk to the Fund.

Stable Regular Income

Distributions are paid monthly or can be reinvested into the Fund.

Investment Returns

The Fund targets a return between 8.25% and 9.25% per annum, post fees and expenses.

Fund Performance

The Fund has met its target returns since inception over five years ago with a strong focus on capital preservation and liquidity. Whilst historical performance is not necessarily an indication of future performance, the investment return is expected to increase with the rise in wholesale interest rates in Australia.

Yield Quality And Stability

First mortgage registered security aligned with a rigorous credit approval process and properly priced lending interest rates that support stable investment distributions.

Loan Size And Term

These loans are generally in the $3 million to $25 million loan size range, with an average loan size of $6 million to $8 million which has the highest market demand and is considered the “unloved sector” as the amount is too small for bigger Funds. Average loan facility is generally 12 months which avoids the risk of loans with longer tenure trading through different property cycles.

Loan Origination

PrivateInvest has an extensive database of finance brokers and industry professionals providing the PrivateInvest loan origination team a solid weekly national supply of new loans allowing the team to “handpick” the right loans.

Low On Risk Curve

Average weighted sub 65% LVR on registered first mortgages, supported by Directors or personal guarantees, which further increases the security pool and hedges against default recovery and downside risk in declining markets.

Portfolio Repayment Strategy

Targeting commercial and industrial loans with less weighting on residential loans. Loans usually have a bridging strategy with refinance by mainstream ADI Banks. Another loan exit strategy is sale into Real Estate Investment Trusts.

Liquidity

Investors can redeem their investment in part or in full whenever one of the Fund’s underlying loans matures or by new investor subscriptions. Loans are constantly maturing and new capital inflow provides excellent liquidity. There is no lock-up period and no entry and exit fees.

Investment And Facility Management Expertise

The PrivateInvest team has decades of technical management experience in funds management, property development, valuation, property asset management and banking gained from prior work in the public and private financial sectors.

Management Fees And Trustee Fees

Management fee of 1.95% per annum payable monthly in arrears, calculated on the total Funds Under Management. The Trustee is entitled to an annual fee of 0.25% of the drawn loan balance of the Fund, payable monthly in arrears, subject to a minimum payment of $6,000.

Governance And Compliance

For a wholesale fund, we adopt a retail fund manager mindset. As an example, the pooled fund is a wholesale fund that does not require to be audited, unlike retail funds, but we choose to have the fund audited as a further level of quality governance. Our Trustee Board has Non-Executive Directors overseeing our highly skilled management team with additional oversight from our Investment Review Committee. This is all backed up by institutional grade investor reporting.

Minimum Investment

Minimum application $100,000, and thereafter in $10,000 multiples. This can be altered at the Trustee discretion.