“With nearly 50 years of combined experience in capital markets, catalyzing well over 400M Dollars in private offerings across North America, we are well positioned in growing the Exempt Market by introducing new and established financial professionals and businesses owners to the industry.�
Photo by Don Harper Photography
Private Placement
Made Simple
Table of Contents About Blueprint.................................................................................................................................. 3 Shift Into Drive Article .................................................................................................................... 4-5 “Why OMERS is changing gears from public to private market assets” “What’s Next for Private Placements”......................................................................................... 6-8 “Canada Pension Plan’s investments see ‘explosive’ growth”.............................................. 9-10 “Why millions of people & billions of $’s are moving away from the stock market”...............................................................................11-12 “Exemption Order” .................................................................................................................... 13-14 Recent Offering - Brant Park .................................................................................................... 15-16 The Value Blueprint Can Provide .................................................................................................. 17
About Blueprint With nearly 50 years of combined experience in capital markets, catalyzing well over 400M Dollars in private offerings across North America, Blueprint Global Partners continues to lead the way in this newly regulated industry. We work with financial professionals who are interested in distinguishing themselves in the industry by incorporating alternative investments into their repertoire and with proven businesses that have seven figure capital requirements that offer real collateral and strong prospects of future growth. Much of the wealth accumulated in the last decade has been through a healthy combination of real assets such as real estate holdings and funding sustainable businesses. Given the historic predictable performance of many of these asset classes, many financial professionals are still acquiring the knowledge and tools to adequately serve their clientele in this area. With public markets proving to be quite volatile and inconsistent over the last decade, both retail and institutional investors are increasingly moving towards private placements, also known as exempt market or alternative investments, to provide more consistent and predictable returns. There are many different products offered within the Exempt Market such as: • Real estate based offerings including land banking, multifamily housing, commercial & property development, • debt offerings including mortgages, bonds • oil and gas offerings. Blueprint is well positioned to continue growing the Exempt Market by introducing new and established financial professionals and businesses owners to the industry and in turn providing a platform for licensed individuals to offer alternative RRSP eligible solutions to their clientele. Financial professionals and business owners looking to participate in this newly regulated industry are encouraged to connect with us for more information. Blueprint Global Partners does not sell securities or offer investment advice.
p e n si o n s
❮❮ S t r a t e g y ❯❯
Shift into drive Michael Nobrega explains why OMERS is changing gears from public to private market assets By Neil Faba / Photography by Daniel Ehrenworth
I
n recent years, many pension plans have looked to private investments to mitigate some of the risk of public markets. For OMERS, this shift began in 2004. At the time, the fund—which has pension commitments to more than 400,000 members in Ontario—had an investment mix of 82% public market and 18% private investment holdings. But a new strategy adopted that February started OMERS on the road toward an asset mix goal of 53% public markets and 47% private holdings. “The principal reason it was done was to reduce our exposure to the volatility of the capital markets, especially public equity. The second reason was to acquire assets that would give us as predictable as possible long-term cash returns to fund the pension plan,” says Michael Nobrega, president and CEO of OMERS since 2007. (He previously headed Borealis, OMERS’ infrastructure investment entity founded in 1998.)
Of course, says Nobrega, the decision to change the asset mix was the easy part. Actually putting the wheels in motion has meant transferring about 35% of the fund’s $53 billion in assets to private markets—and making sure the investment choices are ones that management can live with for the long haul. “It’s not an easy exercise. You want assets you can live with for 25 years,” says Nobrega. “To do that, you have to keep your investment criteria in place. It’s easy to go and buy assets, but it’s a question of buying them at the right price, managing them properly and adding value to them later on.”
In the Driver’s Seat Once OMERS management had adopted the new investment strategy, the next decision it made was to use what Nobrega calls a “direct-drive” approach: actively managing its assets in-house where possible. This meant getting the right people and expertise in place to find
suitable assets for the fund and establishing the HR capability and technology needed to manage it all. According to Nobrega, much of the fund’s success comes from the organization’s “horizontal structure.” Separate internal groups manage the plan’s assets—Oxford Properties (real estate), Borealis Infrastructure, OMERS Private Equity and OMERS Capital Markets—each with its own CEO, investment team and results targets. “A pension fund makes money in two ways: it leverages its capital, and it leverages its people. And the best leverage is to have people with ownership responsibility [to leverage the capital].” But even with strong investment teams at home, he believes that finding the best investments requires “boots on the ground” worldwide. To that end, OMERS has opened two branch offices. The London office opened in 2008 and now has a staff that speaks seven languages and gives the fund a foothold to explore investment BenefitsCanada • December 2011 / 57
opportunities across Europe. A formal New York office (OMERS Private Equity and Oxford Properties previously had small individual teams in the city) followed in the fall of 2011. “I think we made a good decision to open our offices in New York and London. That has really helped us in terms of sourcing investments,” he comments. “To get to where we want, we need to do two things: find the right people, and deploy the capital. Those two offices have helped us attract people we couldn’t attract to Toronto, because they want to live in New York or London. And they’re also part of the networks in those locations, which gives us an advantage in getting to the assets.” The assets, of course, are the key. OMERS’ asset mix is now about 60/40 in favour of public markets. And while Nobrega says he’s less concerned about the exact mix than making sure that the assets held are right for the fund, he does see areas where OMERS can continue to grow its private holdings. For one, Nobrega is bullish on Western Canada. He points out that Canada ranks at or near the top in global production of potash, uranium and oil and gas, and many of those commodities come from west of Ontario. In addition, business is booming in the region, and OMERS already holds a significant piece of that growth. The fund’s holdings include about 25% of Class A office space in Calgary; in Edmonton, that figure is 10%. “Between now and 2015, assuming the world continues as it is, the GDP of Western Canada will be approximately that of the rest of Canada,” says Nobrega, adding that OMERS’ investment in the region—which he already estimates is higher than that of any other Canadian pension fund—is bound to increase as that GDP share grows.
Long Road Ahead Nobrega likens the shift in OMERS’ strategy—and the building of a strong investment team and technology base—to the development of a luxury vehicle, which requires time and attention to bring it to a successful market launch. “I think OMERS is well positioned today, after building this thing for about 10 years. I believe we’re very far ahead of many plans. I think we’ve gone past the design stage to building the team and test
driving the car,” he says. “Now we’re in the production stage.” So far, that production has been good, though not without its struggles. Since 2004, the plan has earned average annual returns of 8.11%. Despite this, the plan is only 92% funded, and the funding deficit tripled in 2010 to $4.5 billion. But Nobrega is confident that the current strategy will generate average annual returns of between 7% and 11%, returning the fund to surplus as early as 2016. OMERS also sees opportunity for follow-on investments coming out of its holdings in Western Canada. As the country works to meet its 2020 emissions targets of 17% below 2005 levels, for example, corporations in the oil and gas sector will be increasingly in the spotlight. “As political pressure builds, [Western Canada] will have to look at its environmental record. [With] growth in the commodity business, there will be opportunities for growth in the environmental business,” through new technology, Nobrega adds. That need for technology will be addressed, in part, by entrepreneurs with new ideas. OMERS Ventures launched earlier this year with $180 million to invest in new companies over the next three years. While that allocation represents just a drop in the bucket of OMERS’ overall asset holdings, it’s not insignificant when compared with the roughly $1 billion that the Canadian Venture Capital Association estimates is invested in Canada annually. Nobrega says that while venture capital investments would typically be on the riskier end of the spectrum, many of the companies that OMERS will look to invest in will already have benefited from the initial seed investments offered through governments and university funding, and will be established enough to align with the fund’s goals for global growth and sustained returns. “It’s our intention to be the parent for some of the serious innovation in the country. And we hope the [venture capital investment] ecosystem will go from $1 billion to $10 billion annually over the next five years. That’s what we need in this country. Our intention in making this step is to encourage others to join us.” Neil Faba is associate editor of Benefits Canada. neil.faba@rci.rogers.com
Q&A Michael Nobrega’s views on pension investing and asset allocation How much significance will foreign investment have in OMERS’ overall asset mix in the coming years? We’re in the U.S. and the U.K., and we’ve bid on projects in other parts of what I call the developed world—the G7 countries plus Australia. We’re now doing above-the-ground due diligence on about 12 countries that we’d like to invest in. But if you go outside the country, you need to make sure you can hedge the currency properly, have credible partners in those places and can protect yourself against regulatory [regimes]. You want to do it carefully, and that takes some time. So, in the near future, I don’t see us falling below 40% to 45% [in Canadian investments]. When and where will OMERS open its next global office? We’d like to look at Asia and Latin America. We invest in these markets now through public markets and funds. But we don’t like the idea of funds, because they have two fiduciary responsibilities [to fund holders and financial institution shareholders] and we’d like to have one [OMERS members.] The next one to come will be in Asia, if [the board] allows us to do it, but we have to demonstrate the business case for it. And that won’t come before 2014 at the earliest. In the meantime, we’d look to partner with serious well-known, well-established partners out there. What has OMERS learned in the process of bidding for private assets? Do not expect to win every bid; otherwise, you are likely overpaying. Stick to your investment criteria, leverage and pricing. OMERS has stuck to its limits rather than overreaching for assets, which we believe could cause us problems later. While we have lost projects based on pricing, we have developed a lot of business intelligence just by doing the bids. BenefitsCanada • December 2011 / 59
What’s next for private placements? Bev Cline / November 05, 2012
Volatility in the equity markets and frustrating yields are causing clients to demand alternative ways to boost returns. At the same time, businesses are searching for alternatives to traditional markets to raise capital. “This creates a perfect storm for the rising popularity of exempt-market products,” says Marcin Drozdz, managing partner with Blueprint Global Partners Inc. in Calgary. Providing suitable clients with these investments, which are generally securities offered without prospectuses, can be a way to differentiate yourself, he says. Read: Help clients get into private equity The type of client most likely to benefit from exempt market products has a stable personal and financial life, says Yvonne Martin-Morrison, a principal advisor with Purpose Inspired Solutions in Calgary. That’s important, because liquidity is not guaranteed. “There are some private investments where the funds may be inaccessible for a number of years,” she says. So, investors who have run businesses, or significant understanding as to how businesses work, are often good potential candidates. “They have experience [with] how a business moves through its cycles of operation and can evaluate the exempt-market product from that perspective.” Read: Don’t gloss over exempt market risks
William McNarland, chief investment officer at Pinnacle Wealth Brokers Inc. in Calgary, says it’s important clients understand exempt market products are not reporting issuers. In the case of a public company, investors can go to sedar.com to get a company’s financial statements, letters of material change, and news releases. In contrast, “an exempt market company offering a private debt product has no obligation to report,” he says, “so I would caution advisors or retail clients to make sure a reporting structure has been negotiated for them or they have negotiated it themselves.” You also need to tell clients “an offering memorandum is not reviewed by securities commissions, so more due diligence is required,” he adds.
What’s next for the exempt market? Advisor.ca readers will need to keep a sharp eye on possible changes affecting clients’ abilities to purchase exempt market products. Ontario, in particular, could experience significant changes. In 2011, the total amount of capital raised in Ontario and reported to the OSC through exempt distributions was approximately $87 billion. In June 2012, the regulator broadened its exempt-market review to consider whether it “should introduce new prospectus exemptions that may assist capital raising for business enterprises, while protecting the interests of investors.” Read: Exempt markets deliver results Issuers may start releasing more products with liquidity built in, says Drozdz. As example, “a mortgage investment corporation in the exempt market might create a liquidity buffer of 10% redemption every year.” But this feature could cost an investor part of the return, which advisors would need to clearly explain, he adds. Currently, the “most popular category among investors is private fixed income, rather than private equity,” says McNarland. Real estate investments are popular, but he says client interest is shifting toward other categories. He’s seeing growth in the number of opportunities in small-business lending, asset-backed lending (factoring and account receivables) and oil and gas (production or oil field service lending). In the past few months, he’s finding “increased interest among issuers in obtaining funding for new technologies, including for mobile applications.” Read: Lots of cash doesn’t buy investment smarts Darren M. Smits, a partner with Miller Thomson LLP in Calgary, agrees the range of sectors looking to raise capital is expanding. “Ten years ago, when I began to practice in the exempt-market industry, funds were primarily being raised in Western Canada for either mining, oil and gas or real estate projects,” he says.
Then came the tough economy. “Since 2007-2008 when the traditional banks tightened up their lending requirements it became more difficult for some clients to access capital requirements,” says Smits. “A borrower needs to have a history of significant uninterrupted cash flow, with very little uncollected accounts receivable. For instance, start up companies, land development companies, etc., do not have the operating history necessary to obtain a loan from a traditional bank.” In addition, “we have often seen that banks are unwilling to increase a credit facility for a current customer when the customer requires capital to expand or grow its business because its credit [is] based on past cash flow, not potential cash flow.” Read: Avoid exempt market risks However, says Smits, “our clients’ needs remained unchanged as they continued to require access to capital. Accordingly, we have witnessed a significant increase in clients utilizing the exempt-market industry as a way to expand and to grow their business,” he says. Examples include clients involved in restaurants, franchising, fabrication, technology, oil-field services and home-care facilities. Drozdz says any concept relatively new to the public, including the exempt market, has a cycle: “First it’s ridiculed, then it’s denied and then, it is accepted as normal.” In the case of the exempt market, it’s in the third stage. “In three-to-five years investing in private placements will be commonplace.” Fortunately, there are “more resources available today than ever before for advisors who want to bring these investments to clients,” says Martin-Morrison, who has used private investments in the exempt market since 1997. “There is high quality due diligence and assistance with compliance, registration and licensing, and more potential to discern suitable options for your clients.” Drozdz, Martin-Morrison and McNarland will be speaking at WEMA’s Exempt Market Advisor Education Forum on November 7. Originally published on Advisor.ca
Canada Pension Plan's investments see 'explosive' growth Whether they realized it or not, many Canadians did rather well in 2012 investing in companies that included Nintendo, Rolls Royce and MasterCard. The odds are also good that many of us will one day reap the benefits of our holdings in Australian shopping malls, toll roads in Chile and the sale of a $964-million stake in Skype, which were just three of the more notable deals that passed last year through the ledgers of the Canada Pension Plan. The fund behind Canada's largest single-purpose pension was worth just over $170 billion by the end of September 2012, up from some $152 billion in 2011, partly on the strength of investments that include overseas real estate and infrastructure, according to the Canada Pension Plan Investment Board. The Toronto-based board has since 1997 invested the pension's funds on behalf of the government — tasked with helping keep the CPP, a key ingredient of so many retirement plans, in the black. Residents of Quebec are paid through a separate pension, the QPP, which is Canada's second largest pension fund and is managed by Caisse de dépôt et placement du Québec. The Caisse, which manages not just the QPP but several other public pension and insurance plans, is also an aggressive investor in a wide range of domestic and international ventures, with net assets totalling $165.7 billion as of June 30, 2012. CPPIB's investments returned 6.6 per cent for the end of its last fiscal year, back in March; just above the four per cent plus inflation the bookkeepers say is needed to keep the fund sustainable at current contribution levels. CPPIB and other public Canadian pension funds, such as the Ontario Teachers' Pension Plan, are these days outperforming public pensions elsewhere in the world. "They've clearly done a good job… it's been explosive growth," Paul Taylor, chief investment officer for fundamental Canadian equities at BMO Asset Management, said of of the investment board's management of CPP funds. The investment income isn't currently needed to maintain pension payments. Those expenses are covered by CPP contributions, though that is expected to change in 2021. By that time, "a small portion" of the investment income will be needed to make ends meet, according to CCPIB. "The growth of the overall asset pool has been meaningfully moved along by actual contributions versus market growth," says Taylor. Eight years from now, "we'll be paying more in benefits than we're collecting in contributions." That and the overall poor state of retirement savings among Canadians have led to calls for changes to CPP. Last year saw CPPIB invest in AMP Capital Retail Trust, which is part owner of two prominent Australian shopping malls. It also paid $1.1 billion for a near-majority stake in five toll roads in Chile and almost tripled its initial investment in Skype when the online video call service was bought by Microsoft.
Those deals are in keeping with a trend at pension funds away from public equity. CPPIB's newly appointed and well-regarded CEO, Mark Wiseman, has said private equity, real estate and infrastructure are a better fit for the long view and relatively risk-averse tastes of CPPIB. "We believe that private equity assets can produce risk-weighted returns that will outperform public equities in the long run,” he told the Globe and Mail in September 2012. CPP's holdings in publicly traded companies amounted to 33.2 per cent of the portfolio in June 2012, down from 45.7 per cent in June 2009. The change "makes a lot of sense" says Taylor. "By keeping a big chunk of their assets away from the public market, they get away from all that short-term noise. They don't want to go on a roller-coaster." CPPIB is also gradually adding more international investments. About 40 per cent of its portfolio was Canadian in 2012, and though the board says "a large part" of the fund will remain invested at home, the need for a diverse portfolio will over time see more of its cash go overseas. "A strategy that invests predominantly in Canada would not be in the best interests of CPP contributors and beneficiaries," says CPPIB on its website. Large deals closed recently in the U.S. include a joint effort to acquire cable TV distributor Suddenlink Communications and CPPIB's $400-million investment in the auto racing Formula One Group. Upon closing the shopping mall deal, Wiseman also expressed a general interest in Australian investments in light of, among other things, the country's resilience during the recent global economic crisis. Leo Kolivakis, publisher of the Pension Pulse blog and a former senior analyst at Caisse de dépôt et placement du Québec, applauds the board's recent deals in the U.S. but has some doubts about Down Under. Australia's similarity to Canada — both are resource-based economies — does little for the diversity of CPPIB's portfolio, says Kolivakis, and there are signs of weakness in its real estate market. "What concerns me about Australia is the same thing that concerns me about Canadian real estate … that consumers are over-leveraged," he said. "The housing bubble has burst over there, and it's going to burst over here as well. "But having said that, these are smart guys, they've done their homework, and they don't need to sell tomorrow. They can keep an investment for a long time and sell when the time is right." CPPIB invests in a dizzying array of companies — everything from Porsche, Coca-Cola and the maker of Tootsie Rolls to more controversial businesses such as alcohol and tobacco firms and some of the world's biggest weapons manufacturers, which might raise a few eyebrows among some of the fund's contributors. AnheuserBusch, Imperial Tobacco and Lockheed Martin are among the portfolio's holdings, according to CPPIB's latest update. The board is mandated by law to evaluate companies only by their investment potential; morals and politics generally don't enter the picture. And though some Canadians might not approve, changing the law that governs the CPP is exceptionally hard and requires the approval of two-thirds of the provinces representing two-thirds of the population, a point not lost on the politicians currently wrestling with how best to preserve the CPP for the future.
Why millions of people & billions of dollars are moving away from the stock market It’s become unpredictable and emotional. Surprised? Probably not… Nothing sums up the above statement better than what happened with the Blue chip tech giant Google. A company that has seen nothing but their bottom line increase since 2004 saw their stock get pummeled in 2008 losing over 50% of its value from months earlier. Were people “googling” less? Did the internet turn off? Of course not. Blue chip companies like Google are not alone though. The volatility and undermining doubt that the masses have in the stock market is affecting everyone. Times have changed and the stock markets have gone digital. Wall Street/Bay Street is no longer vastly controlled by the stereotypical ‘stripe suit, MBA educated, over-achiever’ taking the subway into downtown type. Trading floors are no longer “floors”; they’ve gone digital and the people making moves in the market don’t actually need to be anywhere near the market. Individual investors equipped with nothing more than a trading account connected to their Ipad can collectively move millions of dollars in a matter of seconds based on something they just read about on twitter. Hedge Fund Managers hire eccentrically smart mathematicians and actuaries (like a super accountant) to calculate mathematical probabilities and employ sophisticated computer technology to make multiple trades simultaneously in an effort to expose short “windows” of opportunity. What is the smart money doing during these volatile times? Large pension funds such as OMERS (Ontario Municipal Employee Retirement System) who manage over 55 Billion dollars on behalf of over 400,000 employees and pensioner’s, are making moves into the private sector to avoid all the spikes and dips of the public markets. In 2004, the CEO Michael Norbrega made a (then) drastic move and announced his intentions to move from holding over 80% in public assets through the stock market to (over time ) creating a more balanced portfolio between public ( 53%) and private (47%) holdings. His reasoning was simple. He believed that
the public capital markets were becoming too volatile for his fund to be able to make a consistent return on their investment. In 2011 OMERS created a return just shy of 8% in their private investments such as real estate, infrastructure and private businesses; however they had a negative return of 0.22% in the public markets. All in all they created a blended return of approximately 4% solely because they had private investments in their portfolio. What can you do? Wayne Gretzky was once asked in an interview why he was so successful. His answer “I skate to where the puck is going to be; not where it is now”. Using that analogy, I believe that most of us are chasing after the puck and missing existing opportunities along the way. Take a page from the large successful investment groups out there and start exploring private opportunities. If you don’t have the time to immerse yourself in all the details (or don’t want too), I’d suggest working with people that are able to offer you alternative investments that are not tied to the public markets. In the investment industry these are called “exempt products” and are available to almost anyone in Western Canada through a due diligence document called an Offering Memorandum. Large investment firms out there, like OMERS and CPP ( Canadian Pension Plan), are currently investing directly into opportunities that the majority of advisors cannot sell such as : real estate, infrastructure and private businesses because they see the stability, consistency and dependable returns that these types of investments can produce for their investors. Learning about the exempt market is easier than ever now that this booming industry has become regulated and everyday Canadians can reach out and explore these opportunities through Exempt Market Dealers to see if alternative investments can be a fit for their portfolio.
Exemption Order The goal when Craig Skauge formed the Western Exempt Market Association in 2011 was to unite companies and individuals in Canada's four western provinces who were eager to change the regulations governing exempt securities, while also promoting their many benefits to investors. As it happens, WEMA gained traction from B.C. to Manitoba under Skauge's presidency, but it has also attracted dozens of members from across the country. Having surpassed his regional ambitions so quickly, Skauge is now setting his sights higher. Whether others in the industry like it or not, he wants WEMA to become the country's first truly national organization that represents the interests of exempt market participants. "We didn't want to step on anyone's toes," he says from WEMA's headquarters in Calgary. "But I'm the type of guy that believes if you want something done right, you do it yourself." Exempt market securities are ones that can be sold without a prospectus, the information document generally required by law to sell publicly traded stocks, bonds and mutual funds. The exempt market in Canada has substantially grown since the global financial crisis in 2008. Last year, $86.5 billion was raised in Ontario alone, up from $78.6 billion the year before. Skauge, who is also a business development manager at Olympia Trust Co., a company his father started by tapping the exempt market, says more entrepreneurs are being forced to turn to alternative methods to raise capital for their businesses. Large brokerages in the country won't return prospective financing calls unless it's regarding at least a $20-million deal and they certainly have no interest in financing requests for a million or two, he says. Canadian banks, meanwhile, have tightened their lending parameters in the past few years, making it more difficult for small businesses to qualify for loans and lines of credit. Exempt markets have also been fuelled by investors unhappy with volatile stock markets and near-zero saving rates. Despite the industry's growth and resulting investor attention, Skauge says the exempt market remains largely misunderstood and unfairly characterized by regulators as a kind of capital markets Wild West that needs stricter rules than public markets. For example, he doesn't like that companies looking for seed money are required to provide audited financial statements when they go to the Street for exempt financing. "Management prepared statements used to be fine. Now guys are spending as much as $7,000 on an audit for a brand new company with $100 in an account," he says. "The more regulation, the more cost, and it can drive guys out of business."
Another frustration for WEMA members is the requirement to provide costly quarterly statements and perform mandatory "know your client" updates. "In the public market, if someone's risk profile changes, you can do something about it, but in the exempt market, where securities are illiquid, once you're in it, you're in it," he says. "It's your advisor who should have given you proper advice to begin with." The biggest regulatory issue, however, is Ontario's take on who can invest in exempt markets in the province. In the rest of the country, anyone can invest in exempt market securities -- to a limit of $10,000 in certain provinces unless they meet certain investor net worth or income criteria that would allow them to invest more. But only accredited investors or people who have $150,000 to invest in one deal can purchase exempt securities in Ontario. Skauge says the rule leaves more than 90% of the province's investing population unable to access the exempt market. "Our members have lists of thousands of Ontario residents who have attended their seminars, but have been told, 'Sorry, until the rules change you can't do it,'" he says. "Given the fact that the Ontario economy is not without its hardships, it is time to open up another funding mechanism for small businesses and give investors whose confidence is shaken another option." The Ontario Securities Commission's recent decision to form an exempt market advisory committee in Ontario is at least partly due to WEMA's exhaustive letter-writing efforts. Ultimately, Skauge wants to see regulations changed so that exempt markets in all 10 provinces and three territories are better aligned. "We're not for freewheeling and no regulation, because that hurts confidence in the market and makes it harder to raise money. We're just trying to help find the right balance." David Pett, National Post
REAL DEVELOPMENTS
Brant Park Phase 2
INVESTMENT OBJECTIVE IN BRANT PARK
To provide a return on capital by financing the construction equity of a premium condominium in downtown Toronto Project Features • Brant Park is a stylish tower from Lamb Development Corp. located in Toronto's thriving King West district.
• With an original plan of 167 units, this new phase will bring the total up to 243 and include ground level retail shops & services.
• Brant Park is situated in the heart of the entertainment district with close proximity to restaurants, shopping and nightlife.
• 60% pre-sales, all approvals in place, construction scheduled for Q2 2013.
Investment Features • Unsecured participating bonds that will convert to a mortgage • Cash equity for construction • Regular cash flow paid quarterly (16% annualized) • Available to all registered plans • Sales via Exempt Market Dealer
LY
Investment Summary • • • • • • • •
Maximum Offering: $6,000,000 Estimated Returns: 32% Investment Term: 24 months Minimum Subscription: $25,000 Deferred lender fee: 16% Annual Fixed Distribution: 8% (paid quarterly) Developer: Lamb Development Corp Issuer: Brant Park Phase 2
TH
ON M 4
Year 1 Year 2
Interest Paid Quarterly Principal Repayment Deferred Lender Fee
$8000 -
$8000 -
-
-
Total Inflow
16%*
Totals $16,000 $100,000 $16,000
RM
TE
2 24% 22% 20% 18%
Principal $100,000
S AY P ,
16%
16% DEFERRED LENDER FEE (DLF)*
DLF
$132,000
8%
Fortress Real Capital is a product, not a mortgage brokerage or registered investment dealer. All offerings are made through licensed representatives. This offering is eligible for registered plans; please consult a registrant or Exempt Market Dealer for details. Suitability and investment knowledge is an important part of any purchase decision and will be reviewed and vetted by a registrant. This investment starts as a unsecured participating bond that will convert to a mortgage or security against land at a future date. Please refer to the Offering Memorandum for final terms of this offering before making an investment decision.
*See contract for details
R TE R A QU
Real Security | Real Returns
TM
Welcome to the FORTRESS Featured Projects
Invest in your future Fortress is an RSP eligible syndicate mortgage product that allows a consumer to invest directly into the proven market of Canadian real estate by becoming a mortgage lender. Your principal amount is fully secured against the subject property (as a mortgage) where you enjoy steady interest on your funds and, where available, a deferred lender fee at the end of your term.
30 projects Canada wide with a mix of high rise, low rise, commercial &retail developments.
Fixed terms, defined horizons. Investing that makes sense.
What is a syndicate mortgage? This is where several investors choose and collectively fund one mortgage instrument. What is unique is that each and every individual investor has their full face amount registered and secured in their favour at the Land Registry Office. This provides a direct charge against real estate and the collateral for your investment registered in your name; not a fund, not a pool, not collateral in favour of Fortress but in your individual name. This unique type of security is not available through any other type of product and forms the basis of Fortress Real Capital’s core strategy: Security, first and foremost.
Fortress Real Capital Products Development and Construction The core product allows everyday Canadians to invest directly into the Canadian construction and development industry. Representing 20% of Canada's real GDP, the construction market has long been the envy of investors around the world and is now available through Fortress. As an investor, you'll receive a fixed interest rate and share in profits from the development at its completion.
Servicing and Development One of the biggest transactions in the development process is the end builder or developer buying the site where their vision will be constructed. This product line allows you, the investor, to participate in the lift generated by the sale of improved lands to a buyer. Fortress focuses on mature parcels where the intended zoning is already in play or is supported by an official/secondary plan, ensuring projects are on shorter, more measurable horizons.
Testimonials "Fortress makes sense to my clients who want real estate in their portfolio but don’t want the risk of owning and carrying a property themselves. The defined terms and fixed interest rates helps me help them plan for their future." – Joe S (Mortgage Agent) "I was looking to diversify into real estate and invested in 2009. I'm quite pleased with my return and even more so that I exited in full and on time. I would recommend Fortress to anyone looking to add real estate as an asset class to their portfolio." - Desh C. (Financial Advisor) “To date, we have five projects where Fortress has provided equity. Of course, this has allowed Lamb Development Corp to do more projects. They represent an excellent alternative in the condo equity world.” – Brad J. Lamb (Developer)
Connect with Fortress http://twitter.com/FortressRC 1-877-299-3678 connect@fortressrealcapital.com www.fortressrealcapital.com
Disclaimer: Fortress Real Capital is a product offered by Centro Mortgage Inc. (FSCO License 10102). Fortress Real Capital transactions are all closed by Centro Mortgage Inc. unless specifically noted otherwise. The Fortress Real Capital product is only offered in select provinces. Ontario and Nova Scotia residents must speak with a licensed mortgage agent/broker for details. For residents of Alberta, Saskatchewan, Manitoba and British Columbia, purchases can only be made through registered investment dealers (e.g. Exempt Market Dealers) via Offering Memorandum. Please consult our website http://www.fortressrealcapital.com for more information.
How Can Blueprint Help You? Billions of dollars are flowing from the largest pension funds in Canada into alternative investments. Your clients are finding and looking for these new investment opportunities; are you ready to discuss the creation of new portfolios by investing outside of the public markets through transparent, direct private markets? Blueprint will help position you with your clients to distiguish yourself within the fastest growing financial sector. We will bring benefit to both you and your client.
Contact us today! Toll free: (888) 707-5777 Office Direct: (204) 415-7513 (204) 415-3876 info@blueprintglobalpartners.com www.blueprintglobalpartners.com 2-931 Nairn Ave., Winnipeg, MB R2L 0X9
Connect with us on... https://www.facebook.com/Blueprint2Group?ref=hl https://twitter.com/BlueprintGpart http://www.linkedin.com/company/blueprint-global-partners?trk=hb_tab_compy_id_1445946