What the fund lends on.
Most of the fund is lent directly to borrowers, and every loan is secured by a first registered mortgage over the property. Loans are written for property investment and development, including construction loans that are paid out in stages as the building progresses.
The fund can also hold a smaller share in other mortgage investments, such as units in other mortgage funds and existing first mortgages bought at or below face value, and it keeps some cash. The limits on each are set out in the information memorandum.
How a loan is assessed.
Before the fund lends, one of the founders meets the borrower and visits the property. An independent valuer values it, and the loan is sized to leave a margin between what is lent and what the property is worth. That margin is the borrower’s own money, and it absorbs a fall in value before the fund does.
On construction loans, the valuation covers the property as it stands and as it will be once complete, and the cost to finish the work is checked before each payment is released.
Where the income comes from.
Borrowers pay interest on their loans. After the fund’s costs and fees, that interest is paid to investors as distributions.
Distributions are paid as the fund receives cash from borrowers, so the timing is not fixed and will not be even across a year. On construction and development loans, interest is often received when the project is completed and the loan is repaid.
The fund targets a return linked to the RBA cash rate, so the target moves when the Reserve Bank changes rates. The current target, and how it is worked out, is set out in the information memorandum. A target is not a forecast or a guarantee.
The terms.
The full terms are in the information memorandum, which governs if anything here differs.
| Target return | The fund targets a return linked to the RBA cash rate. The current target is set out in the information memorandum. A target, not a forecast or a guarantee. |
| Security | First registered mortgages over Australian property, independently valued before settlement. |
| Distributions | Paid as the fund receives cash from borrowers. The timing is not fixed and will not be even across a year. |
| Access to capital | A twelve month minimum term, and the investment should be treated as illiquid beyond it. |
| Fees | No entry or exit fee. A management fee and a performance fee apply, set out in full in the information memorandum. |
| Minimum investment | Set out in the information memorandum. |
| Who can invest | Wholesale clients only, under sections 761G and 761GA of the Corporations Act 2001. |
| Trustee | Non Correlated Capital Pty Ltd ABN 99 143 882 562, AFSL 499882, which also acts as custodian and issues the units. |
| Licence | Oxford Capital Pty Ltd is a corporate authorised representative (CAR No. 1323556) of Non Correlated Advisors Pty Ltd, AFSL 430126. Oxford Capital does not hold an Australian Financial Services Licence of its own. |
| Reporting | Investors receive reporting on the fund’s loans and performance. The content and frequency are set out in the information memorandum. |
The main risks.
Every investment in the fund carries risk, and you can lose some or all of the money you invest. The information memorandum sets the risks out in full.
| Borrower default | A borrower may fall behind or stop paying. The fund may then need to enforce its mortgage and sell the property, which takes time, costs money and can hold up distributions. |
| Property values | If a property sells for less than the loan against it, the fund loses money on that loan. |
| Construction | Building projects can run late or over budget, and a builder can fail. Any of these can delay repayment or reduce what the fund recovers. |
| Liquidity | There is no market for units in the fund. Expect to hold your investment for at least the minimum term, and possibly longer. |
| Concentration | A new fund holds a small number of loans, so a problem with one loan has a larger effect on the whole fund. |
| Interest rates | The target return moves with the RBA cash rate, so it falls when rates fall. |
| Key people | The fund depends on a small team, and losing a founder would affect how it is run. |
| No track record | The fund is new and has no history of returns to judge it by. |
How to invest.
- Request the pack We send the information memorandum and supporting material the same day you ask.
- Confirm you are a wholesale client Most people do this with a certificate from a qualified accountant. The tests are on the questions page.
- Read the information memorandum Take your own advice on it if you need to. We are happy to answer questions before you decide.
- Apply Complete the application in the pack. Your money goes to the fund’s trustee, and units are issued in your name.
Wholesale clients only
Read the full terms before you decide.
The information memorandum covers the loan parameters, every fee, the conflicts, the related party disclosures and the risks. Ask for it and you will have it today.