Examples of current/past deals include;

Senior Construction Loan

INVESTMENT CHARACTERISTICS

Term: 1.5yrs

Asset Value: $14.4m

Yield: Capitalising coupon, repaid on exit

LVR: 53% p.a.

INVESTMENT THESIS

  • Approved childcare centre project with an agreement for lease and business acquisition agreement with an ASX listed operator.
  • Construction to be partly funded by the future lessee on a subordinated basis providing strong alignment for take-out.
  • Predictable contracted income and low LVR supported a refinance by big-4 bank post-completion.
  • Registered 1st mortgage with clearly defined controls and step-in rights to complete construction and fulfill lease.

Mezzanine Loan

INVESTMENT CHARACTERISTICS

Term: 1.5yrs

Asset Value: $92m

Yield: Capitalising coupon, repaid on exit

LVR: 70%

Security: Registered 2nd Mortgage

INVESTMENT THESIS

  • Value-priced 244 unit development in a mature suburb of the ACT with access to new transport hub.
  • ~130% presale cover from ACT-based buyers and no competing stock.
  • Registered 2nd mortgage with subordination rights behind big-4 bank.
  • Clear controls and step-in rights to sell units and deal with senior lender.
  • Material cash equity invested from a strong sponsor with long track record

Residual Stock Loan

INVESTMENT CHARACTERISTICS

Term: 2yrs

Asset Value: $24m

Yield: Capitalising coupon, repaid on exit

LVR: 62%

Security: Registered 2nd Mortgage

INVESTMENT THESIS

  • Completed retirement village purchased at circa 40% discount to valuation.
  • Sponsor acquiring the asset was managing it on behalf of a receiver, building a strong pipeline of sales prior to acquisition.
  • Ability to quantify the risk of selling the units below list price and recoup capital and earn, meaning the downside risk significantly mitigated.
  • Clear controls and step-in rights to sell units and deal with senior lender.

Listed Equity Trade

INVESTMENT CHARACTERISTICS

Term: 2.5yrs

Asset Value: $35m (implied)

Yield: 10% p.a. (on cost)

Exit Price: $51.75m

LVR: 33%

INVESTMENT THESIS

  • Two A-grade office assets remaining in a thinly traded NSX listed fund.
  • Access to the growing Newcastle CBD.
  • Strong tenant mix of Government and large corporates.
  • Counter-cyclical purchase at an 8.6% cap rate (NTA).
  • Purchased 19% stake via block trade at 15% discount to NTA.
  • Clear path to exit communicated by manager.

Asset Finance

INVESTMENT CHARACTERISTICS

Term: 3yrs

Asset Value: $30m

Forecast Yield: Quarterly coupon, CPI adjusted

LVR: 67%

INVESTMENT THESIS

  • Senior secured all assets charge over privately owned consumer goods retailer and finance provider.
  • Volume based business spreading risk across >17,000 asset-backed loans with 18-24 months durations.
  • Track record of strong debtor management and internally built credit assessment software supporting sustainable arrears metrics.
  • Material surplus cash flow if loan book was put into wind-down.

Agriculture and Water

Rights Equity Strategy

INVESTMENT CHARACTERISTICS

Term: 10yrs

Asset Value: $25m

Forecast Yield: 5%p.a

LVR: Unlevered

INVESTMENT THESIS

  • Purchasing dairy farmland and water rights during a structural downturn, converting to organic cropping land for long-term capital growth.
  • Target Portfolio: 6,000ha Land & 160,000ML Water.
  • Strategy to redevelop farmland to generate yield from high-value cropping rotations and water trading, proven through the manager’s existing fund.
  • Financial feasibility supported by in place seasonal crop off-take agreements.

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