Pooled fund allows access to booming non-bank lending market
Supra Capital has launched a pooled fund, offering wholesale investors an alternative option for investing in Australia’s booming non-bank lending market.
The pooled fund will sit alongside Supra Capital’s contributory funds and, like those, generate returns for investors though loans for the purchase, refinance, investment and development of Australian real estate. However, the pooled fund offers investors the option of a more passive and diversified investment opportunity.
The Supra Capital First Mortgage Fund was initially seeded with units in SPVs with 20 existing loans; all secured by first mortgages, of which 80 per cent provided land funding and the balance, construction funding.
These loans are secured by property across the eastern seaboard; in capital cities and major regional markets. Supra Capital has offices both in Queensland and Victoria.
According to the manager, which is dealing direct with potential investors, the targeted return for the pooled fund is currently seven per cent per annum, which will change over time based on fund performance and market conditions.
Supra Capital First Mortgage Fund
Supra Capital managing director, Adriana Zuccala, said the pooled fund would only make loans to such borrowers and in such circumstances that meet its investment criteria.
“Supra is an experienced real estate debt manager,” she added.
“The company has a solid heritage, originating from CGA Bryson and subsequently the Bryson Group, which has specialised in property development, investment and funds management since the 1990s, over time constructing an impressive portfolio of projects and leading to the foundation of Supra Capital,” according to the executive.
The pooled fund will provide loans via special purpose vehicles (SPVs) secured by first ranking registered mortgages.
The blended loan to value ratio won’t exceed 70pc, with the current weighted average LVR at 59pc.
Other risk mitigation includes that no loan will represent more than 15pc of the fund and no borrower will be provided with loans totaling more than 15pc of the fund (story continues below).
“All money received from investors will be pooled together and invested collectively, and applied by the trustee for the making of loans through the SPVs, with interest distributed quarterly” Ms Zuccala said.
Track record
The trustee and its related parties co-invest in the pooled fund, Ms Zuccala said.
Since inception, Supra Capital has originated some 100 loans totaling over c$600m and has co-invested in all those.
“Supra Capital has a successful track record of delivering finance opportunities to sophisticated investors and an exemplary track record of capital preservation,” according to Ms Zuccala.
“We move quickly across the investment landscape to provide high quality real estate borrowers with flexible, timely and tailored finance solutions,” she added.
“Our collaborative approach ensures that investment projects are brought to life.
“Our mantra of only lending to quality developers directly or via quality introducers, with quality sites and quality exit strategies, is clearly evidenced by our robust filtering process where historically only five per cent of applications we receive translate to investment opportunities”.
Impression, top, of an Essendon project funded by Supra.
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