Private Loan Income Fund

Diversified exposure to our best private loan opportunities, backed by mortgages over Australian property.
With a maximum of 65% LVR on the portfolio, investors' capital is significantly shielded from property market movements.
AVARI are experts in sourcing loans offering higher risk adjusted returns.

Diversified exposure to our best private loan opportunities, backed by mortgages over Australian property. With a maximum of 65% LVR on the portfolio, investors' capital is significantly shielded from property market movements. AVARI are experts in sourcing loans offering higher risk adjusted returns.

9%pa
Income Target

Monthly Distribution

Open Ended Fund

Backed by Mortgage Security

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* Wholesale Investors only

FUND HIGHLIGHTS

STRUCTURE

Australian Wholesale Unit Trust

TOTAL TARGET RETURN

9% p.a. (Net of Fees)

DISTRIBUTION

Monthly

FUND TERMS

Open Ended

ELIGIBILITY

Wholesale Investors Only

MINIMUM INVESTMENT

$50,000

REDEPTION REQUESTS

After 18 Months

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* Wholesale Investors only

Why Invest with AVARI

AVARI has been active in the private lending space since 2015 and has a track record of not having made a loss on a loan investment. Unlike most private lenders, AVARI are also property equity investors,managing over $1 bilion in assets on behalf of their investors and have completed a number of residential and commercial construction projects, refurbishment, leasing and sales.

AVARI's key strengths:

Access to deals

AVARI's knowledge and experience in lending and in acquiring and managing real estate assets in the Australian market gives them broad access to deals. For example,a lending deal can arise from an initial purchase discussion and vice versa. Given its track record and established relationships in the market, AVARI is an active player and often receives referrals from brokers, bankers and institutional investors.

In-house property team

Unlike most fund managers, AVARI has a full in-house property team which includes architects, analysts, project managers, interior designers and internal sales/leasing. This allows the AVARI team to look at lending deals differently- rather than simply assessing ratios and pre- sales. AVARI looks at the asset from an equity investor's perspective and determines the feasibility and the probability of the borrower achieving a positive outcome. In the event of a loan default, AVARI can easily step in to complete a project rather than trying to sell an asset during the construction or development phase. The team also allows AVARI to look at loan deals through a property investor's lens.

Capital Preservation

AVARI's property market knowledge allows fast and efficient due diligence. AVARI has a deep understanding of how to acquire and manage asset and complete a development. AVARI's experience in property development allows its team to analyse loan deals to identify potential isues that may arise during development to ensure a positive outcome.

Deal Size

AVARI is not limited by deal sizes. With reliable funding sources from institutional investors, AVARI can originate deals that are usually beyond the investment size offered by a standard private lender.

Flexible approach to deals

AVARI seeks to contribute to the borrower's success by sharing its in-house property expertise, including advice on asset management, development, leasing and sales. This also allows AVARI to access deals which may not be available to a standard private lender.

Alignment of Manager

AVARI and its staff will invest in the Fund in the same class of units as as investors to align interests.

Communication

AVARI prides itself on its communication. Investors will be kept up to date regarding loans in the Fund's portfolio on a monthly basis.

Our Management

ALAN LIAO

Chief Investment Officer

  • 15+ years' experience in financial market and capital management
  • Total deals over $1 billion
  • Experienced in investment sourcing, portfolio management and property development

MARGARET LI

Chief Executive Officer

  • Chartered Accountant
  • 20+ years' experience in fund management and properties-related financial control
  • Former Group Finance Manager at Vicinity Centres in charge of $22 billion REITs

TERENCE LAI

Head of Property

  • Registered architect with NSW architects board
  • 20+ years' experience in residential, commercial and industrial development
  • $2 billion worth of projects delivered to date

SIMON RIORDAN

Head of Distribution

  • 20+ years' experience across equities, derivatives, fixed income and property
  • Former senior investment and advisory professional from Macquarie Bank, AMP, CBA and Westpac
  • For information regarding AVARI Funds please call 0411 087 408 or email (simon.riordan@avaricapitalpartners.com.au)

ROBERT PUZZOLO

Head of Sales and Leasing

  • Licensed Real Estate Agent
  • 25+ years experience across established real estate, off-the-plan prestige property sales, building, land sales, and network management.
  • For more information regarding current Sales and Leasing opportunities call 0421 440 556 or email (Robert.puzzolo@avaricapitalpartners.com.au)

RISKS

The fund is invested in mortgages backed by individual property assets throughout Australia, these assets are subject to general property market risks and may fall in value which could result in loss of capital for loan investments. Investments are subject to minimum 18 month investment period and the Fund’s income and capital are not guaranteed.

How We Assess Loans

Avari’s in-house property team and experience in buying, owning, developing and managing a range of property transactions gives them an advantage in being able to identify good quality loans. Avari manage over $1bn in assets across Australia and have deep connections within the market to source loans. Avari assess deals from the perspective of property investors as opposed to traditional lenders and will only fund opportunities they would be comfortable owning and managing.

PROJECT DUE DILIGENCE
· Project exit strategy
· Cashflow forecast
· Business plan; sales, rental, construction & development
· Market conditions for sales & leasing
· Technical construction condistions
CREDIT REVIEW
· Test probability of project reaching key milestones or exit
· Stress test pre-sales level and price
· Test income for debt serviceability
· Identify project risk factors that may trigger default
· Design control methods for each risk factor
BORROWER REVIEW
· The Fund assesses the background of the borrower; track record, credit history, gearing status, and financial condition of the group or related parties.
· Test the capability of the borrower in delivering the project business plan and loan repayment.
SECURITY REVIEW
· Assess and stress test he security value and LVR
· Test gearing level in different stages and recoverable value
· Assess 1st mortgage holder's rights and impact on loan in case of default
RISK CONTROL MEASURES
· Limits on additional borrowing
· Manager must approval any major spending, including paying debt
· Step-in rights to Manager to complete project in case of default
· Conservative LVR
· Engage third party values
· Borrower to meet definied conditions/ milestones
LOAN TERM FORMULATION
· Post DD final terms offered; amounts, term, repayment schedule
· Review title, planning, zoning etc
· Legal review of leases, incentive agreements, OC rules & sales contracts
· Technical reports; electrical, fire, structure or other specialists

Types of loans

Borrowers in the commercial real estate market in Australia are in the business of the development, investment, acquisition or improvement of real estate. Borrowers pledge security of the real estate to the lender, meaning in case of default the lender can sell the asset to recoup their loan.
Typical loans include:

Land Loan

Land loan - secured against vacant land which is to be developed. Generally, the land will be zoned for residential or commercial development and the borrower requires capital to settle the land and apply for a development application.

Construction Loan

Construction loan - for commercial or residential construction, secured against the land and the future construction. Funds are generally drawn down gradually to meet construction costs.

Commercial Loan

Commercial loan - for acquisition/refinance of an office or industrial asset.

Residual Stock Loan

Residual stock loan - loan secured against completed residential development where apartments or houses remain unsold.loan is generally paid back as remaining stock is sold.

Bridging Loan

Bridging loan - Short term loan to assist borrower to obtain another finance arrangement or to sell the asset.

Process of development from land to completed asset and loans that apply

Unzoned Land
Zoned Land
DA Approved Land
Land Under
Construction/
Development
Improved Land
Land Loans
Construction Loans
Investment Loans

Types of Security

First Mortgage

Second Mortgage

Tranches of First Mortgage

Other Security

Lender has first right to any sale proceeds,this is the lowest risk lending option. In case of default the lender can sell the asset to recoup thei loan.

About AVARI

AVARI Capital Partners is a value-add real estate investment specialist, managing over $1bn AUM. We have a fully integrated property team including architects, project managers, tenant managers, interior designers and development managers. This allows us to move quickly and capitalise on projects when others can’t. We invest our own capital alongside our clients in every deal. Supported by local advisers, offshore clients, international hedge funds and investment banks.

Disclaimer
This document has been prepared by Avari Capital Partners Pty Ltd (ABN 86 626 245 172) [an affiliate of Avari Holdings Pty Ltd (ABN 88 603 200 648, AFSL 472222), formerly known as Acer Capital] for information purposes only. The information is only directed at investors who are wholesale investors or professional investors pursuant to the Corporations Act 2001 (Cth). This is not an offer to sell or a solicitation or an offer to subscribe or purchase or a recommendation of any securities referred to herein and the information has not taken into account any potential investors’ personal objectives, financial situation or needs. Before investing, you should consider your own objectives, financial situation and needs or you should obtain financial, legal and/or taxation advice. The financial forecast and forward-looking statements contained in this document are not guarantees or predictions of future performance and involve known and unknown risks and uncertainties and other factors, many of which are beyond the control of Avari. Avari does not give any assurances that the results, performance or achievements expressed or implied will actually occur.