INVESTORS

UNDERSTANDING YOUR ALTERNATIVE INVESTMENT OPTIONS

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Our
Investors

Understanding
Real Estate Debt

As an alternative investment manager PropertyShares provide fixed income assets to investors seeking exposure to real estate debt investments. After wining a Westpac Innovation Challenge award (2014) and Westpac 200 Business of Tomorrow Award in 2017 and 2018, PropertyShares has gone on to become one of the most prominent real estate debt platforms in Australia.

Since our inception in 2014, we have adhered to a disciplined investment philosophy that focuses on delivering compelling risk-adjusted investment returns. We strive to maintain a consistent credit-based approach in targeting well-structured investments in high quality businesses and real estate assets.

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INVESTMENT
MANAGEMENT

Understanding
YOUR RISKS

With strong foundations in credit risk and financial services, the PropertyShares team has developed a rigorous credit selection process. This centres around banking credit practices, that are rooted in statistical techniques based on robust data. With a key focus on risk management, compliance and control systems our consistent approach has delivered a stable track record.

PropertyShares will source investments and price opportunities based on return and risk profiles. Allowing us to generally identify investment opportunities for consideration by investors which aim to generate the following returns:

TYPES OF SELECT INVESTMENTS Target Returns (Per Annum)
FIRST MORTAGE DEBT 8 - 12%
SECOND MORTAGE DEBT 12 - 18%
MEZZANINE FINANCE Minimum 18%

FUND
FACTS

PROPERTYSHARES HAS A
TRACK RECORD OF
DELIVERING ON
INVESTMENT STRATEGIES
FOR OUR STAKEHOLDERS
Target Return Profile 8 - 18% p.a.
Investment Horizon 6 - 24 months
Minimum Investment $10,000.00
Distributions Monthly, Quarterly, Annually, At Maturity
Performance Fee Nil
Security First Registered Mortgages, Second Mortgages, Mezzanine Finance
Platform Availability Seamless integration on all leading platforms

Growth of an
Asset Class

Private real estate debt has become a staple of any portfolio, and the developing size of the private debt market makes it impossible to ignore. These assets are part of a broader fixed income strategy, without replacing traditional bonds. Private debt helps capture additional premiums and other correlations that traditional fixed income cannot offer. Making it all the more essential in a diversified portfolio that it is not strongly correlated to traditional assets.

DIVERSIFICATION

Private real estate debt plays a critical role as a portfolio diversifier given the potential to generate alpha or abovemarket returns. The ability to allocate capital across a range of loans optimises predictability in loan performance and, hence, mitigates single loan risk exposure.

CORRELATION

Low correlation with other asset classes: Given the nature of senior lending and debt activity, private debt usually has a lower correlation to equities than traditional fixed income.

PREDICTABLE INCOME

A key advantage of real estate debt is that it delivers a steady, high yielding income to investors. In an ultralow yield investment environment distributions that can average around 8% on an annualized basis are considered look highly attractive.

PRIORITY IN THE CAPITAL STACK

By issuing senior debt, direct lending funds take priority to other forms of financing such as; mezzanine loans, preferred equity or equity. Debt investing differs from equity in many ways, debt focuses on mitigating risk at every turn in order to maximise the probability of earning a fixed rate of return and receiving targeted interest returns. The real distinction is that debt investment is backed by a hard asset as collateral. When designing a real estate investment strategy, allocating the portfolio to an income-oriented product that is senior to all other positions in a capital stack is an excellent diversification tool.

The transition away from bank financing represents a permanent structural shift, and private real estate debt will gradually become a mainstream investment for many investors.

Advantages to
Real Estate Debt

INVESTING IN THE DEBT
LAYER OF THE CAPITAL STACK
OFFERS INVESTORS SEVERAL
ADVANTAGES INCLUDING

Income
Downside Protection
Capital Preservation
Reduced Volatility
Low Correlation to
Core Equality Real Estate
Access to Geographical
Locations That Cannot Be
Achieved Via Equity

Asset Types

ASSET TYPES INCLUDE THE
FOLLOWING AND ARE
GEOGRAPHICALLY AVAILABLE
ACROSS AUSTRALIA

Residential Developments
Commercial Property
Industrial Property
Retail Lots
Development Sites
Land Subdivision