UNDERSTANDING YOUR ALTERNATIVE INVESTMENT OPTIONS
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.
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%|
|* Target returns are not guaranteed|
|Target Return Profile||8 - 18% p.a.*|
|Investment Horizon||6 - 24 months|
|Distributions||Monthly, Quarterly, Annually, At Maturity|
|Performance Fee||Nil - Please refer to the IM for a full outline of the fees associated with these investments. To request a copy of the IM please click here.|
|Security||First Registered Mortgages, Second Mortgages, Mezzanine Finance|
|Platform Availability||Seamless integration on all leading platforms|
|* Target returns are not guaranteed|
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.
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.
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.
A key advantage of real estate debt is that it can deliver 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.
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.
Please ensure you review the IM which includes a comprehensive outline of the possible risks associated with these investments. To request a copy of the IM please click here.
Low Correlation to
Core Equality Real Estate
Access to Geographical
Locations That Cannot Be
Achieved Via Equity
Please read the IM for further information
on the advantages and risks of real estate debt.