The Tycoon Real Income Fund is a registered managed investment scheme open to retail investors. Before investing you should read the Product Disclosure Statement and the Target Market Determination in full and consider whether the fund is right for you.
At a glance
- Target return
- RBA cash rate plus 3% per annum gross, net of fees, for a 12 month investment term. A target only, not a forecast, and not guaranteed.
- Distributions
- Monthly, paid within 14 business days after the end of each month
- Minimum investment
- $10,000, then additional amounts in lots of $5,000
- Investment terms
- 12, 24 or 36 months
- Lock up
- 12 months from the date of each investment
- Unit price
- $1.00 per unit
- Responsible entity
- Primary Securities Ltd ACN 089 812 635, AFSL 224107
- Fund manager
- PLACEHOLDER: manager entity name subject to decision 3
- Custodian
- Equity Trustees Limited ACN 004 031 298
- Administrator
- NAV Fund Services (Australia) Pty Ltd ACN 652 217 822
- Risk level
- Medium to high
Where your money goes.
Money invested in the fund is lent to a special purpose lending vehicle within the TY Capital Group. That vehicle makes loans to approved Australian business borrowers, and the interest those borrowers pay is what funds your monthly distribution.
Every loan is secured. Security takes one of four forms, and the mix is managed to targets set out in the Product Disclosure Statement.
| Security type | What it means |
|---|---|
| Real estate security | Loans secured by first, second or subsequent registered mortgages over Australian real estate |
| PPSR registered assets | Loans secured against business assets such as machinery, vehicles and commercial equipment, registered on the Personal Property Securities Register |
| Cash flow backed debt | Loans supported by recurring revenue or legally enforceable future inflows such as contracted receipts, grants or committed capital |
| Fixed income instruments | Australian and global government and corporate fixed income, and related instruments |
Lending is concentrated in New South Wales and Victoria, with limited exposure to the rest of Australia. All lending is for business or investment purposes. The fund does not make consumer loans and does not lend to individuals.
The limits we lend within.
Loan to value ratio is the loan amount as a percentage of the independently assessed value of the security. Lower ratios mean more equity sitting beneath our position.
| Security type | Maximum loan to value ratio |
|---|---|
| Residential | 80% |
| Commercial | 75% |
| Industrial | 75% |
| Development | 80% |
| Land banking | 70% |
| Rural | 65% |
| PPSR assets | 100% |
The general limit applied by the fund manager for mortgage secured lending is 75%. For property development, lending does not exceed 70% of the as if complete valuation. All valuations are prepared by independent licensed valuers selected from a panel, and must be no more than six months old at the time a loan is made or renewed.
Fees
| Fee | Amount |
|---|---|
| Fund manager fee | 1.81% of net asset value, including GST, paid monthly from the fund |
| Responsible entity fee | 0.132% per annum of net asset value up to $50 million, or $2,750 per month, whichever is greater. 0.066% above $50 million |
| Administration fee | 0.066% per annum of net asset value up to $50 million, or $2,200 per month, whichever is greater. 0.033% above $50 million |
| Application fee | Nil |
| Contribution fee | Nil |
| Withdrawal fee | Nil, unless withdrawing early |
| Early withdrawal fee | 1.10% including GST of the amount withdrawn |
| Transfer fee | $302.50 including GST |
Worked example: on a balance of $50,000 held for a full year, total ongoing fees are approximately $1,004 including GST. The Product Disclosure Statement sets out the full fee table, including fees paid by borrowers rather than by investors.
What can go wrong.
This is a medium to high risk investment. Returns are not assured and you can lose some or all of your capital. The Product Disclosure Statement sets out the full list of risks. These are the ones that matter most.
- Borrower default. Borrowers may fail to make repayments, which can delay or reduce your distributions and your capital. At times the proportion of loans in arrears may be significant.
- Valuation risk. A valuation may not reflect what a property would actually sell for, particularly if the market moves after the valuation is taken.
- Liquidity. The fund is illiquid. There is a twelve month lock up, there is no secondary market for units, and withdrawal is at the discretion of the responsible entity.
- Concentration. Lending is concentrated in New South Wales and Victoria, and a single borrower may represent a large share of the fund while it is small.
- Second and subsequent mortgages. Where the fund lends behind a first mortgagee, it may recover little or nothing if that first mortgagee enforces its security.
- No operating history. The fund is newly established.
[PLACEHOLDER] Compliance approved retail disclaimer for this page. Must reference the PDS and TMD by name, state that the target return is a target only, and state that investors can lose capital.