An Alternative to Low Savings Products Offered by Banks
Investors are increasingly seeking returns that are better than inflation and better than the rates paid by banks on fixed term deposits and savings account balances.
Although not a bank, Angas Prime is a pooled mortgage fund managed by Angas Securities. Investments are secured by first registered mortgages over a pool of properties and borrowers. The following are some of the factors that intending investors may have regard to:-
1. The track record of the management team
Angas Securities was established decades ago. The team who operate Angas Prime are well qualified, with vast experience of managing a commercial loan portfolio through the peaks and troughs of the economic cycle.
2. Scheme borrowings
Angas Prime has no external borrowings beyond the funds contributed by its own investors. There is no external leverage or exposure. Investor funds are represented by cash at bank or first mortgage loans. That is all.
Investments in Angas Prime are made for twelve-month terms. The Angas Securities Board monitors liquidity projections on a monthly basis. There is no entitlement for investors to early withdrawal. Requests will be considered. Angas Prime can delay a withdrawal by up to a further twelve months, however all withdrawals requested at maturity have to date been met since Angas Securities became Responsible Entity of the Fund in 2010.
Angas Prime obtains an independent valuation for all security taken for loans of over $500,000, with loans under that limit being very rare. Independent lawyers and quantity surveyors (if applicable) are engaged. All loan assessments are made at arm's length and there are rigorous procedures in place dealing with any conflicts of interest.
5. No related party loans
Angas Prime staff and management may contribute funds to the investment pool and they often do. They have "skin in the game" alongside external investors. However, under no circumstances will Angas Prime funds be advanced by loan to management or staff. Such related party loans are absolutely forbidden.
6. Level of return
Enduring mortgage loan portfolios are a successful balance of risk versus reward. The commercial property market will deliver a certain level of return. Anything more will require a risk exposure that a prudent manager like Angas Prime will not embrace.
7. Rising interest rates
The Board of Angas Securities reviews the Angas Prime Target Rate each quarter. The Board is mindful of the appetite of investors for higher returns. However, higher interest rates may put borrowers under pressure which can be counterproductive.
8. Withdrawals and return of capital
Angas Prime investments are for a fixed term which enable funds to be advanced to borrowers for a fixed term as well. The nature of this "back to back" investment approach enables Angas Prime to offer attractive rates of return for its investors.
Angas Prime seeks to hold a portfolio of loan assets advanced to a range of different borrowers based in different geographic regions of Australia. This is central to the management of risk by Angas Prime, noting that long standing relationships with individual borrowers or introducers means that some degree of concentration will be present in the loan book from time to time.
Read the Product Disclosure Statement (PDS) and the Target Market Determination (TMD) carefully and consider whether Angas Prime could be a valuable component of your investment portfolio.BACK