Delivering Value to Private Investors
Angas Prime conducts business as a mortgage lender. The principal activities are to: -
- Raise funds from various sources but primarily direct from retail investors seeking regular return on capital.
- Source and process applications for mortgage loan advances according to prudential guidelines.
- Administer loans including collection of interest and principal, management of mortgage security and instructing solicitors, valuers and agents as required.
A typical loan is almost always in excess of $0.5 million. Angas Prime loans are strictly for business purposes and Angas Prime borrowers warrant that such is the case.
These borrowers are typically commercial operators with many years of experience dealing with commercial lenders and are well used to driving a commercial outcome.
Angas Prime is a first registered mortgage lender (no second mortgages). Typically, Angas Prime lends to borrowers for a term of one year with interest pre-paid for the term of the loan. This feature is important to enable borrowers time to bring their real estate product to the market. Loans will only be extended if the value of the security warrants such an extension and other conditions set by Angas Prime have been met.
Angas Prime strongly supports a regulated financial system. It is true that regulation involves cost, can restrict flexibility in many instances and can suppress innovation. But a licence to operate a financial services business is very valuable. Angas Prime could not operate as a commercial lender were it not for the rule of law.
Regulation provides a barrier to entry which benefits existing participants who have met the establishment and ongoing costs of compliance. The regulatory barriers to commencing a financial services business in 2023 are vastly greater than applied when Angas Securities was first established over 20 years ago.
A competitive financial system will deliver benefits for the broader community. Competition will deliver greater opportunities for both investors in financial products and consumers of the funds invested such as borrowers.
Angas Prime specialises in raising funds from the public for investment in first registered mortgage loans over real property. There remains strong demand for the funding of commercial property loans within the lending parameters that Angas Prime requires.
Borrowers who take out loans from Angas Prime are often those who do not deal with traditional lenders such as banks or who may not meet the lending criteria of such lenders. Business proprietors, self-employed borrowers or investors in property that does not generate income are amongst the class of typical Angas Prime borrowers.
As an asset-based lender, Angas Prime places primary reliance on the first mortgage security that is held. Angas Prime can and does sell that security to obtain recovery of loan advances if a borrower defaults. This is done by Angas Prime acting as mortgagee exercising power of sale.
Angas Securities holds AFSL number 232479 issued by ASIC to act as the responsible entity of Angas Prime. As an AFSL holder, Angas Securities must meet all legislative requirements including those as to capital and reporting.
Angas Prime selects a range of securities and sets the loan to value ratio for each security. The Board of Directors determines the tolerance for risk of Angas Prime after taking into account the strategic objectives of the Fund and other factors including investor expectations. Angas Prime is responsible for ensuring material risks have been identified and appropriate and adequate control monitoring mechanisms and reporting are in place. Angas Prime’s management is required to analyse the business risk in the context of Board expectations, as well as specific business objectives and risk tolerance.
Angas Securities offers investors financial products managed by a Board with complementary skills comprising one Executive Director and two Independent Directors. An appropriate management structure is composed of experienced personnel. Support is provided to management by way of additional resources from external consultants to enable a strict focus on the core business of Angas Prime. Financial risk is minimised though an audited statement of financial position. Appropriate operating controls, as well as a sound understanding of the legal and compliance environment in which Angas Prime operates, round out what Angas Securities can offer investors in Angas Prime.
Angas Prime provides investors with a target rate of return from a pool of loans secured by registered first mortgages. Investor monies are pooled together and invested collectively. Each investor has a proportionate share in the entire mortgage portfolio rather than a specific interest in any particular Angas Prime mortgage.
Angas Prime has a target rate. The ability to achieve this target rate is enhanced through a dedicated reserve account. This means that Angas Prime does not have to rely solely on borrower performance in order to meet its distributions to investors each month.