The Atlas Capital Property Credit Income Fund (Fund) is an unregistered managed investment scheme under the Corporations Act 2001 (Cth). The disclosure documents of the Fund, consisting of the Information Memorandum (IM) and the Supplementary Information Memorandums for specific Classes of the Fund (SIMs), are prepared jointly by Atlas Capital, the Investment Manager of the Fund, the lawyer engaged by Atlas Capital and Specialised Investment and Lending Corporation Pty Ltd ACN 149 520 918 AFSL No. 407100 (SILC), the Trustee of the Fund.
The purpose of this “Investor Frequently Asked Questions and Answers” brochure is to provide general information regarding the Fund to prospect investors with limited knowledge on the regulatory and management framework in which the Fund operates. Investors must read IM and the SIM for the Class they invest in in full before making any investment. with specific reference to the Atlas Capital Property Credit Income Fund.
What is the underlying investment and key features of the Fund?
The Fund aims to provide risk-adjusted and attractive income returns to investors via investing in loans made to special purpose vehicles (SPVs) which are related entities or associates of Atlas Capital or other borrowers carefully selected by Atlas Capital to fund property projects, such as land development, commercial and residential property developments, in Australia. The Fund will have multiple Classes. Each Class will either be in relation to a specific loan or a pool of loans.
Each Class will have a target fixed return. Please note that the target fixed return is not guaranteed. The Fund may not be successful in meeting this objective.
What is the structure of the Fund?
The Fund is an unregistered multi-class unit trust governed by Australian law. The structure of the Fund is demonstrated in the diagram set out below:
Is an Australian Financial Services Licence (AFSL) required to manage the Fund?
Yes. An AFSL issued by the Australian Securities and Investments Commission (ASIC) is required to manage a managed investment scheme such as the Fund. The AFSL held by SILC allows it to act as Trustee for the Fund. Atlas Capital is the corporate authorised representative of SILC, which means that Atlas Capital may manage the Fund in accordance with the authorisations under SILC’s AFSL.
What functions does SILC perform? How are the investors’ funds monitored and protected from fraudulent and unauthorised transactions?
SILC as Trustee for the Fund is a Melbourne-based professional third-party trustee services provider. SILC will hold and administer the assets of the Fund for the benefit of the investors. . It will also be responsible for the enforcement of Loans if the borrowers are in default.
SILC’s responsibilities as the Fund’s Trustee include but not limited to reviewing and approval of the Fund’s lending programs and ensures that investment selection and lending process is adhered as prescribed in the Information Memorandum and enforcing the Loans against the borrowers if they are in default.
Each Class of the Fund may have multiple investors, who have exposure to the underlying Loans and will be segregated to ensure that losses and gains from one Class is not shared with other Classes. The Trustee will be working closely with the Investment Manager to manage the Fund.
What return can investor expect from the Atlas Property Credit Income Fund?
Each Class of the Fund has a different target fixed return which are net of fees and expenses but before tax. Please note that this is not a promise or a forecast of future returns. Neither the Trustee nor the Investment Manager guarantees any returns.
Please refer to the relevant SIM for the target fixed return of the Class that you may be interested in investing in.
What are the risks of the Atlas Capital Property Credit Income Fund?
The major risk of investing in the Fund are as follows:
- default and credit risk - a borrower under a Loan may not be able to pay principal and interest payments due under the Loan;
- security enforcement risks - even the Loans may be secured by a first ranking registered mortgage over real estate and other forms of security, there is still a risk that the sale of the security would not be sufficient to cover capital and income repayment obligations to investors or that the sale of the security would take a significant amount of time. Atlas Capital seeks to use its best endeavours to mitigate the repayment default risk with respect to the Loans provided by the Fund by：
- assessing creditworthiness of the borrowers and the terms of the loans in accordance with its lending strategy which includes a loan-to-value (LVR) requirement and the in-depth understanding of the development projects to be carried out by the borrowers;
- ensuring that first mortgages are registered over the development
- ensuring that the general security agreement granted over all assets and undertakings of the borrower is provided.
The risk level varies depending on the type and stage of the development project. However, a sound development project of which the developer has in-depth property development experiences, is well capitalised, has strong cash flow disciplines, has accurate asset value in light of the prevailing market condition with a potential of growth or development would usually pass our tests.
Please refer to the IM for further information on the risks associated with investing in the Fund.
How do I invest in the Fund?
An investor may be required to make investment by way of Commitment. The Commitment is an investor’s binding agreement with the Trustee to subscribe for Units to a specified dollar amount and against which capital calls made by the Trustee. On application, 5% of the total Commitment amount will be called as a deposit. The remainder of the Commitment will be called on or before the closing date for the issue of a Class of Units which is specified in the relevant SIM. If further calls on Commitments are not paid, the deposit and Units issued on the initial call will be forfeited.
Once an applicant has paid the deposit, they will be issued 5% of the total Units they subscribe for at the current applicable issue price in accordance with the terms set out in the relevant SIM. If further Commitments are not paid, the initial call (deposit) will be forfeited.
The minimum Commitment amount for each class of Units is $500,000. The Trustee has absolute discretion to accept applications for lesser amounts.
How long am I required to stay invested in the Fund?
The Fund invests in Loans to fund property development projects. The term of a Loan is generally 1-2 years. An investor’s ability to withdraw from the Fund will depend upon the Class of Units held by the investor and will be outlined in the relevant SIM. The Minimum Investment Period or Investment Term of a Class will be set out in the relevant SIM. Generally, Investors will not be able to withdraw their Units in a Class prior to the end of the Minimum Investment Period or the Investment Term for the specific Class that they invest in. An early redemption fee will apply to an early withdrawal/redemption that is approved.
Will fees charged to investors of the Fund?
Like most funds in similar nature to the Atlas Capital Property Credit Income Fund, fees will be charged by SILC as Trustee and Atlas Capita as the Investment Manager of the Fund. Please refer to the IM for further details with respect to the fees. Please note that all returns have been quoted net of fees and ordinary expenses of the Fund.
Who can invest in the Fund?
The Fund is designed for:
- persons (including entity) that invest more than $500,000 in the Fund;
- wholesale investors, being persons or the persons or enties :
- that have obtained a qualified accountant’s certificate within the preceding six months stating that they:
- have net assets of at least $2.5 million, or
- have a gross income for each of the last two financial years of at least $250,000; or
- professional investors which include AFSL holders, superannuation funds persons who have or control more than $10 million of gross assets and listed entities or a related body corporate of listed entities.
This brochure is prepared by Atlas Capital Management Pty Limited ACN 633 175 523, the Investment Manager of the Atlas Capital Property Credit Income Fund (Fund) and the authorised representative of Corporate Authorized Representative of Specialised Investment and Lending Corporation Pty Ltd ACN 87 149 520 918, AFSL No 407100 (SILC) as Trustee for the Fund, for information purpose only and does not constitute an offer, solicitation or recommendation to invest in the Fund. The information contained herein is not intended to constitute investment advice, nor should it be construed in any way as tax, accounting or legal advice. Before making the decision of investing in the Fund, you should read the Fund’s disclosure documents, being the Information Memorandum (IM) and the Supplementary Information Memorandum of the Class you are interested in investing in (SIM), in full and carefully evaluate whether investing in the Fund is appropriate for you in light of your experience, objectives, financial situations and other relevant circumstances. In the event of any inconsistency between this brochure and the IM and/or any SIM, the IM and SIM shall prevail. SILC has consented to the inclusion and publication of general commentary, fund updates and references to itself.