Our Fund

We are delighted to discuss an opportunity for Investor to provide opportunistic funding for foreign resident borrowers buying real property in Australia. 

The fund will lend exclusively to foreign resident borrowers at a rate of 6.75%. This is because only a maximum of 20% of the funds capital will be taken through individual investors (Junior Notes) and the balance will be funded through institutional investors (Senior Notes), creating a blended rate of 6.75% It is proposed to establish a special purpose unit trust as a lending vehicle. Investor would provide subordinated debt of up AUD$100 million, with up to AUD $400 million Senior Bank Notes in this way.

The unit trust would attend to all of the requirements of the loans including originating, credit checking, documentation and loan administration. The unit trust would cover the costs of these requirements out of the gross interest received from the end borrowers. This means the 8%pa return to Investor would be free of the above costs.

This means the 8%pa return to Investor would be free of the above costs. The unit trust would be exposed to defaults and this exposure could reduce the return. However, traditionally defaults on loans of the proposed type in the Australian market have been very low ie less than 20bpts per annum. It is proposed to establish a special purpose unit trust as a lending vehicle.

VCFA Fund at a Glance