The amount you wish to invest in the Fund is your ‘Capital Commitment’. On application (completion of application form) you will need to provide 20% of your Capital Commitment as a deposit.

As the Fund finds suitable investments, you will be issued a Capital Call.  A Capital Call is a notice in writing that outlines how much of your remaining 80% investment you need to transfer to the Fund and by when. The Fund is required to give you at least 10 business days’ notice, but will give you as much notice as possible about potential upcoming Capital Calls.

While it is likely that dividends will be distributed to investors, there are no guaranteed dividends over the term of the Fund.  Whilst there could be dividends received from Investee Companies, the investment focus of the Fund is capital growth over the medium term. If dividends are distributed to investors during the Fund term, they will more likely be distributed in the last 3 years of the Fund.

The nature of investment in a venture capital fund is that a portion, or all, of the capital invested could potentially be lost. This is despite the exhaustive and rigorous investment process to be adhered to by the Fund Managers, their levels of experience and their measurement of, and mitigation of, identified risks.

The Fund Term is 6 years from First Closing Date with the Manager having the option to extend (for Investor benefit) for 5 additional terms of 12 months, so the investment should be viewed as medium to long term. The Fund term would only be extended beyond 6 years if the Manager believed it was in the best interests of the Investors.

The Fund Manager is aiming to provide Investors with a return of 25% per annum on Capital Contributions. It should be understood however, that this form of investment has inherent risks and subsequently estimating the exact returns is extremely difficult. Returns are unpredictable and not guaranteed.

The Fund will specifically target rapidly growing or high potential businesses that are developing and/or providing products and/or services to residential real estate agencies. Businesses targeted will be in the ‘early expansion’ or ‘expansion’ stage which the Manager has identified would substantially benefit from the expertise and network of the Manager, as well as the capital injection of the Fund. Business categories could include, but are not limited to, property maintenance & compliance, technology, transactional services, financial services, and outsourcing services.

All final investment decisions will be made by the Manager in adhering to the outlined ‘Investment Plan’, without reference to Investors for qualification on decisions. The sourcing of and decisions on investments will however be done with reference to the Advisory and Investment Committees. The fund is likely to have many strategic investors who can offer a range of assistance to the Manager throughout the course of the fund term. The Manager is likely to seek advice from these parties, however there is no obligation for the Manager to do so.

Please see Appendix 2 for information on Tax.

The preferred structure of a venture capital firm within Australia is the ESVCLP structure. Where possible the Fund will make investments through the ESVCLP structure to take advantage of the tax benefits that the structure provides.

On occasion, the Manager might identify an opportunity for investment which does not qualify as an Eligible ESVCLP Investment. In this circumstance the investment will be made through the Trust structure.

Yes, in most cases you will find that the investment is a qualifying investment under the terms of your Self-Managed Superannuation Fund. Please seek your own advice through your Financial Advisor on this.

The specified target for the Fund is $20M however the Manager reserves the right to accept more or less at their discretion. The Manager has however established $10M as the amount for ‘First Close’ for the Fund. The Fund Manager can accept investments for up to 30 business days after First Close however, any further investment accepted beyond this will be subject to financial penalties.

The Fund Manager is confident that the target investment amount of $20M will be raised.

Complete an ‘Application Form and Subscription Deed’ as well as provide a deposit of 20% of your Capital Commitment.

Following application, the Manager has to accept the admission of an Investor. The Manager reserves the right to reject applications as they see fit. Admission will happen on First Closing date or within 30 days of same.

All final investment decisions will be made by the Manager in adhering to a set ‘Investment Plan’. The sourcing of and decisions on investments will however be done with reference to the Advisory and Investment Committees. The committees will include experts in their fields, including very well respected and experienced Australian Real Estate Industry Professionals. The Investment Plan includes a rigorous and thorough due diligence process and commitment to adhere to investing only in ventures aligned to investment criteria.

The Due Diligence process will involve both ‘internal’ and ‘external’ components. The internal process is the commercial due diligence conducted by the Manager – a rigorous process of collating sufficient and exhaustive commercial information on the subject venture (financial, strategic, product, key personnel etc) to enable analysis and qualification for investment. This process will be supplemented by external due diligence which will be conducted by qualified, independent professionals in relation to legal, accounting, technical and commercial. It should be noted that to avoid unnecessary costs, external due diligence will not be conducted before a thorough internal due diligence is at least commenced and analysis is sufficient to suggest cost and process of external due diligence is warranted.

The Manager will provide quarterly updates to Investors during the term of the Fund.

If you want to sell your Fund Interest during the term of the Fund, then you must negotiate the terms of the transfer of the Fund Interest with the transferee. However, you should note that any transfer must be accompanied by an Application from the new Investor, and the Manager has the discretion to refuse an application and/or approve or refuse a transfer of a Fund Interest.

The Manager will receive a Management Fee of 2% per annum (exclusive of GST) of the total Capital Commitment of the Fund. It is calculated and paid quarterly in advance.

The Manager will also be entitled to receive a performance fee as outlined in the Information Memorandum. The performance fee will only trigger should the performance of the Fund as a whole exceed its ‘performance hurdle’ of 8% per annum before tax. The fee will be payable only once all Investors have received their Capital Commitment plus a distribution equal to the performance hurdle. The Manager will receive 20% of the balance of proceeds as their performance fee, with the 80% going to Investors.

The Manager is entitled to a one-off establishment fee of $275,000 (GST exclusive) for the costs incurred for the formation of the Fund, the Partnership and Trust and raising the capital.

On an ongoing basis, the Manager is entitled to the reimbursement of any ‘Outgoings’. Outgoings are expenses incurred in relation to the proper performance of the Manager’s duties in relation to the Fund. This could include, but is not limited to all administration, accounting, audit, legal, valuation, insurance, tax and custodial costs, and any expenses incurred in considering whether to undertake an investment.