Real Estate Venture Capital Fund

For years, hundreds of small businesses in a range of industries have been providing essential products and services that allow real estate agencies to efficiently conduct their sales and property management businesses. Many of these businesses provide valuable products and services but lack the funding, business expertise and industry contacts to turn their small businesses into national and international organisations.

Those businesses that have become national organisations by providing services to the real estate industry have created significant value. Take for example realestate.com.au worth circa $8 billion, or Direct Connect the utilities connection business that sold for $70 million in 2015. These are just two examples of businesses that generate almost all of their revenue as a result of their relationships with real estate agencies.

There are many other businesses providing services to the industry that could be grown to similar valuations, especially if they had access to the collective knowledge and contacts of the very best operators in the Australian Real Estate Industry.

There is an opportunity to create significant value by providing the funding, business expertise, and industry contacts to help specially selected businesses grow to become national players.

This can be done utilising investment from inside the real estate industry before they are dominated by organisations from outside the industry.

To do this, PieLAB Venture Partners have launched the Real Estate Industry Venture Capital Fund, an investment fund that will invest in a portfolio of businesses that provide services to the Australian Real Estate Industry. The Fund will be managed by some of the industry’s leading experts and overseen by an advisory board elected by the investors who are the “who’s who” of the Australian residential real estate industry.

As an industry leader, you have the opportunity to invest in the Fund alongside the PieLAB management team and other industry leaders. By pooling both the resources and the combined customer base of investors we can significantly impact the value of the businesses the Fund invests in, create excellent returns for the investors and significant wealth for the founders.

KEY FUND METRICS


TOTAL FUND SIZE: $20 million

TARGET FUND RETURN: 25% per annum (IRR)

MINIMUM INVESTMENT: $50,000 with the average investment expected to be circa $400,000. (Investors can invest through their superannuation, their business or using personal funds).

INVESTMENT REQUIRED: 20% of the investor’s commitment is required on application with the remainder called on periodically over 2 years.

FUND TERM: 6 years with the manager having the right to extend by up to 5 successive periods of 1 year.

FUND STRUCTURE: The Fund is structured as a Limited Partnership. The fund has obtained unconditional registration as an ESVCLP. An ESVCLP (Early Stage Venture Capital Limited Partnership) is a government initiative that provides tax advantages for investing in small businesses. Unconditional registration as an ESVCLP may provide significant tax benefits to investors.

INVESTMENT MANAGER: PieLAB Venture Partners Pty Ltd

Highlights of the strategy and fund

INNOVATIVE INDUSTRY SPECIFIC STRATEGY

  • The Fund will invest in businesses that service the real estate industry using money raised from the real estate industry. The collective knowledge, contacts and customer base of the investors will be used to grow the investee businesses thereby providing reduced risk and elevated returns to the investors.
  • The Fund’s advisory board are the who’s who of the Australian real estate industry.
  • The Fund’s investors will be a group of selected industry professionals.

ALIGNED INTERESTS AND TRACK RECORD OF MANAGER

  • The Fund’s managers include some of the most successful individuals in the real estate industry who will be investing at least $2.5 million in the Fund creating strong alignment with other investors in the Fund.
  • The PieLAB management team has a highly successful track record of investing in and helping grow early stage companies across a broad range of industry sectors.

TAX EFFECTIVE RETURNS

  • The fund is structured as a Limited Partnership and has obtained unconditional registration as an ESVCLP. Unconditional registration as an ESVCLP, means returns to investors may be income and capital gains tax exempt.

A LOW INITIAL CASH INVESTMENT

  • Investors are required to provide 20% of their capital commitment on application with the remaining 80% to be called as investments are made.

POTENTIAL FOR LARGE CAPITAL RETURNS

  • Investors have the potential to generate returns that are difficult to achieve in most other investment classes. While the Fund is technically a venture capital fund, its returns are likely to be lower risk because risks are partially mitigated by the Fund investing in a diverse portfolio of early stage investments whose customer base are the very people who invested in the Fund as well as the broader industry. Furthermore the Fund manager is highly experienced in the industry.

STRONG NETWORK AND INVESTMENT PIPELINE

  • PieLAB Venture Partners have a very strong network of contacts within the real estate industry, and have already developed a strong pipeline of quality opportunities for the Fund to invest in.

A HIGHLY SUCCESSFUL TRACK RECORD

  • The PieLAB team are highly experienced entrepreneurs or executives and have an excellent track record of working in, growing and investing in businesses across a range of industries, with particular expertise in the real estate industry. These include:
    • Rental Express – Chris Rolls was the founder and managing director of Rental Express, the largest privately owned specialist property management business in Queensland.
    • Caporn Young – Richard Anderson was a director and shareholder at Caporn Young Estate Agents, a premium real estate brand in Perth as well as having owned and built a chain of 80 restaurants in the hospitality industry.
    • Macquarie Bank – Shaun Bassett was the National Head of Real Estate Banking at Macquarie Bank having overseen evaluation of and lending to hundreds of residential real estate agencies.

How are returns generated?

Small businesses that provide services to the real estate industry could experience high levels of growth if they had access to:

  • Capital to help them expand their operations,
  • Expertise that understands the real estate industry,
  • Expert mentors that have a track record of entrepreneurial success,
  • An existing customer base, and
  • A network of Australia’s leading real estate industry professionals to provide them with all important introductions and contacts.

Returns are generated by the Fund investing in these businesses as demonstrated below:

  1. Real estate principals co-invest with PieLAB in the Fund,
  2. The Fund buys / invests in businesses,
  3. The investors as well as other agencies use the services of the businesses,
  4. PieLAB’s management team help improve and grow the businesses,
  5. The businesses increase in value,
  6. PieLAB sells the businesses,
  7. The profit generated is returned to the investors.

Next steps

To learn more about investing in the Fund contact PieLAB Venture Partners to talk to one of the management team and also request a copy of the Information Memorandum.

Please note this investment is not available to all people and the Fund manager reserves the right to decline investment from various individuals or parties.