Invest in an innovative high yield fund, with 12% target returns, whilst supporting the Australian SME sector

High Yields whilst supporting the SME sector

Small to Medium Enterprises (SME’s) are defined by the ABS as businesses with fewer than 199 employees. They provide employment to almost 70% of the Australian workforce and account for over half of the output of the private sector.

SME’s may have more difficulty obtaining funding as the banks generally require significant personal collateral in the form of property to borrow.

Macquarie Bank estimates there is a $70bn underbanked market and Morgan Stanley estimate the market for this lending will grow to $11.4 billion by 2020.

Financial Technology (Fintech) lenders are using technology to increase the efficiency of SME lending and are targeting niches in the SME lending market. Fintech lenders require funds to lend to SME’s, and opportunities to earn target returns of up to 12% can be found in the market with the right network. With the right funding solution for the lenders, support can be given to the SME sector.

Aura’s innovative solution to the funding problem

To capture this opportunity the Aura High Yield SME Fund invests through leading on-line lending platforms in Australia providing the potential for wholesale investors and family offices to access high returns and a target of capital preservation as part of a smartly diversified portfolio that includes exposure to credit and fixed income investments.

Our strategy is designed to produce returns that have little or no correlation to public markets, high cash flow and low volatility. The fund will work with Marketplace and peer-to peer lenders who lend to SMEs. The fund will look to purchase notes from SPVs, or units in managed investment schemes that hold the underlying loans originated by the originators. We will also consider other investment methods as the market matures.

Our investment team has tracked over 20 Australian Fintech platforms and we have completed preliminary due diligence on all those, thus giving investors access to this attractive, fast growing and increasingly complex asset class in a very simple to access fund. We will only work with the originators that meet our investment criteria. 

 

Fund strategy

ENHANCED ANALYSIS AIMED AT PROTECTING YOUR CAPITAL

Members of the Investment Committee and Management Team have extensive experience in Fintech, VC, Lending and Debt Markets, which brings a unique skill set to assess a new credit class that is emerging in Australia. The team has been at the forefront of this movement, providing an edge that sets us apart from traditional credit investors.

The Aura High Yield SME Fund aims to leverage the in-house tech focused VC experience in assessing the early stage SME Fintech lenders as the first part of the credit process. This is vital to assess the lenders who will be able to service their portfolios on an ongoing basis, and to provide quality deal flow on an ongoing basis as the market and the Fund grows.

From there, more traditional analysis of the underlying lend and portfolio characteristics is undertaken, with a view to minimise capital loss and produce consistent returns throughout the growth of the industry and through economic cycles.

ACCESS TO UNIQUE ASSETS UNAVAILABLE IN PUBLIC MARKETS

Aura’s extensive network and experience in both lending and fintech businesses opens unique investment opportunities not available in public markets. We aim to target the premium players in the Fintech SME lending market to maximise risk adjusted returns for investors. 

 

Fund ManagerAura Funds Management Pty Ltd (AFM) (ABN 96 607 158 814)
TrusteeAFM
Management Fee1.25% ex GST
Performance Fee20% Above Benchmark ex GST
BenchmarRBA Cash Rate +5%
Estimated Reimbursable expens0.5% - 1%
Distribution FeeA distribution fee may be paid for Fund marketing at the discretion of the Fund Manage
CustodianAustralian Executor Trustee
AdministrationAura Partners
Distribution Payment FrequencyMonthly
Minimum Investment$100,000 (Subject to the discretion of the Trustee
Target Fund SizeMinimum $30m Open Ended
Reporting and ValuationsSemi-Annuall
Early RedemptionEarly redemptions are available at a 5% discount to face value at the discretion of the Truste
ApplicationsMonthly, at the discretion of the Trustee

Contact Us

To find out more about the Aura High Yield SME Fund, please contact:

Brett Craig, Director

D: +61 2 9199 8859

E: brett.craig@aura.co