Aura Group
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Aura Group

Property Credit Fund

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Property Credit Fund Investors

Download the Property Credit Fund Investors Presentation.

 
 

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About

INVESTMENT OVERVIEW

The primary objective of the Aura Property Credit Fund (“APCF”) is to provide regular return with a strong premium to cash by giving wholesale investors exposure to a diversified portfolio of short to medium term commercial loans secured by registered first mortgage over Australian property.

 
 

Fund Strategy

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ORIGINATIONS & INVESTMENT PROCESSES

The investment Manager is confident of its ability to identify opportunities where the risk/reward profiles are favorable by combining Aura’s unique network to originate investment opportunities with a comprehensive and disciplined investment and risk management framework.

INTENDED BENEFITS:

·         Access to a strong proprietary origination platform;

·         Regular income for investors, targeting 10% p.a. (net of fees);

·         Portfolio diversifications benefits through reduced concentration mix;

·         Strong credit position with security in property over first-mortgage.

·         Access to co-investment opportunities.

 
 

MARKET OPPORTUNITY

The Investment Manager has identified an opportunity to produce risk-adjusted returns within a growing funding gap in Australia’s real estate finance market, citing regulation and tightening credit cycle as a catalyst for greater lending opportunities amongst alternative lenders.

TRENDS IN AUSTRALIA’S CRE FINANCE MARKET

▪ The total size of Australian ADIs’ exposure to total (secured and unsecured) commercial real estate finance is estimated to be $237.3 billion

▪ Since the Global Financial Crisis, ADIs and their subsidiaries have continued to carry the bulk of domestic debt provision in Australia’s financial system, with an estimated market share of 94%3.

▪ Changes to regulatory capital requirements such as the lifting of CET1 ratios to at least 10.5% by 1 January 2020, will force ADIs to use a combination of reduced lending growth, asset divestments and equity raisings to prepare for APRA’s “unquestionably strong” benchmark.

▪ APRA’s announcement of additional supervisory measures for lending practices amongst ADIs has forced banks into increasingly selective and conservative credit terms, presenting an opportunity for alternative lenders to provide more flexible forms of finance to fill the gap.

▪ Key findings from the Banking Royal Commission on the insufficient responsible
lending practices will likely prompt greater enforcement of lending laws by regulators.

TENDS IN OVERSEAS FINANCE MARKETS PROVIDE AN OUTLOOK FOR AUSTRALIA’S REAL ESTATE LENDING LANDSCAPE.


▪ Despite steady growth in non-ADI lending, the sector only accounts for 6.0%3 of total financial system assets, which is well below their counterparts in Europe and the United States.

▪ The United States Federal Reserve’s guidance to reduce banks’ leveraged lending to businesses in 2016 saw the non-ADI sector increase their market share4.

▪ Stricter capital requirements for banks in the Netherlands have contributed to a significant rise over the past six years in the share of outstanding mortgage credit originated by pension funds and insurers5

 
 
 
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Originations & Investment Processes

The investment Manager is confident of its ability to identify opportunities where the risk/reward profiles are favorable by combining Aura’s unique network to originate investment opportunities with a comprehensive and disciplined investment and risk management framework.

 
 
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OUR STRATEGIES

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CONTACT US

 

To find out more about the Aura Property Credit Fund, please contact

 
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Eric Chan

Founder /Managing Partner