- Who is Australian Secure Capital Fund?
Australian Secure Capital Fund Ltd (ASCF) is a Brisbane based fund manager operating three pooled mortgage investment funds. ASCF Premium Capital Fund, ASCF Select Income Fund and ASCF High Yield Fund.
Funds invested with ASCF are lent to borrowers seeking short term loans and are secured by a registered 1st or 2nd mortgage over the borrower’s property.
ASCF then pays investors a monthly return from the interest earned on these loans of up to 7.75%* per annum depending on the term of the investment and which of our three funds you choose to invest in. Click here to view our investor targeted distribution rates.
Our directors have been in the private lending loan market since 1997 using funds from high net worth individuals as well as their own personal funds.
In 2016 ASCF was established to provide the same opportunities to retail investors as we were offering our high net worth individual clients.
Our loan book currently exceeds $200 million across our retail funds.
- Why choose ASCF?
We understand what investors are looking for when choosing where to invest their hard-earned funds.
We believe ASCF Funds provide this by investing in high yielding loans secured by registered mortgages over Australian property.
Our directors have over 80 years of banking and property experience and have been in the secured private lending loan market in Australia since 1997 giving them the experience and knowledge needed.
Our mortgage funds ASCF Premium Capital Fund, ASCF Select Income Fund and ASCF High Yield Fund provide short term loans; minimum 1 month with a maximum loan term of 24 months for ASCF Premium Captial Fund and 12 months for ASCF Select Income Fund and ASCF High Yield Fund. This allows us to better manage our funds’ liquidity and enables us to offer our investors short term investments of 3 months all the way through to 24 months.
Unlike peer to peer lending where you invest directly in one loan your investment in ASCF Funds is spread across the entire pool of loans contained in each respective fund and not lent directly to a particular borrower or security property thereby minimising risk.
The Funds do not provide funding to property developers for development purposes based on the anticipated end value of any improvements to be constructed on the proposed security property.
Our PDS prohibits us from making loans to any ASCF Directors, shareholders, or associated entities.
Since ASCF was launched in 2016:
- All investors have received their distributions every month
- All investors have had their request to redeem funds paid on time
- The value of investors initial investment has remained stable at $1.00 per unit.
- What is the minimum commitment?
The minimum investment amount for all funds is $5,000 and the minimum investment term is 3 months.
- What is the maximum amount I can invest?
A maximum investment limit of $250,000 applies to all 3-month investment terms in ASCF Select Income Fund and ASCF High Yield Fund.
The limit will be applied per fund, thereby an investor may make an investment of $250,000 in each of these funds for a 3-month term should they so desire.
There is no maximum investment limit on 6, 12 or 24-month investment terms.
- Are there any fees?
There are no entry or exit fees, and the distributions payable to you are net of all fund costs and management fees.
- What are the key benefits of ASCF?
All investor’s funds are used to provide loans to borrowers secured by registered mortgage over their property.
The maximum loan amount we can lend to a borrower is 80% of their property value based on a current valuation of the security property for ASCF Select Income Fund and ASCF High Yield Fund and 70% for ASCF Premium Capital Fund.
Your investment is spread across the entire pool of loans contained in each fund and not lent to a particular borrower or an individual security property.
All investor funds are deposited directly with our custodian Certane CT Pty Ltd (CCT) who also hold all the mortgages in their name as custodian for the funds. e.g.: You invest in any of our funds and Certane CT Pty Ltd hold all the money and mortgages as custodian for the funds. ASCF Ltd does not hold any fund assets at all.
After we do our due diligence for prospective borrowers and are satisfied everything is ok, we instruct our solicitors to prepare mortgage documents for signing by the borrower. Once they are returned to our lawyers they certify to CCT and us that everything is ok to proceed with the loan and we then instruct CCT to send the funds to our solicitor’s trust account, who in turn send the funds to the borrower.
Under the terms of the Funds documents, loans to ASCF directors, shareholders or associate entities are strictly prohibited.
The Funds do not provide funding to property developers for development purposes based on the anticipated end value of any improvements to be constructed on the proposed security property.
Our compliance plans and constitution are lodged with the Australian Securities and Investments Commission (ASIC) under our Australian Financial Services License 491201 issued by ASIC. Click here to view our licence.
All of our Fund’s financials and compliance plans are fully audited by Grant Thornton, who are ASIC approved auditors.
Our management team is comprised of successful professionals with a combined experience of more than 80 years in property and banking.
If you would like to view a summary of our loans click here.
- How long have we been going for?
We have been offering short term business loans since 1997, using both our own money and money from high net-worth individuals. During this period, we have never lost any principal. ASCF was established to operate retail mortgage funds in 2016 to provide the same opportunities to retail investors as we were offering our high net worth individual clients.
- What type of mortgage fund does ASCF operate?
We operate ‘pooled’ mortgage funds which means that your investment is spread across the entire loan book for each particular Fund. We do not provide peer to peer lending.
- What is the difference between a pooled mortgage fund and peer-to-peer lending?
ASCF operates pooled mortgage funds which means your investment is spread across all our loans in each fund. If a borrower on a particular loan fails to pay their interest on time you will still receive your distribution at the end of each month as your investment is spread across the entire loan book.
Peer to peer (P2P) lending matches people who have money to invest with people who are looking for a loan. It’s also called marketplace lending because an intermediary (online platform, usually a website), is used to match investors with borrowers.
With P2P lending, all the lending risk is taken by investors. This means that if the borrower on the particular loan does not pay their interest on their loan on time the investor may not get paid their interest until later.
Please note that ASCF does not offer P2P lending.
- How much notice do I need to give if I want to modify or terminate my investment?
Investment Term Notice Required 3 months 1 month 6 months 2 months 12 months 3 months 24 months 3 months
Please note that your investment will automatically roll on the maturity date for the same term at the then prevailing distribution rate for such term unless we receive prior notification from you within the required time period.
Should you fail to provide the requisite notice you may still be able to withdraw your funds on the maturity date however this will be subject to the funds’ liquidity and is in our discretion.
In such situations, you are required to complete and lodge an early withdrawal request form which is available from our website. ASCF has a period of up to 21 days to make a determination on your request and if approved a 1% early withdrawal fee may be charged on the amount withdrawn. You will still receive all your distributions up to the date of the withdrawal.
- Can I withdraw my funds at any time?
You must hold your investment for the minimum investment term that you have selected. Investments will be rolled for a further investment term unless the withdrawal request is lodged within the time frame required for each investment option. Refer to the PDS for details of the timeframe within which withdrawal requests must be lodged.
We aim to pay all withdrawal requests within 21 days of the end of the investment term. All withdrawal requests since inception have been paid in full and on time.
In circumstances of hardship you may be able to withdraw part or all of your investment prior to the expiration of the investment term subject to our discretion and the relevant fund’s liquidity. In such situations, you are required to complete and lodge an early withdrawal request form which is available from our website. ASCF has a period of up to 21 days to make a determination on your request and if approved a 1% early withdrawal fee may be charged on the amount withdrawn. You will still receive all your distributions up to the date of the withdrawal.
- How does the fund work?
You invest in one of our Funds for the amount and duration you are comfortable with (3 to 24 months). Depending on which fund you invest in and the term, you will receive a targeted distribution rate of up to 7.75%* per annum payable monthly. Click here to view our investor rates.
Your distribution will start accruing once we have accepted your completed application form and your funds have been received in our custodian’s bank account. Click here for instructions on how to apply.
Distributions are paid within 7 days of the end of each month directly into your nominated bank account.
There is no set time period for depositing your funds once the application is completed but the distribution will not start accruing until such time as the funds are deposited.
Your funds are held in trust by our custodian Certane CT Pty Ltd who is authorised by ASIC to act in such capacity.
The Funds use the capital contributed by investors to provide loans to borrowers and we take a registered mortgage over real property to secure those loans.
The Funds lend to borrowers at various interest rates, between 6.95% to 12.95% per annum for 1st mortgage loans and around 18% for 2nd mortgage loans, which enables us to pay monthly distributions to investors and fund the operational costs of the Funds.
Your investment in a Fund is effectively spread across that Fund’s portfolio of loans – it is not linked to a specific borrower, loan or security.
An investment in the Funds is subject to general investment risks, specific risks of investing in a managed fund, as well as all the risks of investing in a portfolio of 1st and 2nd ranking mortgages over real property, depending on the Fund you have invested in.
- How is a return of 7.75%* per annum possible?
Our lending rates for borrowers start from around 6.95% per annum on a 1st mortgage and around 18% per annum on a 2nd mortgage with a loan term of between 1 and 24 months maximum.
We are able to offer our investors higher returns due to the fact that the interest rates we charge our borrowers are higher than traditional Bank finance.
We can do this because borrowers often require urgent and / or short-term funding and this is why they turn to us as their bank is unable to act quickly enough.
ASCF makes a margin on the difference between the interest rate we charge the borrower and what we pay our investors which covers all fund costs and management fees.
- Can I see a summary of your loans?
Yes, please click here to download a summary of our loans since inception.
- Why is there a demand for this type of finance?
The period post the global financial crisis in Australia saw the Federal Government react by introducing credit legislation known as the National Consumer Credit Protection Act.
The aim of the legislation was to create a national credit regime to try and protect retail consumers by introducing tighter lending practices when it came to buying a family home or investment property. At the same time the credit market tightened with traditional financiers offering less flexibility or availability for business finance.
Whilst the situation has eased considerably in the residential lending market, it has not eased for those requiring fast access to business finance. Traditional lenders have focussed their attention on “mum and dad home loans” or established corporate lending to the big end of town. The small business owner that requires short-term business funding has been left behind.
Our funds offer customers access to business finance with a fast, efficient and sensible lending approach whilst still adopting a stringent lending criteria.
- What is the difference between your mortgage funds?
ASCF operates three pooled mortgage funds: ASCF Premium Capital Fund, ASCF Select Income Fund and ASCF High Yield Fund. Each Fund offers different targeted rates of return to investors. Click here to view our rates.
ASCF Premium Capital Fund provides short to medium term 1st mortgage loans to a maximum Loan to Valuation Ratio of 70% for a maximum loan term of 24 months. This fund pays investors a targeted distribution of up to 6.75% per annum depending on their investment term and also provides investors with additional capital protection measures via Spread Protection. Please see below section on Spread Protection. Returns are paid monthly.
ASCF Select Income Fund provides short term 1st mortgage loans to a maximum Loan to Valuation Ratio of 80% for a maximum term of 12 months. This fund pays investors a targeted distribution of up to 7.25% per annum depending on their investment term. Returns are paid monthly.
ASCF High Yield Fund provides short term 1st and 2nd mortgage loans to a maximum Loan to Valuation Ratio of 80% for a maximum term of 12 months. This fund pays investors a targeted distribution of up to 7.75%* per annum depending on their investment term. Returns are paid monthly. The ASCF High Yield Fund is able to pay investors higher returns because a percentage of the loans made by this fund are secured by 2nd mortgages. Such loans rank second in priority to first mortgage loans and, accordingly, borrowers are charged a higher interest rate and investors may receive a higher rate of return compared to our first mortgage only Funds.
An example of a second mortgage loan scenario could be where a borrower owns a property valued at $1M and has a first mortgage to XYZ bank for $500,000. Under the terms of the ASCF High Yield Fund, the Fund would be permitted to provide the borrower with a $300,000 second mortgage which would bring the total LVR on the property to 80%.
The only other difference is if the borrower were to default and we were forced to sell the property under the terms of our second mortgage, XYZ bank would have first priority over the sale proceeds in order to recover their loan, outstanding interest and fees and we would have a second ranking priority.
- What are the risks?
There are risks associated with investing in the Funds.
ASCF will attempt to manage and mitigate risks, however not all risks can be eliminated, and some risks are outside the control of ASCF. If risks eventuate, then it can have a negative impact on distributions and the value of your investment. Distributions are not guaranteed nor are any capital returns.
Key risks include (but are not limited to):
- Loan default.
- Reduction in property values.
- Breach of borrowing covenants by borrowers.
- Health and social issues (e.g. COVID-19).
- What happens if there is a loss?
ASCF operates a provisioning policy in relation to losses on individual loans and should a loss on a secured property occur, it may impact the unit price of your investment.
For example, if you had invested $100,000 in one of our Funds for 6 months and the unit price at the time of your investment was $1 then you would receive 100,000 units and the value of your investment would be $100,000. If the relevant Fund were to incur a loss on a loan and an impairment charge was made of say $500,000 there would be a reduction in the unit price calculated as follows:
Value of loss ($500,000) / Total funds under management at date of impairment ($50,000,000)
The loss represents 1% of the funds under management.
The Unit price would therefore decrease by approximately 1% to 99 cents.
Your investment would also decrease by 1% or $1,000 to $99,0000 which represents the value of the loss on your investment.
You would still continue to receive Distribution Payments but this would be calculated on your reduced investment amount.
- What is the Investor Reserve Account?
ASCF has established a discretionary Investor Reserve Account to be used for the sole benefit of Investors in the Funds. The Investor Reserve Account is held by ASCF Ltd and does not form part of the Funds’ assets.
The decision to use money held in the Investor Reserve Account is at the sole discretion of ASCF Ltd and funds held in the Investor Reserve Account may be used to cover impairments and capital losses incurred on individual loans caused due to borrower defaults for the ASCF Premium Capital Fund, ASCF Select Income Fund or ASCF High Yield.
An impairment would be offset by the recognition of charge offs against investment management fees due to ASCF Ltd. The charge offs are crystallised as a reduction in investment management fees due to ASCF Ltd at the same time as the shortfall on the investment is crystallised. This would then be funded from the Investor Reserve maintained by ASCF Ltd to offset credit risk presuming there are adequate funds available in the account to cover the impairment.
ASCF Ltd contributes to the Investor Reserve Account out of the management income it receives on a cash received basis each month. The amount contributed to the Investor Reserve Account shall be in the sole discretion of ASCF.
ASCF Ltd may from time to time make additional contributions to the Investor Reserve Account from its retained earnings or other funds available to it to reduce any potential volatility of distributions to investors, cover capital losses incurred on individual loans in the Funds, fund expenses that would ordinarily be payable by the Funds’ and fund legal and/or other recovery fees in respect to loans either fund has made.
The Investor Reserve Account cannot be overdrawn and in the event a loan loss occurs and there are insufficient funds in the Investor Reserve Account to cover the loss or ASCF does not exercise its discretion to use the funds in the Investor Reserve Account to cover the loss, the Unit price will be adjusted accordingly to reflect the capital loss.
- What is spread protection?
In addition to the ability to use the Investor Reserve Account, ASCF Premium Capital Fund also offers its Investors the benefit of spread protection should an impairment or capital loss on a mortgage investment occur. This is an added measure of capital protection offered to Investors in the ASCF Premium Capital Fund only.
The spread is the difference between the monthly income received by the ASCF Premium Capital Fund in interest payments on mortgage investments less the amount paid to Investors in the ASCF Premium Capital Fund in Distribution Payments. The spread is used to cover ASCF Premium Capital Fund’s expenses and the Responsible Entity’s performance fees.
In the event a capital loss is declared on a mortgage investment by the Responsible Entity in respect of the ASCF Premium Capital Fund and the value of the Investor Reserve Account is insufficient to make good the loss at the time the loss is declared, then the Responsible Entity shall use any accrued performance fees owing to it from the ASCF Premium Capital Fund on an ongoing basis until such time as the value of the Units in the ASCF Premium Capital Fund which may have decreased as a result of such loss are returned to their same value prior to the loss being declared. The Responsible Entity shall not be entitled to any performance fees from the ASCF Premium Capital Fund during this time and only Fund expenses such as audit, legal, accounting and other costs associated with the running of the Fund may be reimbursed or paid.
Loan Book Value – $20,000,000
Earnings from Australian Secured 1st Mortgage Loans
– Average interest rate paid by borrowers, secured by 1st mortgage loans over property – 9.95% per annum.
– Annual Interest Received from Borrowers – $1,990,000 per annum
– Monthly Interest Received from Borrowers – Approx. $165,833 per month
Distributions Paid to Our Investors
– Average distribution rate – 5.25%* per annum.
– Annual Distributions Paid to Investors – $1,050,000 per annum
– Monthly Distributions Paid to Investors – Approx. $87,500 per month
The Annual Distribution Spread is calculated by deducting the distributions paid to our investors from the interest received from borrowers. In this example it would be:
Interest received from borrowers $1,990,000 minus distributions paid to investors $1,050,000.
The Annual Distribution Spread in this example is $940,000 less fund expenses such as audit, legal and accounting fees.
Monthly Distribution Spread is, therefore, $78,333 less expenses.
This example provides approximately $78,333 of spread protection per month. This will be used on an ongoing monthly basis to make good any loss the fund may incur. In this example, should a $200,000 loss be incurred the loss would be made good in approximately three months.
ASCF would not be permitted to take any performance or management fees until such loss was made good.
- Can I meet you first?
Our office is in Milton, Brisbane not far from the Brisbane CBD. We welcome all potential investors to come to our office to speak with one of our Directors or investor relations team. Our location is Level 1, 50 Park Road, Milton Qld. 4064
- How can I get started?
If you need help with your application, please let us know and we can assist you.
- Who can certify documents?
In order to establish your investment account, we may require certified copies of certain documents including trust deeds and all foreign identification.
We do not require Australian issued identification documents to be certified, this includes passports or drivers licences as we are able to verify these directly with third party verification services.
All foreign identification must however be certified. This means a copy of the original document that has been certified by an eligible certifier.
When having documents certified, you should show the original document to the certifier.
Each certified copy must include the statement ‘I certify this is a true copy of the original document’ (or similar wording) and must be signed by an eligible certifier. The certifier must state his/her qualification or occupation which makes them eligible.
Please note we require the copy which was actually signed by the certifier (i.e. The original penned signature of the certifier).
A person in the following profession or role is an eligible certifier on the basis they have obtained their qualification in Australia.
- A person authorised as a notary public in a foreign country;
- Australian Consular Officer or Australian Diplomatic Officer;
- Chiropractor, dentist, medical practitioner, nurse, optometrist, pharmacist, physiotherapist, psychologist and veterinary surgeon;
- Legal practitioner, patent attorney and trade marks attorney;
- Judge of a court, magistrate, Registrar or Deputy Registrar of a court and master of a court;
- Chief executive officer of a Commonwealth court; Clerk of a court; Commissioner for Affidavits; Commissioner for Declarations;
- Justice of the Peace/Notary Public/Marriage celebrant;
- Australia Post employee who is in charge of an office or has 2 or more years of continuous service;
- Police officer/bailiff/sheriff;
- Bank officer, building society officer, credit union officer and finance company officer with 2 or more continuous years of service;
- Member of Chartered Secretaries Australia;
- Member of Engineers Australia, other than at the grade of student;
- Member of the Association of Taxation and Management Accountants;
- Member of the Australian Defence force who is an officer or a non-commissioned officer with 2 or more years of continuous service;
- Member of the institute of Chartered Accountants in Australia, the Australian Society of Certified Practising Accountants or the institute of Public Accountants;
- Member of the Australasian Institute of Mining and Metallurgy;
- Member of the Parliament of the Commonwealth/the Parliament of a State/Territory legislature/local government authority of a State or Territory;
- Minister of religion;
- Permanent employee of the Commonwealth or a Commonwealth authority/a State or Territory or a State or Territory authority or a local government authority, with 2 or more years of continuous service;
- Teacher employed on a full-time basis at a school or tertiary education institution;
- An officer with, or authorised representative of a holder of an Australian financial service licence having 2 or more years of continuous service with one or more licensees;
- An officer with or a credit representative of, a holder of an Australian credit licence having 2 or more years of continuous service with one or more licensees.
- What are the ARSN codes for your mortgage funds?
ASCF Premium Capital Fund: ARSN 637 973 409
ASCF Select Income Fund: ARSN 616 367 410
ASCF High Yield Fund: ARSN 616 367 330
- What are the APIR codes for your mortgage funds?
ASCF Premium Capital Fund: APIR ASE0660AU
ASCF Select Income Fund: APIR ASE3314AU
ASCF High Yield Fund: APIR ASE8386AU