The Avestix Impact Property Fund is a pooled mortgage fund designed to encourage systematic change in property development while helping meet continued market demand and the increasing need for positive social and environmental outcomes. The Fund will extend loans for the purposes of impact investing related to property acquisition, refinancing, development, construction, rejuvenation and environmental projects, and any other appropriate activities in order to maximise meaningful impact across environmental and social outcomes, including financial and non-financial returns.
Exciting opportunities for investment include affordable, social, and NDIS housing, and developments with sustainable energy features. Investors will share in a proportional amount of the risk and profit from all the Fund’s loans, rather than any one particular loan. It would be difficult for most individual investors to match the opportunity of diversification and potential impact the Fund presents when investing on their own.
Avestix is pleased to have identified a continuous pipeline of developments for impact investment.
ESG assessment provides a comprehensive criteria framework for Environmental, Social and Governance outcomes for property projects.
This Fund is open for Wholesale and Experienced Investors only
The Avestix Impact Property Fund (the Fund) is a pooled mortgage fund designed to encourage systematic change in property development through impact investing. The Fund will extend Loans for the purposes of property acquisition, refinancing, development, construction, rejuvenation and environmental projects, and any other appropriate activities in order to maximise meaningful impact across environmental and social outcomes, including both financial and non-financial returns for investors.
A specific methodology will be applied, including an ESG Assessment Framework, that assesses each project for its economic return and potential environmental and social outcomes. Outcomes are likely to include such important areas as affordable and clean energy, reducing the cost of living, waste minimisation, environmental impacts, and community benefits through the availability of social, accessible and affordable housing.
The Fund will use an assessment framework based on Environmental, Social and Governance factors (ESG) for projects disclosing their sustainability profile and how they will meet certain criteria across environmental, social and governance concerns, drawn from best practice guidelines both in Australia and internationally.
This will include aspects such as a project’s projected energy use, waste, pollution, natural resource conservation, management of toxic emissions, community engagement and achievements, health and safety, business practices and transparency, and compliance.
Applying an ESG framework is expected to support the property sector by improving the sustainability profile of property-related projects, increase the capacity of developers to reduce their footprint and account for environmental and social outcomes in their developments, and deliver improved outcomes for Australian communities.
Impact investing offers new opportunities for capital to deliver measurable positive environmental and social outcomes, as well as to be recycled into future investments. It provides a way for investors to invest their money with purpose – combining social responsibility with the diversification of revenue streams.
The ESG Assessment Framework provides an opportunity for measuring and reporting back to investors on the environmental and social outcomes achieved through completed projects. Regular reports on Fund performance will feature both financial and non-financial return information for investors so they can track achievements of the Fund.
Further, Avestix is embedding ESG as a framework for measuring its ongoing environmental, social and governance impacts across all aspects of its business.
The Fund offers a diversified investment portfolio to provide a balanced return of between 5% and 8% per annum, after costs. Investors will earn a monthly, variable return rate on their investment, with distributions earned from the assets of the Fund, including the pool of mortgage investments and allocated cash assets (less fees and expenses).
Distributions will be calculated daily and paid monthly in arrears. Investors will have the option of having their monthly return paid into their nominated bank account or reinvested into the Fund.
Investors will earn a monthly, variable return rate on their investment.
The rate of return will depend on the amount of cash assets held, ongoing investment returns and the repayment of borrowings. While returns cannot be guaranteed, the Fund offers a diversified portfolio to provide a balanced return. The risk of one investment not performing is mitigated by a spread of diversified, multiple investments. The Fund intends to maintain investment diversification through balancing project types, geographic spread, investment amounts and terms.
The rate of return is variable; a successful investment may return a higher than anticipated profit and this will be included in the calculation for monthly distribution.
Investors will receive monthly distribution statements, an annual taxation statement, monthly updates regarding Fund performance, and quarterly social impact reports.
Projects include, but will not be limited to, property-related development such as residential, health (disability and aged-care housing), community development (social, affordable and accessible housing), commercial, retail, mixed-use, development sites and industrial properties; sustainable agriculture; renewable energy; rejuvenation and environmental projects; international development; and technology platforms for property related services (i.e. Prop-Tech, Fin-Tech, Smart Homes and Cities).
The National Disability Insurance Scheme (NDIS) is a welfare support scheme of the Australian Government that funds costs associated with disability. The NDIS may also contribute to the cost of accommodation in situations where the participant has a need for specialised housing due to their disability. The scheme was legislated in 2013 and went into full operation in 2020. The scheme is administered by the National Disability Insurance Agency.
Specialist Disability Accommodation (SDA) is housing that has been specially designed or modified to suit the needs of people who have an ‘extreme functional impairment’ or ‘very high support needs’ as defined by the NDIS. The NDIS funds the cost of disability-appropriate housing through SDA payments to an SDA provider.
It is estimated that the market for disability housing is more than $5 billion over five years, with a total of 16,000 appropriate dwellings required and a current significant shortfall against demand. Funding for housing provided directly to people with a disability creates a user-driven market, with returns on investment at market rates (5-12% per annum). The Impact Property Fund intends to help meet this demand by investing in the development of disability housing in multiple states.
Investments are geographically spread across Australia and include current project opportunities in Queensland (greater Brisbane area, Sunshine Coast), New South Wales (Western Sydney Aerotropolis Corridor) and Tasmania. This is likely to expand with additional project opportunities.
The Fund has assets consisting of loans secured by Australian property, cash at bank, basic deposit products (including term deposits), and other forms of security as appropriate from time to time.
The primary security for each loan investment made by the Fund will be a General Security Agreement (GSA) which will provide a fixed or floating charge over the assets of the borrower, plus either a first or second mortgage. The GSA will provide the necessary protections for the Fund and, in the event of default by the borrower, remediation through possession of the development project secured by the GSA. Additional types of security may be taken including third-party mortgagor documentation and personal guarantees to support Loans.
All investment decisions are assessed under a comprehensive project assessment criteria, ensuring that the risk and reward profile of each project is appropriate for the Fund and considers the following factors:
Investment decisions will be based on risk-adjusted returns over the term of the investment, and once approved, will be properly documented and appropriately secured.
All potential investors should be aware that subscribing for an investment in the Fund involves various risks, like any other investment. There are a number of risk factors that could affect the performance of the Fund and the repayment of the original investment, from general economic risks to the specific risks associated with an individual borrower or property held as security. Many risk factors fall outside of the Fund Manager’s control and cannot be completely mitigated.
However, projects will be assessed against a comprehensive assessment criteria, including having regard to the risk profile for each project, to determine whether they are suitable for investment by the Fund. Categories of risks considered in the analysis and final investment decision include (although are not limited to) the characteristics of the proposed development, the suitability and servicing capacity of the borrower, market risk, the ability for the borrower to exit the project, and potential negative environmental and social outcomes that may adversely affect the project.
Once assessed and confirmed for investment, each project will have a comprehensive suite of documentation prepared and reviewed by a legal firm experienced in mortgage finance, verification and validation requirements. This legal firm will also attend to settlement of the legal documentation. Loan monitoring will cover day-to-day and ongoing management of the loan, including in respect of payment of interest and principal when required, and whether loan covenants and conditions are being observed. Regular reports will reflect the status of each project. The Fund will pursue arrears and potentially enforcement if a borrower is unable to meet their repayment obligations.
Additionally, the Fund has a deliberate strategy of pooled investments, so that the risk of one investment is mitigated by a spread of diversified, multiple investments to provide a balanced return. The Fund intends to maintain investment diversification through balancing project types, geographic spread, investment amounts and terms.
All initial investments in the Fund, not including reinvestments from distributions, are subject to a minimum holding period of 12 months. This is due to the nature of the Fund’s assets being illiquid in nature, i.e. being determined by loan agreement terms, as the Fund is not an ‘at call’ cash account and cannot be treated as such.
A three-month notice period is required for an investor to request a partial or full withdrawal of their investment, which is in addition to the minimum holding period of 12 months, i.e. investors should be prepared to hold their investment in the Fund for at least 15 months from the date of their initial investment.
Investors can add to their investment at any time in minimum increments of $1,000; there is no maximum for additional investment.
Investors can also elect to reinvest their monthly distribution rather than have it paid to their nominated bank account. There is no minimum amount for reinvesting their monthly distribution.
Investors who wish to withdraw their investment in part or in full must provide notice of their request by completing and signing a Redemption Request and lodging it with the Fund Manager. The Fund Manager reserves the right to reject any Redemption request based on the current or future liquidity of the Fund, or waive any minimum requirements at its discretion.
Susan Lindeque, CEO and Founder of Avestix Group, is a registered Chartered Accountant and Real Estate Agent with more than 25 years of successful commercial and financial experience, including managing numerous international billion-dollar projects. Susan is also CEO and Founder of Linzen Property Group, a large property developer with interests in Brisbane, the Sunshine Coast and Western Sydney.
Charles Ku, Group Financial Manager, is a qualified Chartered Accountant with nearly 20 years in assurance, financial and management accounting, treasury management, information system management and compliance across a diverse range of industries including Government, manufacturing, logistics, not-for-profit and financial services.
Susan and Charles are supported by members of the Executive Team, the Avestix Advisory Council (business leaders and experts providing strategic oversight to the Group), the Investment Committee (Impact Property Fund oversight), and an experienced Finance and Development Team who will undertake project assessments (including engineers, project managers and building professionals).