| Fund Name | Alpha Selective Investment Fund |
| Trustee | Crown Funds Management Pty Ltd (ACN 662 195 628 AFSL No 544636) |
| Investment Manager | Infinity Alpha Funds Management Pty Ltd ACN 650 954 279, a corporate authorized representative of Crown Funds Management Pty Ltd (CAR No. [001298726]). |
| The Fund | This IM relates to units in the Alpha Selective Investment Fund (the Fund), an
unlisted, unregistered Australian unit trust available only to “wholesale investors”(as defined in the Corporations Act 2001 (Cth) (Corporations Act)). |
| Unit Classes | The Fund provides Investors with the opportunity to invest in different classes of units, being Class A Units and Class B Units. The Trustee is entitled to issue further classes of units at its discretion.
To the extent that any variable described in this IM relates to more than one Class of Units, that variable will be apportioned to each Class in the same proportions as the aggregate value of the Units in that Class bears to the aggregate value of Units in all Classes to which the variable relates. |
| Investments | Class A Units will provide Investors with the opportunity to invest, through the Fund, in a loan to ICFG under the ICFG Loan Facility.
ICFG will generally use the advances under the ICFG Loan Facility to provide debt funding to one or more Borrowers for the purpose of making Authorised Investments in Portfolio Companies. The Borrowers may either acquire equity in, or provide debt funding to, the Portfolio Companies. The Investment Manager retains the discretion to apply funds invested in Class A Units to loans other than those provided under the ICFG Loan Facility. If the Investment Manager exercises this discretion, the Investment Manager will provide 30 days’ notice to Investors. Class B Units will provide Investors with the opportunity to invest, through the Fund, in loans to Borrowers under loan facility agreements entered into with the Fund from time to time. Borrowers are expected to utilise such debt funding for the purpose of making Authorised Investments in Portfolio Companies. The Borrowers may either acquire equity in, or provide debt funding to, the Portfolio Companies. |
| Target Return | The Target Return for Class A Units is 11% per annum before any fees through the economic cycle.
The Target Return is an estimate only. It is equal to the interest rate payable by ICFG under the ICFG Loan Facility. Interest received in respect of the ICFG Loan Facility will be distributed to holders of Class A Units as described in the remainder of this IM. Because interest received by the Fund will be distributed to Investors, Investors are expected to see returns in the form of income rather than capital growth. The Target Return is not a forecast and is not guaranteed. For instance, if a Portfolio Company were to default on a loan from a Borrower, this could affect the Borrower’s ability to repay ICFG, and ICFG’s ability to repay the Fund, thus impacting the returns for holders of Class A Units. There is no Target Return for Class B Units. Class B Units provide Investors with the opportunity to invest, through the Fund, in loans to Borrowers under loan facility agreements entered into with the Fund from time to time. The details of these loan facility agreements have not yet been determined. Further, the Fund may enter into additional loan facility agreements at any time as described in this IM. For these reasons, it is not possible to determine the amount of interest that the Fund will receive in respect of the loan facility agreements referable to Class B Units, or to estimate the returns or distributions that holders of Class B Units will receive as a result. Holders of Class B Units should understand that the returns of Class B Units are dependent on the terms that the Fund is able to obtain in respect of loan facility agreements entered into directly with Borrowers. As a result, the returns for Class B Units are expected to fluctuate more than those of Class A Units. Neither the Trustee nor the Investment Manager guarantees any rate of return, or that the Fund will be able to enter into loan facility agreements on favourable terms or at all. Investors who invest in Class B Units do so at their own risk, and acknowledge that there is a chance that they will lose all or a portion of their invested capital. |
| Who can invest in the Fund? | The Offer is only available to “wholesale clients” within the meaning of the Corporations Act (Wholesale Clients), meaning an Investor who:
-invests $500,000 or more in the Fund; or -provides a certificate from a qualified accountant (substantially in a form provided by and available from the Trustee) that states the Investor has net assets of at least $2.5 million or has a gross income for each of the last two financial years of at least $250,000; or is a professional investor (including the holder of an Australian financial services licence, a person who controls more than $10 million or a person that is a listed entity or a related body corporate of a listed entity). The Trustee has the discretion to accept applications from people who are not Wholesale Clients, provided these people are otherwise permitted by law to participate in the Offer. The Trustee reserves the right to reject an application without providing a reason. |
| Offer Opens | 12 January 2023 |
| Offer Closes | No closing date |
| Issue Price | The issue price is $1 per Unit |
| Minimum initial investment amount | AUD 50,000, then increments of AUD 10,000 for additional investments thereafter. The Trustee has the discretion to accept amounts lower than specified. |
| Withdrawals | Investors can request to redeem their units after they have held the units for a minimum of 12 months (Minimum Term), by submitting a Withdrawal Request in such form and manner is the Trustee may determine from time to time. In order to be considered for redemption at the end of a quarter, Withdrawal Requests require notice to the Trustee at least 30 Business Days before the end of that quarter. Subject to available liquidity and the investment being held for the Minimum Term, the Trustee expects to redeem those Investors who have submitted a Withdrawal Request at the end of each quarter. Where there is insufficient liquidity to satisfy all Withdrawal Requests, Investors’ redemptions will be satisfied on a pro-rata basis each calendar quarter until all Withdrawal Requests are satisfied. Withdrawal Request Forms are available on the Trustee’s website and are required to be submitted at least 30 Business Days prior to the end of the calendar quarter from which they want to be redeemed. Under the terms of the Trust Deed, in certain situations, the Trustee is able to, among other things, suspend all redemptions or compulsorily redeem Investors where it believes that doing so is in the best interests of Investors in the Fund as a whole. The Trustee is not required to give effect to any Withdrawal Request. |
| Issue Price | The issue price is $1 per Unit |
| Recommended Investment Horizon | At least 12 months |
| Distributions | Class A Units Distributions are expected to be made monthly to holders of Class A Units. Fund distributions are limited by the amount of interest that the Fund receives under the ICFG Loan Facility To the extent that ICFG or the Borrowers realise additional proceeds in respect of Authorised Investments, ICFG or the relevant Borrower (as applicable) is entitled to deal with these proceeds in its absolute discretion subject to any agreement between the relevant parties. Class B Units For holders of Class B Units, the frequency of distributions will depend upon the terms of the loan facility agreements entered into between the Fund and Borrowers from time to time. Neither the Trustee nor the Investment Manager represents or guarantees that distributions will be paid monthly or at any other time. Distributions in respect of Class B Units are not necessarily limited by the amount of interest that the Fund receives under the loan facility agreements entered into directly with Borrowers from time to time. Holders of Class B Units may, for instance, be entitled to distributions in respect of additional proceeds realised through Authorised Investments. However, this will depend on the terms that the Fund is able to procure in its arrangements with Borrowers. Neither the Trustee nor the Investment Manager represents or guarantees that any amounts will be distributed to holders of Class B Units |
| Investment Strategy | The loans provided to Borrowers will generally be senior secured in nature. The Borrowers will then use the advances under the loans to invest in a range of Authorised Investments. Such investments may be in the form of debt funding or equity investments. It is expected that the Authorised Investments in which the Borrowers will invest will broadly include: •Investment Stream 1: Recurring revenue from mortgage management or brokerage business. •Investment Stream 2: Recurring revenue from residential and commercial property rental businesses.•Investment Stream 3: Loans to businesses or vehicles secured against a portfolio of underlying loans or receivables.•Investment Stream 4: Loans to vehicles to acquire, refinance or develop property secured against the underlying property. |
| Issue Price | The issue price is $1 per Unit |
| Minimum Investment Amount | AUD 50,000, then increments of AUD 10,000 for additional investments thereafter. The Trustee has the discretion to accept amounts lower than specified. |
| Fees | Management fee: The Manager is entitled to a management fee of 2.2% (including GST) per annum of the value of the Fund, accrued daily and payable monthly in arrears. Performance fee: Nil Entry and Exit fees: Nil Other fees: Nil |
| Taxation | Investors should obtain their own taxation and other applicable advice regarding the taxation and other fiscal status of investing in the Fund. |
| Location and custody of assets | All of the assets of the Fund will be held by the Custodian who is responsible for holding the assets of the Fund on behalf of the investors. |
Investment Objective
The Fund is an unregistered managed investment scheme which aims to help investors achieve stable income and capital appreciation with exposure to long-term sound debt investment opportunities.
Investment Strategy
The Fund is an unregistered managed investment scheme which seeks to raise funds from the issue of Units to investors for the purpose of providing funding to Borrowers. The Fund may provide such funding either indirectly, in the case of Class A Units, or directly, in the case of Class B Units.
The Fund seeks to raise funds from the issue of Class A Units for the purpose of lending such funds to ICFG under the ICFG Loan Facility.
The obligations of ICFG under the ICFG Loan Facility will be secured by a general security deed over the assets and undertakings of ICFG.
ICFG intends to provide debt funding to Borrowers using the advances that ICFG receives under the ICFG Loan Facility.
The Fund seeks to raise funds form the issue of Class B Units for the purpose of lending such funds directly to Borrowers. The characteristics of these loans, including their term, interest payable, and security arrangements, will vary depending on the loan facility terms that the Fund is able to obtain with respect to individual Borrowers.
The Borrowers are expected to be companies owned and controlled by ICFG. The loans provided to Borrowers will generally be senior secured in nature. The Borrowers will then use the advances under the loans to invest in a range of Authorised Investments. Such investments may be in the form of debt funding or equity investments. It is expected that the Authorised Investments in which the Borrowers will invest will broadly include:
The Investment Strategy outlined in this section are expected to be implemented by the Manager.
It is not expected that the Manager will seek to change the Investment Objective or Investment Strategy. However, any such changes would require Trustee approval, after consultation with the Manager, before they could be implemented. Unitholders will receive advice on any material changes via the pre-agreed sources of communication website/email.
The Manager has absolute discretion to invest as it sees fit to achieve the Investment Objective. If the Trust ceases to comply with the approved Investment Objective or Investment Strategy, or any directions or instructions from the Trustee, due to market movements, change in the nature of an investment or any other event outside the reasonable control of the Manager, then the Manager must use its reasonable endeavours to remedy the non-compliance within a reasonable period following the Manager becoming aware of the non-compliance, or longer period as permitted by the Trustee.
Key Terms
The following table summarises the key features of an investment in the Alpha Selective Investment Fund.
Investment Process
Origination
Screen investment opportunities •
01
02
Evaluation
• Macro-economic Analysis
• Valuation
• Financial Reporting Analysis
• ESG Consideration
Approval
Risk Management Committee •
Investment Committee •
Board of Directors •
03
04
Implementation
• Executing the investment strategies
Monitoring
Tracking performance in real-time •
Adjusting investment strategies•
Completing performance reporting •
05
Contact number: 02 8029 0408, 1300137599
Address: Suite 34.03/201 Elizabeth Street, Sydney NSW 2000
Email: [email protected]