Investor FAQs

Australian Secure Capital Fund Ltd (ASCF) is a Brisbane based fund manager operating three retail pooled mortgage investment funds and a wholesale investment fund, ASCF Private.

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.

In 2020 ASCF Private was established to provide wholesale and sophisticated investors the opportunity to earn a higher return than possible via our retail investment funds.

We understand what investors are looking for when choosing where to invest their hard-earned funds.

Our directors have over 70 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.

Your investment in the Fund is spread across all investments made by the fund thereby reducing the risk associated with any one investment. Your money is not let directly to a particular borrower or in relation to a particular security property.

The minimum investment is $50,000 and 6 months is the minimum term.

A maximum investment limit of $250,000 applies to all 6-month investment terms in the ASCF Private Fund.

There is no maximum investment limit on 12, 18 or 24-month investment terms.

There are no entry or exit fees, and the distributions payable to you are net of all fund costs and management fees.

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 ASCF Private Fund 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 Fund were to incur a loss 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.

Please note your loss may be mitigated by the application of the Investor Reserve Account or the Spread Protection benefit, both of which apply to this fund.

ASCF has established a discretionary Investor Reserve Account to be used for the sole benefit of Investors in the Fund. The Investor Reserve Account is held by ASCF and does not form part of the Fund’s assets.

The decision to use money held in the Investor Reserve Account is in the sole discretion of ASCF 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.

An impairment would be offset by the recognition of charge offs against investment management fees due to ASCF. The charge offs are crystallised as a reduction in investment management fees due to ASCF at the same time as the shortfall on the investment is crystallised. This would then be funded from the Investor Reserve maintained by ASCF to offset credit risk presuming there are adequate funds available in the account to cover the impairment.

ASCF 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 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 either Fund, fund expenses that would ordinarily be payable by the Fund’s 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.

In addition to the ability to use the Investor Reserve Account, ASCF Private Fund also offers its Investors the benefit of spread protection should an impairment or capital loss on an investment occur. This is an added measure of capital protection offered for the ASCF Private Fund.

The spread is the difference between the monthly income received by the ASCF Private Fund in interest payments on investments less the amount paid to Investors in the ASCF Private Fund in Distribution Payments. The spread is used to cover ASCF Private Fund’s expenses and ASCF’s performance fees.

In the event a capital loss is declared on a mortgage investment by ASCF in respect of the ASCF Private Fund and the value of the Investor Reserve Account is insufficient to make good the loss at the time the loss is declared, then ASCF shall use any accrued performance fees owing to it from the ASCF Private Fund on an ongoing basis until such time as the value of the Units in the ASCF Private Fund which may have decreased as a result of such loss are returned to their same value prior to the loss being declared. ASCF shall not be entitled to any performance fees from the ASCF Private 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.

Example:

Loan Book Value – $20,000,000

Earnings from investments

– Average interest rate received by Fund – 10.00% per annum.
– Annual Interest Received by Fund – $2,000,000 per annum
– Monthly Interest Received by Fund – Approx. $166,666 per month

Distributions Paid to Our Investors

– Average distribution rate – 8.09%* per annum.
– Annual Distributions Paid to Investors – $1,618,000 per annum
– Monthly Distributions Paid to Investors – Approx. $134,833 per month

Distribution Spread

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 $2,000,000 minus distributions paid to investors $1,618,000.

The Annual Distribution Spread in this example is $382,000 less fund expenses such as audit, legal and accounting fees.

Monthly Distribution Spread is, therefore, $31,833 less expenses.

This example provides approximately $31,833 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.

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. Our location is Suite 6C, 33 Park Road, Milton Qld. 4064.

Click here for instructions on how to apply.

If you need help with your application, please let us know and we can assist you.

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 the issuing authorities in Australia.

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.

When having documents certified, you should show the original document to the certifier.

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.