Aura Core Income Fund
The Aura Core Income Fund aims to preserve capital and offer stable monthly income from a diversified portfolio of predominantly small to medium enterprise loans.
Investment Highlights
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The Aura Core Income Fund (the Fund) is an open-ended unit trust that aims to preserve capital and provide regular monthly income by investing in a diversified pool of Australian private debt investments, predominantly made up of asset-backed loans to Australian small and medium-sized enterprises (SMEs).
The Fund aims to invest into a diversified pool of Australian private debt investments. Investments will be made via warehouse securitisation deals, notes or other instruments for business and consumer loans, as well as direct lending to businesses.
The Fund’s primary objective is to focus on preservation of capital as a first order of concern, followed by the provision of stable monthly cash income, and portfolio diversification by providing exposure to a portfolio of private debt assets.
The Fund aims to achieve a Target Return of the Reserve Bank of Australia (‘RBA’) Cash Rate plus 3.5%-5.5% per annum net of fees and costs, through the economic cycle.
The Fund’s total return may rise, or fall based on, amongst other things, performance in the underlying loan assets and on movements in the RBA Cash Rate. The Fund’s Target Return is only a target, and the actual return of the Fund may be lower than the Fund’s Target Return.
The Fund’s investment strategy is to provide stable monthly cash income and portfolio diversification by gaining exposure to the private debt asset class.
The Fund invests across the Australian private debt universe, primarily in diversified pools of Australian SME business loans, originated by specialist non-bank lenders.
Our criteria for selecting lenders to fund are as follows:
- All underlying loans are made to Australian SMEs.
- The lenders apply robust credit assessment and underwriting criteria to all underlying loan exposures
- The lender has a scalable business model with a robust medium-term outlook to ensure the debts will be originated and serviced to a high standard on an ongoing basis.
- The lender’s management team has a proven track record.
The following portfolio parameters have been set for the Fund:
- 0-90% invested into private debt assets.
- 5% maximum loan concentration to a single underlying loan, once the funds under management (‘FUM’) within the Fund reaches $100 million.
- 10-100% cash holdings.
The Fund is able to use derivatives to hedge interest rate risk.
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This information is provided by Montgomery Investment Management Pty Ltd (ACN 139 161 701 | AFSL 354564) (Montgomery) as authorised distributor of the Aura Core Income Fund. The Aura Core Income Fund (ARSN 658 462 652)(Fund) is issued by One Managed Investment Funds Limited (ACN 117 400 987 | AFSL 297042) (OMIFL) as responsible entity for the Fund. Aura Credit Holdings Pty Ltd (ACN 656 261 200) (ACH) is the investment manager of the Fund and operates as a Corporate Authorised Representative (CAR 1297296) of Aura Capital Pty Ltd (ACN 143 700 887 | AFSL 366230). Montgomery Investment Management Pty Ltd (ACN 139 161 701| AFSL 354564) (Montgomery) is the authorised distributor of the Fund. As authorised distributor, Montgomery is entitled to earn distribution fees paid by the investment manager and, subject to certain conditions being met, may be issued equity in the investment manager or entities associated with the investment manager. You should obtain and carefully consider the Product Disclosure Statement (PDS) and Target Market Determination (TMD) for the Aura Core Income Fund before making any decision about whether to acquire or continue to hold an interest in the Fund. Applications for units in the Fund can be made by completing an online application form. The PDS, TMD, continuous disclosure notices and relevant application form may be obtained from www.oneinvestment.com.au/auracoreincomefund or from Montgomery. Any financial product advice given is of a general nature only. The information has been provided without taking into account the investment objectives, financial situation or needs of any particular investor. Therefore, before acting on the information contained in this report you should seek professional advice and consider whether the information is appropriate in light of your objectives, financial situation and needs. Montgomery, ACH and OMIFL do not guarantee the performance of the Funds, the repayment of any capital or any rate of return. Investing in any financial product is subject to investment risk including possible loss. Past performance is not a reliable indicator of future performance. Information provided may be based on information provided by third parties that may not have been verified. Where information provided by Brett Craig, Portfolio Manager of the Fund, consists of General Advice, this is provided as an Authorised Representative (AR No. 001298683) of Montgomery.
Aura Credit Holdings Pty Ltd (ACH) is the private credit division of Aura Group.
Aura Group is a financial services business that provides wealth, funds management, and corporate advisory solutions to wholesale and sophisticated investors and institutional investors. Established in 2009, the group has over $1.5 billion (as of 31 December 2023) under advice and management and employs staff across Australia and Southeast Asia. It is privately owned by its staff members and strategic investors.
Aura Credit Holdings has a partnership with Montgomery Investment Management to distribute the Aura Core Income Fund to Australian investors and advisers.
About Montgomery Investment Management
Montgomery Investment Management has a partnership with Aura Credit Holdings to distribute the Aura Core Income Fund to Australian investors and advisers.
Founded by Roger Montgomery in 2010, Montgomery Investment Management is an Australian boutique investment manager which looks after investments on behalf of individuals, families and their advisers. Montgomery's goal is to deliver superior long-term investment outcomes for clients and their advisers - in the form of capital preservation, income and growth.
Brett is responsible for portfolio management and asset origination for the Aura Private Credit Strategies, including the Aura Core Income Fund.
Prior to joining Aura Group, Brett held a number of roles at Macquarie Group over an 11-year period including Vice President within the Debt Markets business where he focused on originating, structuring and distributing debt products primarily in the Australian market.
Brett is renowned as the first portfolio manager to originate, structure, negotiate and execute an Australian bank debt facility for an Australian alternative finance lender.
As a member the Investment Committee for the Aura Private Credit Funds, Brett spends a considerable amount of his time assessing transactions and potential investment opportunities.
Prior to the Debt Markets role Brett ran the financial management of the equity derivatives and loans book for the Metals and Energy Capital business.
Brett holds a Bachelor of Commerce from The University of Wollongong and is also a Chartered Accountant.
Brett is supported by a team of investment analysts – Brian Ho, James Chapman and Natalie Kolenda.
Roger Montgomery, Founder and Chairman, Montgomery Investment Management. Roger Montgomery founded Montgomery Investment Management in 2010. He has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking.
Roger is the author of best-selling investment book, Value.able. He is a regular contributor to LiveWire and also appears on television and radio, and in the press, including ABC’s Statewide Drive radio program, The Australian and Ausbiz.
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The Fund is aimed at retail and wholesale investors and participation is available to individuals, companies and trusts including superannuation trusts so long as they are ordinarily resident in Australia and aged 18 years or over.
This product is likely to be appropriate for a consumer seeking capital preservation or income distribution, to be used as a core component or satellite/small allocation within a portfolio where the consumer:
- Has a short, medium, or long-term investment timeframe.
- Has a low, medium, high, or very high risk/return profile.
- Does not require monthly access to capital.
The Fund is open-ended and an Australian Registered Managed Investment Scheme offered under a Product Disclosure Statement and registered with ASIC.
You can learn more in the Target Market Determination here.
The Fund aims to achieve a target return of 3.5%–5.5% per annum above the Reserve Bank of Australia (RBA) Cash Rate distributed as stable monthly income from a diversified portfolio of Australian private debt assets, predominantly made up of small to medium enterprise loans.
The Fund aims to invest in a diversified pool of Australian private debt investments. Investments will be made via warehouse securitisation deals, notes or other instruments for business and consumer loans, as well as direct lending to businesses. The Fund will target private debt investments sourced from multiple channels, including:
- Investing in funding vehicles of loan originators who target well-secured loans with low probability of default and aim to achieve higher returns on a risk-adjusted basis, than publicly traded notes of similar portfolio default and loss given default levels;
- Direct business lending opportunities; and
- Consumer lending via warehouse securitisation vehicles.
The Fund provides an opportunity for investors to benefit from the Investment Manager’s experience and extensive research and proprietary due diligence processes to target high-quality Australian non-bank lenders.
The Fund’s investment strategy is to provide stable monthly cash income and portfolio diversification by gaining exposure to the private debt asset class. The following portfolio parameters have been set for the Fund:
- 0–90% invested into private debt.
- 5% maximum loan concentration to a single underlying loan once the funds under management within the Fund reaches $100 million.
- 10–100% cash holdings.
The Fund is able to use derivatives to hedge interest rate risk.
The Fund invests across the Australian private debt universe, primarily in pools of both Australian SME business and consumer loans, originated by non-bank lenders. The criteria are as follows:
- The underlying exposures are Australian loans.
- There are processes for robust credit assessments of the underlying borrowers.
- The lender has a scalable business model with a robust medium-term outlook to ensure the debts will be originated and serviced to a high standard on an ongoing basis.
- The lender’s management team has a proven track record.
The lower return is associated with lower risk. The Aura Core Income Fund return profile is lower because the fund has taken a high-security position, which is associated with lower risk. The Aura Core Income Fund will in most cases sit in the senior credit position within the capital stack and therefore has additional security sitting below in the capital stack.
The minimum investment is $25,000 and the minimum client balance is $5,000.
Additional applications (top-ups) of $5,000 or more can be made into the Fund. The minimum additional investment amount does not apply to the reinvestment of distributions, which may be lower than this minimum. Additional investments are accepted every month and will be processed on the first business day of each month (provided your additional application is received before 12 noon Sydney time on the second last Business Day of the preceding month.)
The net asset value of the Fund will be determined monthly, and the Fund intends to distribute net income to investors each month. It is intended that all net income at the end of each month will be distributed to investors by the 10th business day of the following month and may be slightly delayed after 30 June each year.
Yes, you can elect to take distributions as follows:
- Direct deposit to a bank account in the name of the entity investing; or
- Reinvestment in the Distribution Reinvestment Plan 'DRP'. If no election is made on your application form when you invest, then distributions will automatically be reinvested in the DRP.
Statutory Statement
The issuer of this product is identified at the top of this page. The PDS and target market determination for the product are available in the Documents section of this listing. Prospective investors should consider the PDS before deciding to acquire the product. This product listing was vetted by and approved by the product issuer identified above before publishing. Investment Markets (Aust) Pty Ltd AFSL 527875 (IM) is not the issuer of the product.
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