GPS Invest Private Fund

GPS Investment Fund (GPS), in various forms, has been involved in the management of Mortgage Funds since 1994. Over that time, we have developed a niche market for funding residential construction and development projects in South East Queensland, exclusively through Registered First Mortgages.

The GPS Invest Private Fund (“the Fund”) invests with other funds managed by GPS, as joint lenders, in a range of GPS-sourced and managed loans. As an Investor in the Fund, your monies are spread across investments in the GPS portfolio.

The Fund’s objective is to provide Investors with a stable and predictable monthly income. The Fund is designed for medium to long-term Investors who want to maximise returns with GPS loans. This is achieved by a number of mechanisms which include:

1. The amount of funds held in cash will be minimised. The greater the percentage of the Fund working in loans, the better the potential return; and
2. Less downtime between investments.

There are some features of the Fund you should understand before investing.

The Fund, which is a pooled fund mortgage investment, works in the following way:

• GPS sources Borrowers who will offer the Fund registered First Mortgage security over acceptable real estate properties and satisfy other lending criteria as defined by GPS lending guidelines.
• GPS raises funds through Investors like you who pool their money in the Fund, which is then invested on their behalf in a number of registered First Mortgages.
• The Borrowers pay monthly interest to the Fund for the use of the Fund’s money.
• Where GPS determines there is an amount available for Distribution, Investors receive a Distribution sourced from interest paid by Borrowers or capital. The historical Distribution rate of the Fund will be communicated to Investors via their monthly Investment Statement. However, future Distribution rates may differ from historical Distribution rates and Investors should not consider the historical Distribution rate as a guarantee or assurance of future Distribution rates.
• Under normal operating circumstances, the Fund management fee is paid to GPS from revenue (the difference between interest paid by Borrowers and Distributions paid to Investors) and GPS pays day-to-day expenses incurred in operating the Fund from its management fees.

The key fundamentals of the Fund investment strategy include:

• investing in registered First Mortgages and cash held in Australian banks;
• no related party lending;
• independent, expert valuations obtained before settlement;
• properties only located in South East Queensland; and
• maximum loan limits to avoid exposure to single loans, secured property types or any one Borrower.

The GPS Group have been writing loans similar to those in which the Fund will invest since it was founded in 1994. GPS has built on its history and experience in the mortgage lending industry to develop proven, robust processes and policies in the key areas of:

• mortgage origination and assessment;
• legal documentation and loan settlement;
• ongoing management; and
• default management.

The Fund will invest exclusively in registered First Mortgage loans over predominately residential but also limited non-residential property in South East Queensland, and cash held in Australian banks. The Fund will lend predominately for residential but also limited non-residential construction and development projects We will only take a First Mortgage position as the Fund’s primary security. However, the Fund and other funds managed by GPS may make a loan to the same Borrower. In such a circumstance, the funds may be joint lenders with the loan secured by a joint First Mortgage.

The policies of GPS in the following key areas are:

• the maximum loan amount for any one loan will not exceed $15,000,000 without approval from the GPS Board;
• the Borrower’s capacity to service loans will be assessed by provision and analysis of suitable financial records which either provide evidence that interest payments can be met when and as they fall due or interest for the loan term will be capitalised within the loan amount;
• when the loan is renewed as a result of it exceeding its initial term, the loan will be reassessed as if it was a new loan, including obtaining an updated valuation of the secured property, if considered necessary;
• security properties will consist of residential and non-residential properties in South East Queensland. All loans made by the Fund are secured by registered First Mortgage over real property. Security properties need not be income producing; and
• there is currently no intention for the Fund to invest in other unlisted mortgage schemes.

This is a non-liquid fund. GPS has taken this course for two main reasons:

1. A major cause of other pooled fund mortgage scheme failures was the mismatching of investment to loan terms. A liquid fund allows for short-term withdrawal time frames but many of those funds were secured in long-term mortgages. Where there is a loss of confidence by Investors, there can be a “run” on a liquid fund. This would necessitate closure of the Fund and could lead to the appointment of external administrators. History has shown us that this achieves poor results.
2. A non-liquid fund is designed to facilitate a rational wind-up should there be a loss of Investor confidence. By restricting the amount of moneys held in cash to meet Withdrawal Rights there is a greater percentage of funds invested in mortgages which assists in increasing the Distribution rate.

GPS puts aside an amount of cash each calendar month to facilitate the making of a Withdrawal Offer to Investors. If the amount of the Withdrawal Requests from Investors exceeds that available under the Withdrawal Offer, then each Investor is paid pari passu (pro-rata).

The Directors of GPS will endeavour to make more funds available for withdrawal in the following calendar month if there is a shortfall, but this will depend upon the loan payouts in that period.

Click here to see our projects (current and completed).

GPS does not charge fees to Investors. GPS Development Finance Pty Ltd or GPS Investment Fund Ltd are rewarded for their efforts by receiving a variety of fees all paid for by the Borrower such as Application, Loan Monitoring, Line Fees and the differential between interest paid by the Borrower and interest paid to Investors.

The fees we earn are not taken off the indicative Distribution rate paid to Investors.

GPS has always met our objective of delivering investments that provide a regular income to Investors. We work hard to make sure that monthly interest is paid in a timely manner and apply our best endeavours to ensure, where possible, that withdrawal requests are fully met.

The Pooled Platinum Fund (ARSN: 605 008 535) (“the Fund”) Investment Memorandum (“IM”) is issued by GPS Investment Fund Limited (ABN: 40 145 378 383) (AFSL: 383080) (“GPS”). This document may contain general advice which does not consider any particular person’s objectives, financial situation or needs. GPS is not licensed to provide financial product advice about the Fund, so you should obtain and read the IM prior to making a decision to invest. The IM for the Fund is available at info@gpsinvest.com.au, or by calling 1800 999 109. You should also consider obtaining professional financial advice before making an investment decision. Cooling-off periods do not apply to the Fund. Past performance is not a reliable indicator of future performance. An investment in the Fund has risk, can fluctuate in value, may achieve lower than expected returns, is not a bank deposit, is not guaranteed and investors risk losing some or all of their principal investment.

Distributions, if any, will generally be paid monthly. The Fund has limited withdrawal rights. Withdrawal offers will generally be made quarterly, subject to available liquidity. Refer to the relevant IM for more details.