Lambert Capital Property Credit Fund
The Fund’s strategy is to provide strong risk adjusted returns by providing loan facilities for property investment & development in major cities with a primary focus on residential & commercial projects throughout Australia -For Wholesale Investors Only
Investment Objective
The investment objective of the Fund is to provide Investors with strong risk adjusted returns by providing loan facilities for property investment and development. Locations will be mainly in major Australian cities with a strong focus on the Melbourne metropolitan area as well as key Victorian regions and secured by a first mortgage across a variety of real estate asset classes.
The Fund will seek to achieve this objective by generally lending to special purpose vehicles that will be investing in loans originated by Lambert Capital and managed by the Investment Manager. In addition to first mortgage loans, the Loans may include second mortgage loans and other loans of a similar or related nature with property mortgage or caveat security and other money market investments.
Upon maturity of the Loans, the Fund is repaid capital which will be recycled. The Fund also aims to provide cash distributions to Investors on a half yearly basis in accordance with the distribution policy for the Fund.
The partners, directors, staff and associated entities of Lambert Capital will personally invest in investments of the Fund via the Fund and/or alongside the Fund by investing into the same special purpose vehicle as the Fund. The co-investment value is intended to be a minimum of $20 Million.
While the above reflects the Trustee’s current intentions, it may change the model (in any way it wishes) so that it does not necessarily lend to the SPVs but may, for example, lend directly to the ultimate borrower.
All subscription money received from Investors will be pooled together and invested collectively, and applied by the Trustee for the making of Loans. No individual has a beneficial interest in any particular Loan or any other investment or asset of the Fund.
The Target Return is 7% - 10% IRR per annum (net of fees and costs and before tax). The IRR is the target return intended to be achieved by the Fund. The IRR is not guaranteed.
The Trustee will generally only approve investments and Loans which meet the investment selection criteria. However, the Investment Manager may change the Investment Mandate if it believes that it is appropriate to achieve the Fund’s objective.
The Fund may make Loans to or investments in third parties as well as to related parties of the Investment Manager.
Apart from Loans, the Fund will hold one or more bank accounts comprising cash money of the Fund, including principal and interest payments made under the Loans pending the distribution of net receipts to Unit Holders in accordance with the requirements of the Trust Deed.
The Trustee will generally not use derivatives for interest rate management in respect of the Loans.
The Fund will provide funding solutions for experienced developers that adhere to the Fund’s Investment Guidelines.
The Fund’s investments will include:
- First mortgage debt – secured over land, investment properties, residual stock and/ or for construction loans, typically 60-70% LVR.
- Second mortgage debt – secured over land, investment properties, residual stock and/ or for construction loans, to a maximum of 70% LVR.
- Transactions of a similar or related nature with property security.
Typically, these property credit transactions will be sourced through Lambert Capital’s existing repeat customers/clients, and less frequently supplemented via an extensive origination network including: finance brokers, corporate advisers, industry consultants, builders and developer client referrals.
The Investment Manager may decide to invest in other similar transactions in order to achieve the Fund’s investment strategy at an acceptable level of risk.
The Fund will hold any non-deployed cash in an at call account and/or term deposits with a major Australian bank or suitable proxy. It is envisaged that this will be a bare minimum for short term purposes – e.g. to take advantage of opportunistic loans/ investments, and/or to provide adequate working capital and liquidity.
The Investment Manager will rely upon Investment Guidelines which include consideration of concentration risk and appropriate limits on geographical exposure, single investment exposure, term of individual transactions, and single borrower exposure, to manage the Fund’s underlying property credit transaction risk.
Upon maturity of the underlying property credit transactions, the Fund is repaid capital which is then recycled. The Fund also aims to provide Investors with an income stream by offering half yearly distributions, subject to cashflow availability.
There is no guarantee the Fund will achieve its investment objective.
The Investment Manager will continue the proven investment due diligence process of Lambert Capital to evaluate prospective transactions.
The investment process will focus on the preservation of capital and achieving strong risk-adjusted returns. The Lambert Capital team is known for its rigorous approach to reviewing prospective transactions, performing a detailed analysis on the transaction through intensive due diligence including but not limited to feasibilities, cashflows, presentations and background research on the key sponsors and ability of the builder and key consultants involved.
The prospective property credit transaction is then presented to the Investment Committee as part of the Investment Manager’s iterative review process. The Investment Committee is responsible for critically evaluating the credit, adopting a conservative review and approach to each opportunity, and is comprised of experienced credit managers with a combined 50+ years’ direct experience.
Unanimous approval is required from the Investment Committee before a prospective property credit transaction proceeds to the structuring and loan execution phase.
Following loan execution and financial close, the property credit transaction is actively managed by the Investment Manager throughout its ordinary life cycle (typically up to 18 months) to ensure ongoing compliance with covenants and other financial conditions. The Investment Manager’s active management of the property credit transaction thorough the life cycle helps generate improved risk-adjusted returns upon repayment.
The Investment Manager adopts an “end to end” approach to managing property credit transactions, with members of the Investment Manager responsible for each phase of the underlying property credit transaction. From sourcing, reviewing and monitoring of the property credit transaction to repayment/exit, each member of the Investment Manager is responsible for the success of the Fund’s portfolio of Loans.
Lambert Capital provides funding solutions for experienced property developers/owners and excellent investment opportunities for investors.
Typical transactions that will be in the Fund:
- Loan sizes between $2 million & $20 million.
- Loan term between 12 to 18 months.
- Diversification of asset class – lower rise residential apartments, medium density townhouses and land subdivisions, with some mixed use sites incorporating other commercial & retail offerings.
- Majority secured by first mortgages and/or limited exposure to second mortgages against property.
- Clearly defined exit/loan repayment strategy.
The Lambert Capital Investment Management team will continue to uphold the following core investment principles:
- Capital preservation is a fundamental priority at all times.
- Alignment of goals between the Investment Manager and Investors.
- No pressure to take on transactions that do not fit solid credit principles.
- Small-mid market focus to differentiate its leading offering in the market.
- A steadfast discipline based on experience management and thorough due diligence.
The Lambert Capital Investment Management team has over 50 years’ direct experience in delivering above average risk adjusted returns whilst preserving and growing investors’ capital.
Lambert Capital prides itself in guaranteeing speed and certainty to borrowers, as well as open communication pathways with all stakeholders, leading to an efficient, risk mitigated and controlled process.
Lambert Capital’s team have developed expertise across diverse real estate sectors and geographic markets, investment and management of real estate debt funds, joint ventures, structured real estate finance and debt arrangement, hands on property development, project & development management, real estate advisory services and mandates.
Investments managed by Lambert Capital are typically secured by first or second mortgages against residential & commercial property within capital cities, with a strong focus on the Melbourne metropolitan area as well as key Victorian regions.
Lambert Capital has a strong track record of sourcing, settling, managing and returning principal and interest across property debt transactions. In recent years, Lambert Capital has arranged and settled over 50 loans totaling approximately $250 million, which have generated an average return to investors of 11% p.a. consistently throughout this period.
Lambert Capital adopts a diversified approach to property, not dependent on just one type of property asset. Identifying the right borrowers and development is a critical component in this strategy whilst also ensuring that the portfolio has appropriately leveraged positions backed by first and/or second mortgage security.
Lambert Capital transactions have historically been secured by first mortgages against real property. The transactions have been originated by Lambert Capital and diversified across residential apartments, medium density sites and land subdivisions with some mixed use sites incorporating other commercial offerings such as offices and retail.
The LVR distribution across Lambert Capital’s portfolio is primarily situated within the 60%-70% LVR bracket, which is consistent with acceptable lending standards for first (and indeed second) mortgage security.
Mark founded Lambert Capital in 2009, after a career spanning over 20 years as a Chartered Accountant, General Manager, Funds Manager and Banking & Finance Executive with direct property development and investment experience.
Mark is a member of the Institute of Chartered Accountants in Australia who previously held senior management roles at both ANZ and Ashe Morgan Winthrop, where he managed $300 million portfolios in corporate property and business banking.
Mark also holds a Bachelor of Commerce degree from Melbourne University (majoring in Accounting & Commercial Law), an MBA from the Melbourne Business School, and Diplomas of Financial Services and Financial Planning.
Bronson has been a long term co-investor with the Lambert Capital Group through his current role as Head of Property at Thorney Investment Group.
Since 2014, he has run the property division at Thorney, with a prime focus on private sector property investment in debt & equity projects, across all sectors.
Prior to joining Thorney, Bronson worked as a Civil Engineer for over 10 years for a top tier contractor on major projects across Victoria, Australia, and internationally on a world-class shopping centre project in London, United Kingdom.
His appointment to the Board of Lambert Capital Investment Management recognises the strategic importance and support of Thorney as a cornerstone investor in the Lambert Capital Property Credit Fund.
Bronson has a Bachelor of Engineering (Civil Engineering) from the University of Melbourne.
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