LongView SE Investment Trust
Invest in a portfolio of family homes. (For Wholesale Investors Only)
LongView SE Investment Trust offers investors a unique opportunity to capitalise on Australia's housing affordability crisis.
By partnering with homebuyers through shared equity arrangements, the Fund aims to deliver superior returns while addressing a critical social issue. Leveraging deep property expertise and data-driven investment strategies, LongView seeks to outperform the broader residential property market.
Investors can expect quarterly distributions and a target return of 12-16%, with a focus on medium to long-term wealth generation.
Housing affordability is a large and growing problem for a significant proportion of the Australian population.
The Manager estimates that the time taken to save the deposit required to buy a home has increased over time and is now typically over a decade. This timeframe makes home ownership increasingly inaccessible for those without assistance from Governments or the “bank of Mum and Dad”.
In broad terms, shared equity is where a homebuyer shares the capital cost of purchasing a home with an equity partner, thereby allowing the homebuyer an ability to purchase a better home sooner.
The LongView Buying Boost Product is a form of shared equity designed to bridge the home affordability gap for those who don’t have access to the “bank of Mum and Dad” and are not eligible for Government schemes.
The Manager expects that a large proportion of its Clients will be migrants, children of migrants, sole parents and children of sole parents, children of renters and “re-builders” who have, at one time, owned a home but have lost the home (or it has been diminished) through divorce, disability or business failure.
The Manager considers that there is a strong social benefit in enabling secure housing for all such cohorts.
The LongView HomeFlex Product is an equity release solution that provides Clients with funds without the need to sell their home or incur additional monthly repayments.
This innovative approach supports homeowners facing mortgage challenges, assists parents in aiding their children's home purchases, offers a financial lifeline during a divorce, and empowers business owners with capital to invest in their ventures, all while enabling access to cash without the need to sell their home.
The Fund will co-invest with its Clients in selected Australian residential property primarily via the LongView Shared Equity Products (which will be offered on behalf of the Fund by the Sub Trustee and the Sub Trust Entity).
The Manager believes that shared equity co-investment has advantages for investors over direct investment in residential property, including that the Manager expects investors can achieve higher returns than would be achieved by direct investment in the exact same properties.
LongView has a combination of deep field expertise in buying individual properties, data science to evaluate properties and to guide portfolio balance and risk mitigation, and innovative financial structuring capabilities.
Careful asset selection by the Manager is expected to result in a portfolio of investments which outperforms the Australian residential property market in capital growth.
The Fund is seeking a target return (net of fees and Fund expenses) of 1.7 - 2.1 times the Melbourne, Brisbane and Sydney residential housing price average growth rate over the life of the investments. If those markets deliver capital growth at the long-term historical rates of 7.0-7.6% this would translate to a rate of return (net of fees and expenses) of 12-16%.
The Manager expects a shared equity co-investment model to be best suited for investors seeking absolute wealth generation over the medium to long-term.
Key Points
- Property in Melbourne and Sydney has roughly doubled every 10 years for many years – those who have bought family homes have likely made strong returns.
- Fund invests in well-located family homes in Sydney, Melbourne and Brisbane.
- Target fund investment is 10% of property value for 33% of future capital growth.
- This mechanism aims to deliver 1.7-2.1x market CAGR (for 12-16% IRR based on7.2% CAGR in assets invested).
- Deployment is via two in-market products:
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- Buying Boost which enables homebuyers without access to ‘Bank of Mum and Dad’ to increase their buying power.
- HomeFlex which provides equity release to homeowners with approved properties.
- Funds deployment is selective: only 12% of properties screened are approved for investment.
- 42 properties approved for investment to date at total value $80m ($7.7m invested) at 36% average share of capital growth. Currently deploying ~$2m / capital per month with capacity to increase run rate.
The Fund aims to achieve its investment objective by offering the LongView Buying Boost Product and the LongView HomeFlex Product to homebuyers and homeowners (respectively) of diversified Australian residential real estate which the Manager expects to appreciate in value.
The Manager believes the Fund’s investment strategy will achieve the investment objective for the following reasons:
- the capital growth attributes of existing Australian residential property as an asset class;
- the Manager’s systems and processes for selecting properties have been designed to result in any capital growth in those properties outperforming the average for the asset class;
- there are structural advantages of investing through shared equity rather than directly investing in these properties (in particular access to the typically higher leverage usually available to owner occupiers than to investors and to the exemption from land tax for a principal private residence); and
- the Fund will provide investors exposure to a diversified Australian residential property portfolio via the Shared Equity Products being provided to a range of consumers.
Social impact
Based on the minimum subscription amount, the Manager anticipates the Fund will provide funding to more than 100 families to secure home ownership.
The Manager anticipates that a material proportion of these families may be the first generation of their family to enter home ownership.
Redemptions / withdrawals
Investors have a right to request redemptions, but such requests will always be subject to the Trustee’s discretion (as set out in the terms of the Trust Deed).
Alternatively, the Manager proposes to facilitate liquidity through enabling secondary market transfers of Units in the Fund after a two year lock-up period. Further details are set out in Section 9 of this Information Memorandum.
By co-investing in the equity with the homeowner, the Fund shares in the levered equity returns and land tax exemption of home buyers.
Shared Equity Contract Example - Individual Property
The LongView Group is an integrated residential property business focused on equity returns to investors and solutions to housing problems for homeowners and renters.
Having been in operation for 7 years, LongView’s field operations have grown to include management of 4,300 rental properties and buying advisory with professional buyers’ advisors who have bought thousands of homes for clients.
With LongView’s field, facts and finance capabilities, LongView considers it is ideally placed to broaden its business by offering a shared equity and funds management capability.
About the Manager
The Manager, LongView Funds Management Pty Ltd, is a 100% subsidiary of LongView’s parent company SBDO PM Holdings Pty Ltd.
The Manager brings together a diverse group of highly skilled professionals with decades of experience in residential property investment, professional services, funds management and start-ups in Australia and overseas to deliver on the opportunity outlined in this Information Memorandum.
In addition to acting as investment manager for the Fund, the Manager has also been appointed as the operational manager of the LongView Shared Equity Trust (Underlying Fund) and LongView SE Management Qld Pty Ltd (Sub-Trust Entity). The Underlying Fund will directly engage and contract with Clients of the LongView Shared Equity Products and will provide day-to-day operational support to Clients (such as bidding at auction or negotiating the purchase price of the home). Similarly, the Sub-Trust Entity has been established to specifically contract with Clients who wish to purchase homes in Queensland (this is due to specific stamp duty and other tax considerations). The Manager will provide the same operational services to the Sub-Trust Entity as it provides to the Underlying Fund.
Evan is a technology and social entrepreneur who has been a property investor for 30 years in Australia and the US. For the last 7 years he has been consumed with seeking solutions to Australia’s housing problems and started learning from the ground up – building a firm focused on buying and managing investment grade residential property. LongView has grown to become a recognised industry leader in residential property buying and management and is pioneering the development of a funds management industry in the existing dwelling asset class.
Evan founded and led one of the first Australian high-tech companies to achieve a NASDAQ listing and “unicorn” status – and a peak market value of $14.2 billion. He was Co-Founder &CEO of LookSmart Ltd from 1995 to 2002, a pioneer of internet search advertising that returned venture capital investors 100 times their original investment. Evan was a co-founder of GoodStart – Australia’s largest social venture and the worlds’ largest early childhood education provider.
Evan was personally recruited by Premier Steve Bracks of Victoria to be his Parliamentary Secretary, where he held the Innovation portfolio and added Federal/State Relations under Premier John Brumby. He was Secretary of the Parliamentary Friends of Israel and led a trade mission to Israel in 2008. He was a co-founder of public policy think tank, Per Capita and activist network, GetUp! He began his career at McKinsey & Company in Melbourne, Kuala Lumpur & New York.
Evan is equally proud of what he’s learnt from early-stage ventures that did not succeed – including global electric car charge network pioneer, Better Place and recruiting industry disruptor, BetterView.
Evan has degrees in Law and Commerce from The University of Melbourne where he was student body President.
Evan is a member of the Investment Committee.
Antony Cohen is a globally focused Commercial Senior Executive with 28 years at the most senior levels of KPMG and is a co-founder and Head of Funds Management at LongView (previously Head of Advisory).
In addition to his role at LongView, Antony is Chair of the Trustee of the Wingate Investment Partners 3 Trust, which has more than $1 billion in funds under management. The fund invests in a diversified portfolio of secured debt, principally property related, with contractually determined outcomes.
Antony was a senior partner at KPMG and held positions including Head of Valuations, Head of Mergers &Acquisitions, Head of Industry Restructuring & Privatisation, Head of Energy &Natural Resources and a member of the National Board.
Antony departed KPMG and spent three years at Better Place – a global electric vehicle recharge network operator – initially as the CFO for the Australian business, and subsequently as CEO.
He was also a non-executive director of Unified Healthcare Group until a successful exit for its founders in 2019, non-executive director of QuickFee until its successful exit by IPO in 2019 and continues to act as a Board member and independent committee member for a number of Wingate Finance group businesses and as an advisor to the CEO of a large family office.
Antony has a Bachelor of Applied Science (Metallurgy) from Melbourne University and is a Chartered Accountant.
Antony is a member of the Investment Committee
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House prices have doubled (source) roughly every 10 years for many decades in Melbourne and Sydney.
The Fund:
- invests in properties that are expected by the Manager to have better than average capital growth,
- co-invests in these properties alongside homeowners allowing it to benefit from the advantages owner occupiers enjoy that direct property investors do not
- consequently we project the Fund’s returns will be higher than the property market index – which has grown 7%pa on average.
When you have a traditional direct investment in property, you can only access capital growth when you sell. Through the Fund, your money is invested for 10 years with quarterly returns to investors forecast after the first 2 years. Our modeling suggests that cash paid by the Fund from year 3 onwards will be about 15% of the original investment then rising every year to year 10.
Our focus is capital growth, so we have professional buyer’s advocates backed by data science selecting properties that, in our opinion, are most likely to get above average capital growth across Melbourne, Sydney and Southeast Queensland. We only buy what we believe are good family homes in the $800k-3m price range in good locations. We won’t buy any high-rise apartments or off-the-plan properties.
The Fund is only open to investment by “Wholesale Investors” (as defined in the Corporations Act) - your accountant can tell you if you are eligible. In essence, to qualify as a wholesale client, an investor must: a) Have net assets of at least $2.5 million including your family home; or b) Have a gross income for each of the past 2 financial years of at least $250,000.
The Fund is designed to make money with homebuyers or homeowners by co-investing with them as part of the deposit or equity in exchange for a share of their capital growth when they sell or buy the Fund out. The Fund only makes money when homebuyers and homeowners make money. It gives Australians who don’t have the “Bank of Mum and Dad” the opportunity to buy a better home, sooner.
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This offer of scheme interests is available to wholesale clients only. 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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