Payton Select Investment Fund
To provide investors with regular income and capital stability, through a selection of investments into mortgage backed loans with a short duration. (Wholesale Investors Only)
The Payton Select Investment Fund aims to provide Members with competitive interest rate investments that have the capacity to generate a regular income stream, whilst also allowing Members to choose the investment that best suits their needs, depending on their personal circumstances and requirements.
The Fund offers investments in Loans, which are secured by first, second or subsequent registered and unregistered Mortgages over legal interests in real property in Australia.
Each Loan approved by Payton is linked to a separate Class of Units in the Fund. Security Property may consist of residential, commercial, industrial or rural land and the term of the Loan will typically range from three (3) months to two (2) years.
Each Member can invest their funds in one or more Loans. As the Fund is not a “pooled fund”, a Member's entitlement to income or capital is based only on their investment in a specific Loan and Members have no right to the income or capital of other Loans.
Upon receipt of an Investor Direction and allocation of funds to a Loan there is no cooling off period and Members have no right to withdraw funds from a Loan. Funds will be repaid initial investment on maturity.
The Fund offers five investment products, each product offering a different return relative to risk.
- Capital Secure
- Capital Stable
- Balanced
- Growth
- High Yield
The typical return for each investment option is outlined below:
The amount of money lent under a particular Loan will always be equal to or less than the following prescribed LVR limits (excluding GST):
- 65% for First Mortgages;
- 75% for Second or Subsequent Mortgages on improved property; and
- 80% of “As if complete” value, or 90% of total development cost on a construction or development loan. NB: for second mortgage construction loans where interest is payable at maturity, the 80% LVR relates to capital only.
The Fund will typically invest in Loans secured by residential, metropolitan property. However, the Fund may invest in Loans secured by retail, office, commercial, industrial, hotel / short stay, student accommodation or rural property from time to time. The relevant Mortgage may be a First Ranking Mortgage or a Second or Subsequent Ranking Mortgage.
A First Ranking Mortgage provides a higher level of security than a Second or Subsequent Ranking Mortgage as it has priority in relation to repayments of interest and principal. As a means of compensating a Member for the higher risk associated with a Second or Subsequent Ranking Mortgage, a higher interest rate will usually be applicable to Loans with this type of security.
Payton charges fees for operating the Fund, including a trustee fee of up to 5% per annum of the total amounts which have been advanced to Borrowers.
Currently Payton charges 1.0% - 1.5% per annum for first ranking mortgages and 1.5% - 2.0% per annum for second and subsequent mortgages.
Payton and its related bodies corporate also receive fees from Borrowers
There are no Fund entry and exit fees.
Since inception, the weighted average return of the Select Fund has been 11.9% per annum (to 31 December 2020).
The performance of each of the Fund’s product is outlined below:
Payton is a privately held Australian fund manager that specialises in:
- the origination and management of loans secured by registered mortgages over Australian commercial real estate; and
- the delivery of premium, risk-adjusted investment products for domestic and offshore wholesale investors.
Founded in 1966, Payton’s origins are as an accounting practice and finance broking business. Recognising the opportunity in Australian commercial real estate debt, in 2010 Payton restructured to become an investment manager. Due to the continued growth in this sector, Payton launched its first contributory mortgage fund, the Payton Select Investment Fund, in 2018 (the “Select Fund”).
Payton’s Board of Directors, senior management and Investment Committee bring together in excess of 200 years of relevant experience in funds management, property development, banking, law, valuation, and commercial mortgage lending.
Based in Melbourne, Payton works with a national network of property and investor clients, and presently has active involvement in transactions across the eastern seaboard of Australia. Since becoming a Fund Manager, Payton has funded over $1bn in developments.
Payton Funds Management Pty Ltd ("PFM") is the Trustee of the Fund and a wholly owned subsidiary of Payton Capital Ltd. In its role as the Trustee of the Fund, PFM will ensure the Fund assets are managed and dealt with in accordance with the Trust Deed, this Information Memorandum, and the Corporations Act.
PFM holds Australian Financial Services License (“AFSL”) number 284280 issued by the Australian Securities and Investments Commission (“ASIC”).
Andrew is a career investment banker now using his finance and investment skills for the social sector. Following 26-years of venture capital, development capital, mergers and acquisitions, building and listing large specialist investment funds and private equity, Andrew has spent the last 12 years focused on developing impact investment opportunities and advising Foundations and Governments on aligning strategic investment with values.
Andrew holds an Honour Bachelor of Commerce and is a Fulbright Professional Scholar.
David has worked in the financial services sector for over 20 years. He has been an investment adviser with Lend Lease and Lifespan, and prior to Payton was Dealer Principal and Head of Funds Management for a large not-for-profit organisation. In these roles David established financial planning and lending businesses including the creation of wholesale commercial mortgage portfolios with Westpac and ANCU.
David holds a Bachelor of Business, Diploma of Financial Services, Diploma of Finance and is a member of the Financial Planning Association.
Rob has worked in the property industry for the past 25 years. Rob pioneered Market-Line Property Valuers, which is now (post-merger with Opteon) the largest valuer in Victoria. Rob has extensive experience in industrial and commercial property, and provides valuable in-house property expertise.
Rob holds a diploma and post graduate qualifications in property, and is a certified property valuer and retail specialist as defined in the Retail Leases Act.
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