We have created a unique platform to connect wholesale HNW investors with attractive private debt opportunities that are focused on servicing commercial Australian-based SMEs.
Unmatched Opportunities And Performance For The High Net Worth, Wholesale Investors and SME clients.
About BMAM & Portica’s Private Debt Opportunities:
At BMAM, we have built a strong track record in originating and executing highly commercial transactions in the SME markets offering attractive return opportunities to investors.
Through the private debt platform with Portica, we provide funding solutions for SMEs for capital raise activities, equipment finance, property acquisitions, short-term finance, property development projects across both residential and commercial real estate, and more. BMAM and Portica have assembled a highly experienced network of credit underwriters and collateral managers and have access to an extensive network of professional advisors across valuation, legal, and accounting firms.
We have developed a robust debt selection and approval process that ensures that funding is only advanced to borrowers who possess solid experience in the respective markets they serve and we only sponsor viable projects. On every transaction, our primary goal is the preservation of capital through rigorous assessment and management of risk with parallel maximisation of investment returns.
- The Portica’s Private Debt Investments (PPDI) is structured to accept investment funds from wholesale and HNW investors. PPDI’s role is to facilitate and manage lending capital to Borrowers for business or investment purposes with the obligations of those Borrowers to repay the principal together with interest and costs.
- BMAM investors derive income from the capital it invests through the receipt of monthly Distributions which are funded from interest payments made by the small and medium-sized enterprises (SME) Borrower.
- Once the private debt has matured, the loan balance is repaid, mortgages are discharged, and investment capital is returned to BMAM and its investors. Funds can be reallocated into different investments at the investor’s discretion.
- Each loan that we (Portica) financed is referred to as a ‘Sub-Fund’ and will have a Sub-Fund Information Memorandum (“SIM”).
- The Fund will provide Senior and Mezzanine Loans.
- Senior loans will be secured by a registered first mortgage over real property (‘Security Property’) provided by either the Borrowers and/or Guarantors of the loan.
- Mezzanine loans will be secured by a registered second mortgage over real property (‘Security Property’) provided by either the Borrowers and/or Guarantors of the loan.
- In certain circumstances, there will be opportunities for the Fund to structure loans over registered first and second mortgages. The specific the registered mortgages are disclosed in the SIM of the Sub Fund.
- We (Portica) manage the risk of default with the security taken from the SME Borrower and/or Guarantors. In the event of default by the SME Borrower, BMAM and its investors are expected to be repaid from the sale proceeds of the Security Property, and/ or the enforcement against the SME Borrowers and Guarantors.
- BMAM and Portica engage the services of specialist lawyers who are mortgage loan and recovery specialists to assist with this process. Our trusted partner has written over 10,000 loans in the last five years. Their loan contracts and securitisation have been tried and tested in all Australian states. They bring to our table a proven and comprehensive due diligence process to ensure our borrower credit risk is reduced as much as possible.
The Fund’s maximum exposure to any single Borrower (including their related entities) is the greater of $10,000,000 or 20% of the Fund’s total funds under management as at the date the most recent loan receives its credit committee approval.
The distribution starts from 6% per annum (this rate is dependent on the particular Sub- Fund and disclosed in the relevant SIM). The frequency of distribution is monthly deposits into your nominated bank account.
Private debt investments can represent a useful means of portfolio diversification as their performance is not closely correlated to other asset classes. BMAM and Portica can spread/diversify investments across multiple Sub-Funds with different property types, locations, returns, and terms.
LVR- Senior Debt:
LVRs will be set out in the individual Sub-Fund Information Memorandum (SIM). Portica will apply different maximum ratios to the following types of property:
- Land (residential/commercial): 60%
- Development (residential/commercial): 67% ‘as if complete’ basis
- Residential and residential investment: 75%
- Commercial property: 70%
LVR- Mezzanine Debt:
LVRs will be set out in the individual SIMs. Portica will apply different maximum ratios to the following types of property (noting that the ratios include the senior debt):
- Land (residential/commercial): 75%
- Development (residential/commercial): 80% ‘as if complete’ basis
- Residential and residential investment: 85%
- Commercial property: 80%
Note that LVRs are covenants between Portica and the Borrowers for the investors’ benefit.
There are no hidden costs, or entry or exit fees (however, early exit fees apply). All costs associated with the establishment and management of the investment are paid by the Borrower.
Distributions from the Private Debt Investments are made pre-tax and Portica is responsible for the payment of any tax associated with this income. The Fund will provide an annual income statement to our investors.
The private debt investments provide fixed and agreed-on returns to our investors. Our investment strategy includes managing liquidity and redemption terms on the fund to avoid creating volatility within the fund. To achieve this, we allocate on a fixed-term basis. Thus, once capital has been allocated to a Sub-Fund within Portica’s private debt placement and BMAM and its investors stay committed to the Mortgage or Private Debt Investment. The capital is repaid at the set redemption date and a loan terms can be a full 12 months or 24 months. On shorter private debt transactions paying distributions below 4% returns, the term can be 3 – 6 months.
The purpose of the private debt loans to be advanced to our SME clients or borrowers are predominantly for:
– Working capital;
– Debt consolidation;
– Business restructure;
– Equity release;
– Residential land subdivision;
– Commercial developments; or
Any other purpose disclosed in the Sub-Fund Information Memorandum (SIM).
All Private Debt Investments must be secured by registered first or second mortgages over real property in Australia. Independent valuations are obtained for Security Properties on each loan.
Target Loan Size:
Portica’s target loan sizes for Senior Debt Fund range from $500,000 to $10,000,000 or as specified in the Sub-Fund Information Memorandum (SIM).
Portica’s target loan sizes for Mezzanine Debt Fund range from $500,000 to $5,000,000 or as specified in the Sub-Fund Information Memorandum (SIM).
The Portica Private Debt Investments can fit the investors seeking high yield fixed-interest returns, or exposure to an alternative credit type, as well as those looking for exposure to investments secured by the property without physically purchasing a property. Discuss your needs with our financial advisers and find out how we can help.
$100,000 and in multiples of $50,000 thereafter.
The targeted loan term for Portica Senior Debt Fund ranges from 6 months to 24 months and 3 to 12 months for Portica Mezzanine Debt Fund (this term is dependent on the particular Sub-Fund and disclosed in the relevant SIM).