Frequently Asked Questions

What is a Wholesale Investor?

Wholesale Investors are Investors who qualify as a wholesale client or a sophisticated investor as defined in section 761G & 761GA of the Corporations Act.

To be eligible to qualify as a Wholesale Investor you must either:

  • Invest $500,000 or more with the Fund in a specific Sub-Scheme or
  • Provide a qualified accountant’s certificate (that is not more than 2 years old) confirming you either:
    1. have net assets of at least $2,500,000, or
    2. have gross income of at least $250,000 for each of the last two (2) financial years.

What is Direct Mortgage lending?

Direct Mortgage Lending is also known as private lending, corporate peer to peer lending or marketplace lending. Direct Mortgage lending removes banks as the middleman and matches Borrowers directly with Investors. Investors provide the loans to the Borrowers on commercial terms secured by mortgages over real property.

In the case of the Fund, the loans provided by Wholesale Investors to Borrowers are for short term commercial purposes only and the security offered to investors are first mortgages over real properties within Australia. The Investors decide who they want to lend their money too whilst Vertex manages the whole process on behalf of the Investors from loan assessment, initial investment to loan repayment.

How do I register to become a Member of the Fund?

To receive mortgage investment opportunities, Investors first need to join the Fund by registering to become a Member. To do this, Investors need to:

  1. Read and consider the Information Memorandum
  2. Complete and sign the Registration Form within the Information Memorandum
  3. Provide confirmation that they qualify as a Wholesale Investor
  4. Provide identification as detailed in the Information Memorandum.

Registration is free and provides no obligation to Invest in any Mortgage Investment.

Once registered as a Member of the Fund, Investors are presented with Mortgage Investments Opportunities as they become available.

How do I receive mortgage investment opportunities?

To receive mortgage investment opportunities, Investors first need to join the Fund by registering to become a Member.

Once registered as a Member of the Fund, Investors are presented with Mortgage Investments Opportunities as they become available.

Mortgage Investment Opportunities are detailed in separate Syndicate Information Memorandums issued to the registered members.

Members will receive Syndicate Information Memorandums for specific Sub-Schemes and can then apply to invest in specific Mortgage Investments of their choice.

What is an Information Memorandum?

An Information Memorandum is a document used to offer Wholesale Investors a range of financial products such as managed funds.

The Information Memorandum (IM) for the Fund provides information for Wholesale Investors to decide if they wish to register to acquire a membership interest in the Fund and should be read in its entirety.

The IM details the features, benefits, risks and general information about the Fund.

Information relating to specific mortgage investment opportunities are detailed in the relevant Syndicate Information Memorandums made available to Members of the Fund.

What is a Syndicate Information Memorandum?

A Syndicate Information Memorandum is a document that supplements the Information Memorandum and relates to specific Mortgage Investments offered the Members of the Fund. It contains credit and loan information, a copy of the valuation report and any information relating to the Mortgage Investment as Vertex determines appropriate.

To apply to invest in the specific Mortgage Investment, Investors complete and sign the Application Form contained within the Syndicate Information Memorandum.

What is a Sub-Scheme?

Each Mortgage Investment is offered through a separate managed investment scheme known as a Sub-Scheme. Each Sub-Scheme is a loan to a Borrower and has its own Investors and holds separate and distinct assets and security from each other Sub-Scheme.

Mortgage Investments contained in the Sub-Schemes are only made available to Wholesale Investors.

Investors have rights to receive income or capital distributions in relation to the Mortgage Investment in the Sub-Scheme selected and in which they are an Investor. Income and capital distributions are proportionate to their share of the total amount contributed to the Mortgage Investment in the Sub-Scheme selected.

Why aren’t borrowers going to their bank to get a loan?

In most cases, Borrowers are approaching their banks for commercial funding. However, over the past few years the banking regulators have moved to increase the banks requirement to hold significant amounts of capital in reserve. This has created cost of capital issues for the banks which has forced them to constrain lending, especially in the commercial debt sector. Even to existing clients, this has resulted in the banks being unwilling or unable to provide funding for property transactions. Any lending that is offered to clients is often on extremely tight, onerous and uncommercial terms. Banks’ lending to new clients has essentially stopped altogether. This lending constraint with the banks is not one of credit quality or risk appetite. The demand for funding and the credit quality of borrowers is unchanged.

The lending constraints together with the royal commission and the borrowers seeking a greater level of customer service has given rise to an opportunity for private funders to provide debt facilities to bank risk level borrowers at private funding pricing.

Does the Fund consider lending to credit impaired Borrowers?

No, not in any instance. The Fund only considers lending proposals to experienced property professionals who have a clean credit history and a track record of successful property transactions.

Does Vertex or the directors of Vertex invest in the Fund?

The constitution of the Fund allows for Vertex and/or the directors of Vertex to co-invest in mortgages within the Fund. If Vertex and/or the directors co-invest in a mortgage, they invest on the same terms and conditions as all other Investors. Vertex and/or its directors co-investing in a mortgage should not be viewed as a recommendation to invest and Investors should seek their own independent professional advice.

Does Vertex provide financial advice?

No. Vertex is only permitted to provide general product advice. Investors should seek their own independent financial advice before deciding to register and invest in any Sub-Scheme of the Fund.

What is the alignment of interest between the Investors and Vertex?

Vertex’s alignment of interest is simple. If investors are not getting paid, Vertex is not getting paid. This ensures that only quality transactions that meet Vertex’ stringent credit policy are offered to investors.

Does Vertex have a formal default management process?

Yes, Vertex has a formal Default Management and Loan Recovery Policy. The overarching premise of this policy is that Vertex treats the interests of our investors as the absolute priority. This includes providing regular up-dates on the status of any mortgage in recovery management to Investors. In the first instance, Vertex will work with the borrower to achieve an acceptable outcome. If an acceptable outcome is not achieved within a reasonable timeframe Vertex (through its Solicitors) will instigate formal legal proceedings on behalf of the Investors pursuant to the loan security held and if required sell the security property.

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