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Which Fund Structure Is right For You?

The single biggest difference between a pooled mortgage fund and a contributory mortgage fund is that in a pooled mortgage fund an investor’s capital and income return is tied collectively to the performance of a diversfied pool of mortgages whereas in a contributory mortgage fund an investor’s capital and income return is tied exclusively to the performance of the specific loan (or loans) in which they select to invest.

The table below contrasts the key structural elements of the KC Diversified Income Fund and the
KC Select Income Fund.

KC Diversified Income FundKC Select Income Fund
Investment
Type
Pooled mortgage fund.Contributory mortgage fund.
Mortgage TypesFirst mortgages loans only.First or second mortgages loans.
Investor
Suitablity
This Fund is designed for investors who want
a passive investment experience with their
funds invested in a diversified pool of first
mortage loans.
This Fund is designed for investors who want to
take an active and self-directed interest in which
underlying first or second mortgage loan(s) their
funds are invested.
Risk / ReturnAll investor share equally, according to their
relative proportional interest in the Fund, to
all of the mortgages within the pool.
As an investor in the fund your income return as
well as return of capital are directly linked to the
specific loan(s) that you select.
Minimum
Investment
$25,000 in the fund.$25,000 in the fund, $25,000 per loan.
Income
Distributions
Income distributions are generally paid
monthly in arrears to either a nominated
bank account or reinvested as additional units
in the fund.
Income distributions are paid in accordance with
the terms of the underlying loan as outlined in
the Supplementary Product Disclosure Statement
related to the specific mortgage investment.
Expected
Income
Distribution
Return
The expected income distribution return of
the Fund is between 6.75% and 7.50% p.a.
The income distributions from the Fund
are variable and subject to changes in the
Funds underlying asset base and the income
received by the Fund each month.
The expected income distribution return of the
Fund depends on the loan(s) selected by an
individual investor and the relevant borrowers
meeting their repayment obligations. Typically this
will be between 6.75% and 7.50% p.a. on first
mortgage investments and 12.00% and 14.00%
p.a. on second mortgage investments.
Investment
Term
There is no minimum term, however the
investment term is subject to Keystone
making a withdrawal offer as outlined in the
Product Disclosure Statement.
Generally 6 months to 2 years. The investment
term is directly linked to the underlying loan term
of the particular mortgage investment. The term is
outlied in the Supplementary Product Disclosure
Statement related to the mortgage investment.
Withdrawal of
Capital
Subject to liquidity, Keystone intends to
make quarterly withdrawal offers to eligible
investors. When a withdrawal offer is made,
eligible investors in the Fund are entitled to
apply for withdrawal of all or some of their
funds. Further details of the withdrawal
arrangements are contained within the
Product Disclosure Statement.
When invested in the Transitional Cash Account,
investors can withdraw their funds with 5 working
days’ notice. When invested in a specific mortgage
investment, investors cannot withdraw their funds
until the loan is repaid.


KC Investing
In Mortgages

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About

Keystone Capital Ltd is an experienced, Australian Financial Services Licenced (“AFSL”), fund manager that specialises in the origination and management of investment opportunities secured by mortgages over real property assets across Australia.

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Contact

Suite 207, 19A Boundary Street
Darlinghurst NSW 2010

Level 6, 74 Pirie Street
Adelaide SA 5000

t 08 7231 8777
e admin@keystonecapital.com.au

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