Next units will be issued on 1 March 2023
Minimum initial investment: $25,000



Your opportunity to invest in the Aura Core Income Fund that offers stable monthly income from a diversified portfolio of predominantly small to medium enterprise loans.

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Overview

The Aura Core Income Fund (the Fund) aims to preserve capital and provide a stable monthly income through exposure to a diversified pool of Australian private debt assets, predominantly made up of small to medium enterprise loans. The net asset values of the Fund will be determined monthly, and the Fund intends to distribute net income to investors each month.

The Fund aims to achieve a target return of 3.5%–5.5% per annum above the Reserve Bank of Australia (RBA) Cash Rate, net of fees and costs, through the economic cycle. As of 7 December 2022, the RBA Cash Rate is 3.10%, equating to a current target return of 6.60%-8.60%[1] per annum net of fees and costs. The Fund’s total return may rise, or fall based on, amongst other things, performance in the underlying loan assets and on movements in the RBA Cash Rate. The Fund’s target return is only a target, and the actual return of the Fund may differ from the Fund’s target return.

The Fund aims to invest in a diversified pool of Australian private debt investments. Investments will be made via warehouse securitisation deals, notes or other instruments for business and consumer loans, as well as direct lending to businesses. The Fund provides loan finance to platforms that lend small amounts, typically over the short term to thousands of Australian SMEs across Australia. The Fund may invest in high-quality asset-backed SME loans, consumer loans via warehouse securitisation vehicles, mortgage-backed loans, and senior loans, secured against a loan portfolio that provides regular income.

By carefully analysing the merits of businesses requiring short-term loans, deep due diligence can reduce risk while offering an attractive income yield.

[1] The target net return is not guaranteed.

Why Invest

  • Aims to deliver stable and consistent monthly income.
  • Aims to perform through the economic cycle. The Aura SME High Yield Fund has demonstrated that the SME loan asset class can deliver reliable income to investors through disruptive market conditions.
  • Returns are earned from interest generally charged at a floating rate above the RBA Cash Rate.
  • Low volatility and little correlation to public markets.
  • Exposure to the private debt asset class, that individual retail investors cannot easily access on their own.
  • Access to the investment expertise behind the highly successful wholesale-only Aura High Yield SME Fund (currently available to wholesale clients only).
  • A diversified portfolio of credit exposures across industries and geographies.

Fund Profile

Style Income
Benchmark RBA Cash Rate plus 3.5% - 5.5% per annum
Fund fact sheet Download

Montgomery Investment Management has a Distribution Partnership with Aura Credit Holdings Pty Ltd, a subsidiary of Aura Group.

Investment Manager

Investment Manager: Aura Credit Holdings

Brett Craig is both Portfolio Manager and Managing Director of Aura Credit Holdings Pty Ltd.

Founded in Australia in 2009, Aura Group has more than 1.3 billion under advice and management as of August 2022, employs over 100 staff across the Asia-Pacific region and is privately owned by staff members and strategic investors.

 

WEBINAR

In this webinar recording Brett Craig introduced private credit as an asset class for investors seeking income. Brett and his team have a proven track record in SME debt strategies, even throughout periods of asset price volatility, preserving investor capital and delivering on the strategy’s monthly income objective. This highlights the key role private credit can play in an investor’s portfolio during uncertain times. You can watch the recording here.

About the fund See all videos

 

Introducing private credit

In this video, Brett Craig and Roger Montgomery introduce private credit, the opportunity it offers for stable monthly income while preserving capital, why SMEs seek funding outside of the main banks, where the Aura Core Income Fund invests and how it makes a return for investors.

 

The impact of rising interest rates and inflation

In this video, Brett Craig explains the likely impact of rising interest rates, inflation, the possibility of a recession on small to medium enterprise businesses. Brett discusses why the Aura Core Income Fund has a preference for SMEs that have strong balance sheets, strong cash flows and a management team who are looking for funding for growth and profit initiatives.

RATINGS

The Aura Core Income Fund has been graded by Foresight Analytics as Very Strong.

Performance

Comparative Returns Since Inception to 31/12/2022 (After all fees)

PERFORMANCE CHART
LATEST UNIT PRICE
FUND PERFORMANCE
INCOME DISTRIBUTION
  Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun
2022/23        1.00  1.00  1.00            

Source: Aura Core Income Fund. The Fund’s inception date is October 2022. Past performance is not a reliable indicator of future performance.

Fund Performance

  Aura Core Income Fund RBA cash
1 month 0.53% 0.26%
3 months 1.51% 0.72%
6 months - -
12 months - -
Since Inception 1.51% 0.72%
Compounded Annual Return - -

Note: Performance net of fees and expenses. Returns assume reinvestment of all distributions. Past performance is not an indicator of future performance.
The cumulative return is the total return since inception and assumes reinvestment of all distributions.
1. Inception date: 4 October 2022.

Aura Funds Management has distributed the following income since inception:

  Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun
2022/23       0.44%   0.53%  0.53%            

Aura Funds Management may also notify investors from time to time that investors may participate in an arrangement to re-invest their distributions into new Units of the Fund. There may be periods when net income could be negative, and no distribution is made. 

The Aura Core Income Fund (ARSN 658 462 652)(Fund) is issued by One Managed Investment Funds Limited (ACN 117 400 987 | AFSL 297042) (OMIFL) as responsible entity for the Fund. Aura Credit Holdings Pty Ltd (ACN 656 261 200) (ACH) is the investment manager of the Fund and operates as a Corporate Authorised Representative (CAR 1297296) of Aura Capital Pty Ltd (ACN 143 700 887 | AFSL 366230). Montgomery Investment Management Pty Ltd (ACN 139 161 701| AFSL 354564) (Montgomery) is the authorised distributor of the Fund. As authorised distributor, Montgomery is entitled to earn distribution fees paid by the investment manager and, subject to certain conditions being met, may be issued equity in the investment manager or entities associated with the investment manager.  

You should obtain and carefully consider the Product Disclosure Statement (PDS) and Target Market Determination (TMD) for the Fund before making any decision about whether to acquire, or continue to hold, an interest in the Fund. Applications for units in the Fund can only be made through a valid paper or online application form accompanying the PDS. The PDS, TMD, continuous disclosure notices and relevant application form are available to download from this page or from the responsible entity: One Managed Investment Funds Limited

Any financial product advice given is of a general nature only. The information has been provided without taking into account the investment objectives, financial situation or needs of any particular investor. Therefore, before acting on the information contained in this report you should seek professional advice and consider whether the information is appropriate in light of your objectives, financial situation and needs.  

ACH, Montgomery and OMIFL do not guarantee the performance of the Fund, the repayment of any capital or any rate of return. Investing in any financial product is subject to investment risk including possible loss. Past performance is not a reliable indicator of future performance. Information in this report may be based on information provided by third parties that may not have been verified.

Where information provided by Brett Craig, Portfolio Manager of the Fund, consists of General Advice, this is provided as an Authorised Representative (AR No. 001298683) of Montgomery. 

Investment Team

The underlying investment philosophy of Aura Group’s Private Credit division is to drive active strategies that provide strong regular income. The team maintains a focus on capital preservation through counterparty selection, deal structuring, asset security, diversification, and portfolio construction. The investment team comprises of seasoned professionals with skills and experience to deliver opportunities across the risk spectrum, driving risk-adjusted returns for our investors.

Brett Craig is the Portfolio Manager of the Aura Core Income Fund and is supported by investment analysts James Chapman and Natalie Kolenda.

Brett Craig leads the daily management of the Fund.

Meet our people

Brett Craig

Head of Credit Funds
Read Bio +

HOW TO INVEST

After accessing the Product Disclosure Statement and Target Market Determination and reading in full the investment objectives and risks of investing in the Aura Core Income Fund:

1

Complete the online application form at Olivia 123 and ID verification online (approx. 10 minutes)

2

Submit the completed application form to the Administrator online

3

Transfer the funds and an investment confirmation will be issued by the Administrator

If you wish to make an additional investment (top-up) an existing investment in the Aura Core Income Fund, please see the instructions here.

NOT READY TO INVEST YET?

Download the fund information pack or if you would prefer to talk it over, call David Buckland or Toby Roberts on 02 8046 5000 to discuss the Aura Core Income Fund in more detail.

Insights Subscribe to insights

January 30, 2023

A $9 billion Opportunity for Non-bank SME Lenders

By Brett Craig

The conclusion of the Term Funding Facility and conclusion of the Federal Government Coronavirus SME Guarantee Scheme means approximately $9 billion1 of SME credit will require refinancing by Australian non-bank lenders over 2023 and 2024. Recent Trends in SME Credit Commencing in 2014, growth in ADIs (typically referred to as ‘banks’) lending to SME businesses plateaued considerably.
January 27, 2023

Aura Private Credit: Letter to investors 27 January 2023

By Brett Craig

This week, the December 2022 quarterly Consumer Price Index (CPI) reported the fourth consecutive quarter to show a rise greater than any seen since the introduction of GST in 2000. With the persistent inflationary pressure not yet showing any signs of slowing, further RBA rate rises are certainly on the cards.
January 25, 2023

End of the Term Funding Facility = Greater opportunity for Non-bank SME Lenders

By David Buckland

When the COVID-19 pandemic got going in early-2020, the Reserve Bank of Australia established the Term Funding Facility (TFF) to offer low-cost three-year funding to authorized deposit-taking institutions (ADIs, often referred to as the Banks). This facility essentially provided the Banks with access to extremely low-cost funding (at a flat 0.

Frequently Asked Questions

  • 1. Is this Fund suitable for me?

    The Fund is aimed at retail and wholesale investors and participation is available to individuals, companies and trusts including superannuation trusts so long as they are ordinarily resident in Australia and aged 18 years or over.

    This product is likely to be appropriate for a consumer seeking capital preservation or income distribution, to be used as a core component or satellite/small allocation within a portfolio where the consumer:

    • Has a short, medium, or long-term investment timeframe.
    • Has a low, medium, high, or very high risk/return profile.
    • Does not require monthly access to capital.


    The Fund is open-ended and an Australian Registered Managed Investment Scheme offered under a Product Disclosure Statement and registered with ASIC.

    You can learn more in the Target Market Determination here.

  • 2. What is the Fund’s investment objective?

    The Fund aims to achieve a target return of 3.5%–5.5% per annum above the Reserve Bank of Australia (RBA) Cash Rate distributed as stable monthly income from a diversified portfolio of Australian private debt assets, predominantly made up of small to medium enterprise loans.

  • 3. Where does the Fund invest?

    The Fund aims to invest in a diversified pool of Australian private debt investments. Investments will be made via warehouse securitisation deals, notes or other instruments for business and consumer loans, as well as direct lending to businesses. The Fund will target private debt investments sourced from multiple channels, including:

    • Investing in funding vehicles of loan originators who target well-secured loans with low probability of default and aim to achieve higher returns on a risk-adjusted basis, than publicly traded notes of similar portfolio default and loss given default levels;
    • Direct business lending opportunities; and
    • Consumer lending via warehouse securitisation vehicles.


    The Fund provides an opportunity for investors to benefit from the Investment Manager’s experience and extensive research and proprietary due diligence processes to target high-quality Australian non-bank lenders.

    The Fund’s investment strategy is to provide stable monthly cash income and portfolio diversification by gaining exposure to the private debt asset class. The following portfolio parameters have been set for the Fund:

    • 0–90% invested into private debt.
    • 5% maximum loan concentration to a single underlying loan once the funds under management within the Fund reaches $100 million.
    • 10–100% cash holdings.


    The Fund is able to use derivatives to hedge interest rate risk.

    The Fund invests across the Australian private debt universe, primarily in ​pools of both Australian SME business and consumer loans, originated by non-bank lenders. The criteria are as follows:

    1. The underlying exposures are Australian loans.
    2. There are processes for robust credit assessments of the underlying borrowers.
    3. The lender has a scalable business model with a robust medium-term outlook to ensure the debts will be ​originated and serviced to a high standard on an ongoing basis.
    4. The lender’s management team has a proven track record.
  • 4. Why is the return for the Aura High Yield SME Fund different to the return for the Aura Core Income Fund?

    The lower return is associated with lower risk. The Aura Core Income Fund return profile is lower because the fund has taken a high-security position, which is associated with lower risk. The Aura Core Income Fund will in most cases sit in the senior credit position within the capital stack and therefore has additional security sitting below in the capital stack.

  • 5. What is the minimum initial investment?

    The minimum investment is $25,000 and the minimum client balance is $5,000. 

    Additional applications (top-ups) of $5,000 or more can be made into the Fund. The minimum additional investment amount does not apply to reinvestment of distributions, which may be lower than this minimum. Additional investments are accepted every month and will be processed on the first business day of each month (provided your additional application is received before 12 noon Sydney time on the second last Business Day of the preceding month.)

  • 6. How often is income paid?

    The net asset value of the Fund will be determined monthly, and the Fund intends to distribute net income to investors each month. It is intended that all net income at the end of each month will be distributed to investors by the 10th business day of the following month and may be slightly delayed after 30 June each year.

  • 7. Is there a distribution reinvestment plan available?

    Yes, you can elect to take distributions as follows:

    • Direct deposit to a bank account in the name of the entity investing; or
    • Reinvestment in the Distribution Reinvestment Plan 'DRP'. If no election is made on your application form when you invest, then distributions will automatically be reinvested in the DRP.
  • 8. Where can I view the Fund’s unit price?
  • 9. How can I see my unit balance and investment value online?

    To access your investment online please visit the client portal by clicking on the button below.
    If you are logging in for the first time, please create an account and enter your account number (provided in your Investment Confirmation Letter) to view your investment.

    Login

  • 10. How do I redeem funds?

    The Fund intends to offer monthly redemptions, known as a Limited Withdrawal Offer.

    However, please note the Fund is defined as illiquid under the Corporations Act, and regular Limited Withdrawal Offers are not guaranteed and will be subject to the Fund having available liquid assets. The Fund will aim to hold some cash to meet monthly redemptions but there may be situations where limits to redemptions may apply. 

    Each month, the Responsible Entity intends to offer investors a Limited Withdrawal Offer. During the withdrawal period, the Responsible Entity will accept withdrawal requests.

    Investors will be required to submit the Withdrawal Request Form and have it signed by the authorised signatories on the account. The Withdrawal Request Form will be included in each Limited Withdrawal Offer.

    Each Limited Withdrawal Offer will be available for acceptance for at least 21 days. You can find details of the withdrawal period on the Responsible Entity One Managed Investment Funds website:

    Responsible Entity Website

    If total redemption requests received are in excess of the amount of the Limited Withdrawal Offer, the requests will to be satisfied proportionately.

    Any requests for withdrawal in response to a Limited Withdrawal Offer that are not wholly satisfied due to a scale back will remain valid for withdrawal in the next Limited Withdrawal Offer.

    Withdrawal proceeds will be paid to your nominated bank account and generally by the 10th Business Day of the following month. However, the Responsible Entity has up to 21 days to pay withdrawal proceeds.

    Please refer to Section 7 of the PDS for more information regarding Limited Withdrawal Offers. You can access the PDS here: Download the Aura Core Income PDS

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