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.
Brett Craig spoke with James Marlay from Livewire as part of their 2023 Income Series to share his views on the drivers for this income opportunity, how the current economic environment is impacting various sectors of the economy and where he is seeing opportunities to generate stable income.
Source: Aura Core Income Fund. The Fund’s inception date is October 2022. Past performance is not a reliable indicator of future performance.
|Aura Core Income Fund||RBA cash|
|Compounded Annual Return||7.02%||3.68%|
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:
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.
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 the Aura High Yield SME Fund and is supported by investment analysts James Chapman and Natalie Kolenda.
Brett Craig leads the daily management of the Fund.
Bachelor of Commerce (B.Com.), Accounting, Chartered Accountant
Brett is responsible for portfolio management and asset origination for the Aura High Yield SME Fund and Aura Core Income Fund.
Prior to joining Aura Group, Brett held a number of roles at Macquarie Group over an 11 year period including Vice President within the Debt Markets business where he focused on originating, structuring and distributing debt products primarily in the Australian market.
Brett is renowned as the first portfolio manager to originate, structure, negotiate and execute an Australian Bank Debt facility for an AltFi lender. Prior to the Debt Markets role Brett ran the financial management of the equity derivatives and loans book for the Metals and Energy Capital business.
Brett holds a Bachelor of Commerce from The University of Wollongong and is also a Chartered Accountant.
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:
Complete the online application form at Olivia 123 and ID verification online (approx. 10 minutes)
Submit the completed application form to the Administrator online
Transfer the funds and an investment confirmation will be issued by the Administrator
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.
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:
The Fund is open-ended and an Australian Registered Managed Investment Scheme offered under a Product Disclosure Statement and registered with ASIC.
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.
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:
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:
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:
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.
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.)
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.
Yes, you can elect to take distributions as follows:
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.
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