Alceon launches debt income fund
Aug 10, 2021
Alternative investment manager Alceon has announced the launch of its debt income fund with 5% to 7% per annum target return as institutional investors and family offices have been increasing their capital allocation to secured private debt.
The portfolio of underlying loans in the fund would be primarily secured by registered first-ranking mortgages held over Australian property, mostly on the east coast of Australia, with the loans finance being a mix of real estate development, construction and ownership.
The Alceon Debt Income fund would follow a bottom-up process, conducting fundamental analysis and due diligence on potential opportunities with an active program to monitor the progress of projects, assets and delivery partners and would invest in secured senior and second-ranking loans where the loan-to-valuation ratio would not exceed 65%.
The fund would also invest in loans issued by mid-market real estate owners and developers to finance real estate assets in Australia and some limited exposure to New Zealand.
Omar Khan, Alceon group director and head of wholesale capital, said that since 2016, when the Australian Prudential Regulation Authority (APRA) introduced lending controls, non-bank market share in Australia increased from 4% to circa 8% but was still well below global standards where non-banks command a 20% – 30% market share.
“In search for alternative solutions, institutional investors and family offices have been increasing their capital allocation to secured private debt, but so far wealth advisory groups have had limited access to this sector,” Khan said.
“To fill this gap, we are very pleased to launch the Alceon Debt Income fund, a retail fund that aims to deliver regular monthly income from a diversified and conservative portfolio of debt secured by real estate.”
The fund was available on Netwealth and HUB24 with plans to provide broad platform access to wealth groups across Australia. The minimum investment was $10,000.
This article is issued by The Melbourne Securities Corporation Limited ACN 160 326 545, AFSL 428 289) (MSC) and has been prepared by Alceon Real Asset Management (ABN 99 627 059 723, corporate authorised representative (no. 345692 of Alceon Group Pty Limited (ABN 63 122 365 986, AFSL 345 692)) (ARAM) as the investment manager of the Alceon Debt Income Fund (Fund). MSC is the responsible entity and the issuer of units in the Fund. It is general information only and is not intended to provide you with financial advice and has been prepared without taking into account your objectives, financial situation or needs. You should consider the product disclosure statement (PDS), prior to making any investment decisions. The PDS and target market determination (TMD) can be obtained for free by visiting our website www.alceon.com.au. If you require financial advice that takes into account your personal objectives, financial situation or needs, you should consult your licensed or authorised financial adviser. This information is only as current as the date indicated, and may be superseded by subsequent market events or for other reasons. To the extent permitted by law, no liability is accepted for any loss or damage as a result of any reliance on this information. All investments contain risk and may lose value.
Neither ARAM nor MSC guarantees the performance of any fund or the return of an investor’s capital and do not give any representation or warranty as to the reliability or accuracy of the information contained in this information.
IF PERFORMANCE FIGURES ARE INCLUDED: Total returns shown for the Alceon Debt Income Fund have been calculated using exit prices after taking into account all of MSC’s ongoing fees and assuming reinvestment of distributions. No allowance has been made for taxation. Past performance is not indicative of future performance.
IF FORECASTS ARE INCLUDED: Any opinions, forecasts, estimates or projections reflect judgments of ARAM as at the date of this informationand are subject to change without notice. Rates of return cannot be guaranteed and any forecasts, estimates or projections as to future returns should not be relied on, as they are based on assumptions which may or may not ultimately be correct. Actual returns could differ significantly from any forecasts, estimates or projections provided. Past performance is not a reliable indicator of future performance.