An investor in a Contributory Mortgage fund becomes a member of the fund (scheme) and then invests in individual mortgages (sub-schemes) that best suit their risk profile.
The Fund is regulated by the Australian Securities and Investment Commission (ASIC). ASIC regulates all financial products and financial advice providers in Australia. The Manager must obtain a financial services licence to operate a managed investment scheme within Australia. Once a licence is issued, the Manager has a set of legal obligations under the Australian Corporations Act 2001 including to:
The Fund offers investments in selected registered first mortgage loans. Each loan is approved by ARK, and known as a ‘Syndicate-Fund’ being separate from all other Syndicate-Funds. Each investor has a direct interest in the mortgage in which they are invested, receives a regular monthly income and is provided with capital stability.
ARK offers its investors greater investment diversification opportunities within a clearly defined investment strategy. We are in a low-growth, low-yield economic environment and our focus on generating stable income represents a prudent investment approach. Mitigating downside risk and capital preservation is a critical element of our investment philosophy.
As a registered first-mortgage holder, the Fund will have first-ranking exposure to the underlying properties. Thus, in the event that borrowers default, the Fund will have first ranking exposure to the proceeds from remediation of the loan or selling the property. As such, the Fund will rank above all other creditors such as mezzanine loans, unsecured debt and equity. The lending criteria prohibits the use of subordinated debt. This is an important feature, as an additional debt burden would only increase the borrower’s total indebtedness and therefore have a higher risk of default.
No application, withdrawal or ongoing fees or charges are generally imposed on investors in the Contributory Fund.
Our investors will receive rates of 7% to 12% p.a. depending on the specific investment they have chosen.
The term of the investment varies depending on the specific investment you have chosen. Our loan terms are 6 to 36 months.
The length of the loan term is provided to you in each Invitation to Invest/SPDS. You can then decide if the loan term is right for you and your current circumstances.
There are two options when choosing to invest. Selecting a ‘General Investment Authority’ allows us as the Responsible Entity to select which First Mortgage your investment funds are placed into. Or you can choose a ‘Select Mortgage Investment’ this means you will choose based on the loan terms and conditions which loan/s you would like to invest in.
Investment funds will be deposited into an Investor Trust account. General Authority investments will be placed accordingly into any current opportunities at the discretion of the Fund, and Specific Investments will be held in the Investor Trust account and allocated as per the instructions of the completed SPDS.
In the event the borrower is unable to repay the loan at the end of the loan term, they will then be charged the higher default rate. This is anywhere between 10% and 20% depending on the conditions of the loan agreement. The default rate is clearly defined in the SPDS you complete prior to investing.
Call us, email us, talk to us. We are happy to talk to you about any other questions you might have regarding the process of investing with us.
1300 838 834
Level 3, Building 7, Botanicca Corporate Park,
570-588 Swan Street, Richmond VIC 3121