Frequently Asked Questions

Wholesale Investors are wholesale clients as defined in the Corporations Act.

To qualify as a Wholesale Investor you must either:

• Invest $500,000 or more, or
• Provide a qualified accountant’s certificate (that is not more than 2 years old) confirming you either:
  1. have net assets of at least $2,500,000, or
  2. have gross income of at least $250,000 for each of the last two (2) financial years.

Whilst both the Direct Mortgage Fund and the Monthly Income Fund both provide first mortgage loans secured real property in Australia under same credit policy guidelines, there are differences in the way the investments are structured.

The key differences between the two investment options are as follows:

All loans provided by either the Investors in the Direct Mortgage Fund or the Monthly Income Fund are assessed in accordance with the same credit policy. The credit policy used to assess each loan is identical with the same loan credit criteria used regardless of how the loan will be funded.

Direct mortgage lending is also known as private lending, corporate peer to peer lending or marketplace lending. Direct mortgage lending removes banks as the middleman and matches borrowers directly with Investors. Investors provide the loans to the borrowers on commercial terms secured by mortgages over real property.

In the case of the Direct Mortgage Fund, the loans provided by Wholesale Investors to borrowers are for short term commercial purposes only and the security offered to investors are first mortgages over real properties within Australia. The Investors decide who they want to lend their money too whilst Vertex manages the whole process on behalf of the Investors from loan assessment, initial investment to loan repayment.

To receive mortgage investment opportunities, Investors first need to join the Direct Mortgage Fund by registering to become a member.

Once registered as a member of the Direct Mortgage Fund, Investors are presented with mortgage investment opportunities as they become available.

Mortgage investment opportunities are detailed in separate Syndicate Information Memorandums issued to the registered members.

Members will receive Syndicate Information Memorandums for specific Sub-Schemes and can then apply to invest in specific mortgage investments of their choice.

To receive mortgage investment opportunities, Investors first need to join the Direct Mortgage Fund by registering to become a member. To do this, Investors need to:

1. Read and consider the Information Memorandum for the Direct Mortgage Fund.
2. Complete and sign the registration form within the Information Memorandum.
3. Provide confirmation that they qualify as a Wholesale Investor.
4. Provide identification as detailed in the Information Memorandum.

Registration is free and provides no obligation to Invest in any mortgage investment.

Once registered as a member of the Direct Mortgage Fund, Investors are presented with mortgage investment opportunities as they become available.

An Information Memorandum is a document used to offer Wholesale Investors a range of financial products such as managed funds.

The Information Memorandum for the Direct Mortgage Fund provides information for Wholesale Investors to decide if they wish to register to acquire a membership interest in the Direct Mortgage Fund and should be read in its entirety. It details the features, benefits, risks and general information about the Direct Mortgage Fund.

Information relating to specific mortgage investment opportunities are detailed in the relevant Syndicate Information Memorandums made available to members of the Direct Mortgage Fund.

The Information Memorandum for the Monthly Income Fund provides information for Wholesale Investors to decide if they wish to acquire units and invest in the Monthly Income Fund and should be read in its entirety. It details the features, benefits, risks and general information about the Monthly Income Fund.

A Syndicate Information Memorandum is a document that supplements the Information Memorandum and relates to specific mortgage investments offered to the members of the Direct Mortgage Fund. It contains credit and loan information, a copy of the valuation report and any information relating to the mortgage investment as Vertex determines appropriate.

To apply to invest in the specific mortgage investment, Investors complete and sign the application form contained within the Syndicate Information Memorandum.

Each mortgage investment in the Direct Mortgage Fund is offered through a separate managed investment scheme known as a Sub-Scheme. Each Sub-Scheme is a loan to a borrower and has its own Investors and holds separate and distinct assets and security from each other Sub-Scheme.

Mortgage investments contained in the Sub-Schemes are only made available to Wholesale Investors.

Investors have rights to receive income or capital distributions in relation to the mortgage investment in the Sub-Scheme selected and in which they are an Investor. Income and capital distributions are proportionate to their share of the total amount contributed to the mortgage investment in the Sub-Scheme selected.

The Monthly Income Fund is an unlisted unit trust and is an unregistered managed investment scheme under the Corporations Act.

By investing in the Monthly Income Fund, you will hold units in the Monthly Income Fund which will entitle you to share in any income generated for the Monthly Income Fund.

The unit price is based on the underlying value of the assets and is calculated in accordance with the terms of the Constitution and as such the unit price may fluctuate. The value of the units may vary as the market value of the assets of the Monthly Income Fund rises and falls. However, due to the nature of the Monthly Income Fund’s investments, in ordinary circumstances the value of units will not generally fluctuate. Therefore, in the normal course of events it is expected that the units issued in the Monthly Income Fund will have a value of $1.00 per unit.

More information on the structure can be found within the Information Memorandum for the Monthly Income Fund.

The units issued in the Monthly Income Fund currently have a value of $1.00 per unit.

There are three steps to make an investment in the Monthly Income Fund.

1. Read the Information Memorandum and consider the offer.
2. Complete the application form within the Information Memorandum.
3. Lodge your application form, supporting documentation and investment funds with Vertex.

Income will start accruing on your investment on the day it is invested and accepted by Vertex.

Investment Preservation is a capital protection measure offered by Vertex for the Monthly Income Fund only.

In the event that there is a capital loss in an investment of the Monthly Income Fund and the value of the units decrease, Vertex at its sole discretion, may forfeit any future performance fees and apply the forfeited fees to cover any loss on an ongoing basis and until the unit price has been restored to its previous value.

More information on Investment Preservation can be found within the Information Memorandum for the Monthly Income Fund.

In most cases, borrowers are approaching their banks for commercial funding. However, over the past few years the banking regulators have moved to increase the banks requirement to hold significant amounts of capital in reserve. This has created cost of capital issues for the banks which has forced them to constrain lending, especially in the commercial debt sector. Even to existing clients, this has resulted in the banks being unwilling or unable to provide funding for property transactions. The current economic climate has further exacerbated this. Any lending that is offered to clients is often on extremely tight, onerous, and uncommercial terms. Banks’ lending to new clients has essentially stopped altogether.

The current lending constraints together with the royal commission and the borrowers seeking a greater level of customer service has given rise to an opportunity for private funders to provide debt facilities to bank risk level borrowers at private funding pricing.

No, not in any instance. Vertex only considers lending proposals to experienced property professionals who have a clean credit history and a track record of successful property transactions.

The Constitution of the Direct Mortgage Fund and the Monthly Income Fund allows for Vertex and/or the directors of Vertex to co-invest in both funds. If Vertex and/or the directors co-invest in either fund, they invest on the same terms and conditions as all other Investors. Vertex and/or its directors co-investing in a fund should not be viewed as a recommendation to invest and Investors should seek their own independent professional advice.

No. Vertex is only permitted to provide general product advice. Investors should seek their own independent financial advice before deciding to register and/or invest.

Vertex’s alignment of interest is simple. If investors are not getting paid, Vertex is not getting paid. This ensures that only quality transactions that meet Vertex’ stringent credit policy are offered to investors in the Direct Mortgage Fund or funded via the Monthly Income Fund.

Yes, Vertex has a formal Default Management and Loan Recovery Policy. The overarching premise of this policy is that Vertex treats the interests of our investors as the absolute priority. This includes providing regular up-dates on the status of any mortgage in recovery management to Investors. In the first instance, Vertex will work with the borrower to achieve an acceptable outcome. If an acceptable outcome is not achieved within a reasonable timeframe Vertex (through its Solicitors) will instigate formal legal proceedings on behalf of the Investors pursuant to the loan security held and if required sell the security property.

Yes. Vertex Asset Management Pty Ltd ACN 623 013 892 is the holder of Australian Financial Services Licence (AFSL) No. 504577. Vertex Asset Management Pty Ltd is the Trustee of the Vertex Direct Mortgage Fund and the Vertex Monthly Income Fund.

Vertex Funds Management Pty Ltd ACN 610 480 530 is the Investment Manager of the Vertex Direct Mortgage Fund and the Vertex Monthly Income Fund. Vertex Funds Management Pty Ltd ACN 610 480 530 is an Authorised Representative (No. 1263648) of Vertex Asset Management Pty Ltd (AFSL No. 504577).