At Bluebird Private Equity we identified early that the commercial lending market was underfunded and the current lending climate was not conducive with the growth and demand we were seeing in the commercial sector. We wanted to target this growing niche but also offer our investors the opportunity to benefit from this growing and lucrative area of finance.
How we do it:
We identify quality commercial loan opportunities with stringent criteria in the ‘Sub-2million’ Dollar loan space, opportunities such as bridging finance for property developments as well as underwriting opportunities with hard backed security that fall outside of the stringent scope of the major lenders and are too small for the large private lenders to justify or simply require quick draw downs due to time constraints. We created a lending platform that allows us to lend to these clients via ‘Bluebird Private Capital’ our lending arm that was formed to source and write these loans on behalf of the Fund.
Why it works:
We have extensive networks within the commercial and residential lending market via our subsidiary companies which funnel us these opportunities for selection, due to the stringent nature of our vetting process only the most suitable loans pass through to settlement but these loans are written at higher than average interest rates.
As they are asset backed and much smaller than other loans in the space our risk profile is heavily reduced while still maintaining the risk adjusted returns expected of a much higher risk lending facility. This is a perfect situation for the fund and the investors but can only be maintained due to our boutique size and niche targeting.
Structure of Fund
The Fund has appointed Bluebird Private Equity Ltd ACN 608 378 374 as its trustee (Trustee). The Trustee or the Managing Director of the Trustee will act as the initial manager of the Fund(Manager), but the Trustee may at its discretion appoint an alternative Manager to manage the Fund.
The Trustee will use its network of brokerage holdings to introduce ongoing investment opportunities to the Fund of clients seeking commercial loans.
Managed Investment Trust (MITs)
The following comments regarding the taxation of MITs is current at the time of publication which may change and is general in nature. Investors should seek their own taxation advice prior to investment in the Fund.
The Fund is not currently an MIT, but expects to meet the MIT requirements in future. Fund distributions to foreign tax resident investors (which are not otherwise subject to withholding tax or a tax exemption) are subject to a default MIT withholding tax rate of 30%. This is reduced to 15% where the foreign tax resident investor is a resident in a country which has an Exchange of Information Agreement with Australia.
This is a final tax which the Trustee would collect and remit to the Australian Taxation Office on your behalf.