Wholesale
Pearlfisher Capital Ltd

First Mortgage Fund II

Managed Investment Scheme

Register Interest

WARNING

The law normally requires people who offer financial products to give information to investors before they invest. This information is designed to help investors make an informed decision.

If you are a wholesale investor under the definition of that term in clause 3 of Part 1 Schedule 1 of the Financial Markets Conduct Act 2013, the usual rules do not apply to offers of financial products made to you. As a result, you may not receive a complete and balanced set of information.

You will also have fewer other legal protections for these investments. Ask questions, read all documents carefully, and seek independent financial advice before committing yourself.

Transaction Size
NZD 25,000,000.00
Share Price
Minimum Investment
NZD 100,000.00
Issue Type
Managed Investment Scheme
Sector
Property

The opportunity is presented for Wholesale Investors to express interest in an investment into Pearlfisher Capital First Mortgage Fund II (the Fund). This follows the launch and deployment of capital raised under the Pearlfisher Capital First Mortgage Fund I (Fund I) in February 2021 which sees Pearlfisher Capital Limited (Pearlfisher, the Manager) now in a position to offer a second opportunity for existing and new wholesale investors to participate in the Fund.

The Fund will continue the focus on providing first mortgage loans to borrowers who are undertaking property development and property investment transactions in the New Zealand property market. The Fund will target individual loans between $3 million and $15 million, with a timeframe to expiry of between 6 and 24 months. The Fund will target net returns to investors of 6.0% to 7.5% per annum (pre – tax) on invested capital over the term of the Fund, inclusive of a 3% coupon payable quarterly on called capital in the Fund, with invested capital recyclable during the 24 month investment period.

Investors will have priority over returns up to a 5% minimum hurdle rate, with a 20% Managers Performance Fee on total investment returns after a 1.0% Management Fee on invested capital and net of other Fund costs. Please refer to the Investor Flyer and Investment Offer Memorandum for further Fee details.

The Auckland development market in particular is continuing to experience strong growth in new housing through the ongoing implementation of the Auckland Unitary Plan and additional new pro-development policies such as the National Statement Policy on Urban Development.

Increased levels of development activity are evident across the market for smaller to medium size projects of quality construction and design. Demand is expected to remain apparent across the full range of development products, from the construction of affordable dwellings through to mid- and high-end market terrace houses, townhouses, apartments and subdivisions.

This increased market activity has been to the benefit of Investors in Fund I, which successfully deployed all of its capital during the course of 2021. Pearlfisher continues to see strong levels of enquiry and is originating quality lending applications, with a number of potential and qualifying investments ready for investment into the Fund.

Pearlfisher, the Manager has provided non-bank finance to the New Zealand property sector for over a decade and has extensive relationships within the industry. In 2017, Jarden Investments Limited acquired a 50% stake in Pearlfisher Capital, bringing with it significant complementary experience in the New Zealand capital markets. 

While the ongoing COVID-19 pandemic may result in continued uncertainty in the property market and the economy generally, this is expected to provide increased opportunities for the non-bank lending market as banks face tighter liquidity and credit constraints. The Fund’s measured and disciplined approach is anticipated to result in attractive risk/return metrics over the medium term. In light in recent upward interest rate moves in wholesale markets the Fund will seek to reprice deals accordingly, if it is deemed appropriate to do so.

The debt facilities to be provided by the Fund will have a simple security structure: first ranking mortgages and general security agreements providing security over all of the assets of the borrower and, unless otherwise specifically agreed, personal guarantees. The Fund will adhere to prescriptive credit criteria when assessing a potential loan, including in respect of loan to value ratios, development budgets and presale thresholds, as well as applying robust approval and acceptance criteria. All of the Fund’s investments will be vetted by the Investment Committee, which includes two independent Directors.

The Fund is targeting to raise $25- $50 million under the offer, with over subscriptions permissible up to a total Fund size of $75.0 million. Pearlfisher Capital or one of its related parties will invest in the Fund an amount equal to 5% of the total committed capital, with a minimum investment of $1.25 million. This investment is a strong endorsement by the Pearlfisher Capital group of the future potential prospects of the Fund and it aligns the Manager’s interests with the interests of investors. 

This commitment is bolstered by Pearlfisher Capital providing a first loss layer guarantee in relation to 5% of the principal amount of each investment by the Fund, as well as making its performance fees available to recompense the Fund for any principal losses of the Fund in excess of 5%, up to a maximum sum covered by its cumulative performance fees over the life of the Fund.

We look forward to welcoming existing and new investors to the Fund and commencing its investment activities, with a number of qualifying opportunities already originated that will likely be available for investment once the offer is closed.

Please refer the attached Investor Flyer for Fund II in the document tab as summary of the Investment Offer.

Investment in the Fund is available to qualifying wholesale investors only (not suitable for retail investors), with a minimum subscription size of $250,000 (with discretion to accept applications of $100,000).

For further information or to register interest click the Register Interest button and you will be connected to the Manager.

PFC_Fund II_Investor Flyer_1021
November 3, 2021
3/11/2021

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