What are the fees involved in APG’s Pooled Mortgage Fund?

Common fees in pooled mortgage funds

The fees in a pooled mortgage fund can vary depending on the specific fund and the company managing it. While Active Property Group has kept our fees to a minimum, there are many fees that fund managers might charge investors. Some of the most common fees charged in pooled mortgage funds are the following:

• Application Fee: Many funds charge a fee to investors when they first invest. It could be anything from 1-5% of the invested amount and may be required as an up-front payment or, most commonly, is deducted from the first distribution payable to the investor.
• Management fee: This fee is charged by the company managing the fund and is usually a percentage of the assets under management. It covers the cost of managing the fund, including selecting and managing the mortgage loans.

• Performance fee: This fee is typically charged if the fund exceeds a certain level of return. It is usually a percentage of the excess return above the benchmark or hurdle rate.
• Custodial fee: This fee is charged by the custodian bank or institution that holds the assets of the fund.
• Legal and accounting fees: These fees are charged for legal and accounting services provided to the fund.
• Redemption fee: This fee may be charged when an investor wants to withdraw their investment from the fund. It is designed to discourage short-term trading and to cover the administrative costs associated with processing redemptions.

It’s important to read the fund’s prospectus carefully to understand the fees that will be charged, as well as any other terms and conditions associated with the investment.

Active Property Group’s Fees

While all these fees might sound overwhelming, at APG, our set up is much simpler to understand. This is because our advertised returns are net of fees other than an approx. 0.5% p.a. Retail Investor fee. We don’t charge any of the fees listed above to our investors.

This means that when we announce the quarterly return of the fund then as a Wholesale Investor this is the exact amount you would receive as your distribution. As a Retail Investor you only need to subtract 0.5% from the quarterly return to calculate their return for the quarter. For instance, if the announced quarterly return is at 9%, retail investors will receive 8.5% for the quarter.

Why is there a Retail Investor fee but no Wholesale Investor fee?

A Retail Investor fee is charged because our retail fund is operated by an independent Trustee (called Primary Securities Ltd) and the Retail fee goes directly to them. Primary Securities oversees the activities of the Fund and ensures that Active Property Group is acting in the best interests of the investors at all times. Primary Securities deducts approx. 0.5% before paying the quarterly distribution so there is no need to pay anything upfront.

For those wondering if they can qualify as a Wholesale Investor, you must meet the following criteria:

1. You must be a person or entity who initially invests at least $500,000 – or –
2. You must be a person or entity that has obtained an accountant’s certificate within the preceding six months stating that you:

• have net assets of at least $2.5 million, or
• have a gross income of $250,000 p.a. for each of the last two financial years.

About APG’s pooled mortgage fund

APG’s pooled mortgage fund is used to finance a variety of small business and property development loans. It’s managed by a team of experienced mortgage managers who conduct extensive due diligence on each of the borrowers and all loans are secured by Australian real estate.

One of the main benefits of a pooled mortgage fund is that it is a true, set-and-forget investment that allows investors to create a passive income stream. At APG we’re active, so you can be passive.

The pooled mortgage fund is open to all investors and provides passive income via quarterly distributions. Investors also have the option to sign up for our Distribution Reinvestment Plan where you can choose to have your distribution reinvested each quarter rather than paid out, in order to compound your interest. To learn more about the fund or the Distribution Reinvestment Plan, you may contact our Investor Relations team and they will gladly answer any question you may have.

This information is of a general nature and does not constitute professional advice. You should always seek professional advice in relation to your particular circumstances. The returns mentioned are not guaranteed. You risk losing some or all of your investment. If you have any questions about investing in private mortgages then please send us an email [email protected] or message us via our Contact Page.

If you have any questions about investing in private mortgages then please send us a message via our Contact Page.