Initiative Financial Senior Credit Property Sub-Fund I


Please Note: The following information is made available for Professional Investors, Institutional Investors and Wealth Manager and Advisers only. It is not intended for Private Investors and should not be relied upon by Private Investors.


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OPPORTUNITY

  • An opportunity exists to deploy funds into the Irish Market to provide finance to experienced developers, to build social, affordable and mid-market housing.
  • The fund aims to deliver an annual IRR of 6.00% – 7.00%. p.a.
  • Funds will be deployed via the Initiative Financial Senior Credit Property Sub-Fund I (the “Fund”)
  • Development Loans shall be repaid from sale proceeds with redeployment of funds within the initial 5-year term of the fund.
  • The fund may also deploy up to 30% of NAV into Revenue Generating and/or short-term loans falling within appetite.

STRATEGY

  • The Fund shall make development finance available to experienced residential developers, to fund the construction of new residential housing in high-demand areas across Ireland.
  • All loans will be secured with a first legal charger over the underlying property. The fund shall not issue subordinated debt.
  • The fund shall provide loans of up to 75% LTNSV (Loan to Net Sales Value), with the aim of ensuring each loan is secured with minimum collateral cover of 133%, throughout the project.
  • Funds will be deployed via the Initiative Financial Senior Credit Property Sub-Fund I (the “Fund”) a sub-fund of the Davy Platform ICAV regulated in Ireland.
  • Loans will be originated and managed by Initiative Ireland, subject to approval by Davy Investment Fund Services (DIFS) as the Investment Manager, a member of the Davy Group.
  • The Fund will permit Initiative Ireland increase the scale of their lending activity in the market to meet their current pipeline. When the Fund is substantially invested, Initiative Ireland will evaluate launching a second fund, building upon this niche private debt strategy.

OFFERING

  • Investors may subscribe to dividend paying or ‘roll-up’ shares.
  • The base currency of the Fund is EUR and all loans shall be secured against Irish Property.
  • The Fund will seek to achieve its investment objective through the provision of secured loans which are typically (i) secured with a first legal charge over Irish Property; (iii) have a maturity of 2 years; and (iv) have principal amounts ranging from EUR1.5mn-EUR3mn.

INVESTMENT OPPORTUNITY

  • Ireland is experiencing a significant shortage in housing supply, due in part by the retreat of the banks from traditional lending markets, disrupting financing flows – particularly for smaller development projects. There is a significant opportunity for non-bank lenders, such as Initiative Ireland to deploy funds into smaller developments, which benefit from shorter loan terms and yet offer significant un-subordinated collateral.
  • By focusing on lower-cost housing, the Fund aims to provide stock where demand is considered greatest and where demand is sustainable.

TRACK RECORD

  • Davy specialises in the provision of investment management services to 3rd party managers for real estate investment funds and has over €4Bn of assets under management as at 30 September 2018. Further information on Davy is available within the prospectus.
  • Initiative Ireland is an established secured property finance provider, led by an experienced management team, experienced in the provision of Banking and Alternative Finance products within the market as outlined in the prospectus.

MARKETPLACE PLATFORM

  • Initiative Ireland shall syndicate loans originated by the fund in part through its own marketplace lending platform InitiativeIreland.ie
  • Launched in Q4 2017, the platform and origination team shall provide the Fund with an established distribution channel for loan origination.
  • The Fund shall retain preemptive rights to fund 75% of each loan financed and an opportunity to further optimise returns through loan syndication, earning an underwriting premium on all loans it funds.

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Initiative Financial Services UK Ltd is an appointed representative of Thornbridge Investment Management LLP which is authorised and regulated by the Financial Conduct Authority.


Initiative Financial Services UK Ltd (UK Company Number 11568586 ) is a subsidiary of Initiative Financial Services Limited, t/a Initiative Ireland is a private limited company registration number 563769.