What is KBRZ fixed income fund?
Our fixed income fund aims to provide investors with the opportunity to invest in property development projects, such as large commercial and residential projects. This fund will create a high and stable return for investors and is regarded as one of the fastest growing fund types with the steadiest return. KBRZ's fixed income fund provides investors with a return of 8% p.a..
Why our fund?
Different from a development fund that is based on a single project, KBRZ's fund structure contains a combination of different development projects. The fund structure is also supported by a robust risk management system, which provides diversification to investors and ensures the security and safety of investor's capital. KBRZ's fixed income fund provides a low risk level as it is a debt investment which gains fixed return through syndicated loans
How do I invest?
You may consult with our fund manager and request for an application form. You may start investing once your application form has been approved.
Does KBRZ have a particular project regarding the fixed income fund?
KBRZ's fixed income fund is essentially a project chain, hence does not have a specific corresponding project. The average project cycle is between 3-15 months, with projects located in Melbourne, Sydney and Brisbane. Project types include apartments, town houses and service apartments.
For KBRZ's fixed income fund with 8% return p.a., can investors see the total amount of money in the fund and the specific project the money is invested in? Will the investors be notified when there is a change in the capital pool monthly or quarterly (For example if there is an injection of new capital or withdrawal of funds) ?
The fund is currently an open-end fund, meaning that it is not invested in to a specific project, but rather split into a pool of short to medium term loans. Thus, Open-end funds do not show a specific project it is invested in but will display a category of how it is invested. In fact, an injection of money into or withdrawal of money from the fund does not have an impact on investors. When new capital is injected into the fund, there will be a new project entering, and the creditor's rights will be evenly distributed across all investors. When a new project is completed, another new project will follow. To this date, the fixed interest rate of 8% has all been distributed on time.
If the money in the fund is not fully utilised (e.g. only 20 million is used out of 30 million), how can KBRZ guarantee return to the investors?
KBRZ has always promised to only raise capital when the project is selected and ready to invest. In usual market conditions, the ratio of the projects we investigate to the projects that we select is in a ratio of 5:1, meaning that there is tally on oversupply of projects. Even during market downturns, when the supply of projects rapidly decreases, we will deduct 3% of the profit from our fund and ensure to return investors with their initial capital invested. KBRZ promises to provide investors with a safe fund and wealth management services.
How does KBRZ manage risk?
As a legally licensed fund management entity, we have had years of experience in the real estate and finance industry. Deposit some inevitable levels of risk associated with equity investments, we have at least 120% collateral assets and control the leverage ratio at a maximum of 70%. On the other hand, in a macro view of the Australia real estate market, the majority of the projects possess a 20% profit margin.
What are some potential risks of KBRZ's 8% fixed income fund?
All investment contain risks, so the key lies within the management of those risks. The major risk of the fixed income fund is credit risk. As it is a debt investment, there exists a possibility that borrowers may default on a loan.
Our loan is secured (collateral) and has a loan-to-value ratio of 70%. For instance, if a borrower wants to borrow 1 million AUD to purchase a land, we will only provide a loan up to 700K AUD. If there exists a breach of contract of default on the loan by the borrower, we can sell the land for an amount greater than 700K AUD and recover to loan given out, hence protect our investors capital. On average our LVR is 62%.