Howard Mortgage Fund
The Howard Mortgage Fund and Howard Wholesale Mortgage Fund are closed to new and additional investments, including the reinvestment of distributions
Update of information
The Howard Mortgage Fund has been returning capital to all investors on a monthly basis since January 2013. During the period from 1 January 2013 to 15 January 2014, the Howard Mortgage Fund will have returned 70 % of investors' capital.
Fidante Partners Limited (ABN 94 002 835 592, AFSL 234668) (Fidante Partners), as responsible entity of the Fund, has continued to monitor the appropriateness of the monthly capital repayments and income distributions from the Fund, as well as the suspension of the ongoing withdrawal and periodic small balance withdrawal facilities.
Projected liquidity in the Howard Mortgage Fund and Howard Wholesale Mortgage Fund is at levels where we consider that it is now prudent to commence returning capital to investors on a quarterly basis. Therefore the last monthly return of capital for the Howard Mortgage Fund and Howard Wholesale Mortgage Fund for the month of December 2013 will be paid in January 2014. From this date the Funds will return capital to unitholders on a quarterly basis with the first quarterly return of capital expected to be paid in April 2014. The amount of the quarterly capital payment will be the same as the amount you have been receiving on a monthly basis. As a result of this decision, there are some changes required to the current operation of the Funds.
|Changes in the operation of the Fund on or around 1 January 2014|
While the overall operational aspects of the process will require some changes, payments will continue to be made within the first 10 business days of the relevant quarter.
For the Howard Mortgage Fund, these capital repayments will be made through the automatic redemption of units at the relevant time having a value equal to the capital repayment.
For the Howard Wholesale Mortgage Fund, these capital repayments will result in a fall in the unit price of the fund in proportion to the level of capital distributed at that time. There will be no change to the number of units that you currently hold in the fund.
Quarterly payments can be expected to be received in the first 10 days of each April, July and October in respect of the preceding quarter.
The capital repayment rate will be monitored on an ongoing basis, and may change in the future depending upon the realisation of the Howard Mortgage Fund's assets. This ongoing monitoring will include the appropriateness of the ongoing suspension of the Periodic Small Balance Withdrawal Facility and the Ongoing Withdrawal Facility. We will continue to monitor all aspects of the operation of the Funds, including the appropriateness of the monthly capital repayments and income distributions on an ongoing basis, and we will consider whether any changes need to be made to reflect the circumstances of the Funds. We will notify investors of any such changes, should they should occur.
Quarterly income distributions
We expect to continue to pay a modest level of income distributions on a quarterly basis from 1 January 2014, with the first distribution payment expected to be made on or around 1 April 2014.
Suspension of existing withdrawal facilities
The Periodic Small Balance Withdrawal Facility and the Ongoing Withdrawal Facility remain suspended for the foreseeable future.
Early withdrawals under financial hardship
Investors can continue to submit a request to make an early withdrawal from the Fund under financial hardship if they are able to satisfy Fidante Partners that they meet certain criteria and the Fund has sufficient liquid assets to meet their request.
Changes to Goods and Services Tax (GST) from 1 July 2012
This update is to be read together with the Fund's Product Disclosure Statement (PDS) (if applicable) and has been issued to update the PDS regarding GST changes that commence on 1 July 2012.
All fees and costs expressed in the Fund's PDS (if applicable) are quoted inclusive of any GST and net of reduced input tax credits (RITCs) that are expected to be available to the Fund.
For acquisitions before 1 July 2012, the prescribed RITC rate was 75%. Under recent changes to the GST law, acquisitions by affected trusts from 1 July 2012 can attract RITCs at a prescribed rate of either 75% or 55%, depending on the nature of the acquisition. However, under the finalised rules, "mortgage schemes" (as defined), which includes this Fund, are not subject to the changes. As a result, the Fund is not affected by the changes. Fees stated in the PDS (if applicable) are rounded to two decimal places.
The information in this update is up-to-date at the time of preparation. However, some information can change from time to time. For updated information about the Fund, please contact your financial adviser, call our Investor Services team on 13 51 53 or refer to this website. We will also send you a copy of the updated information free of charge upon request.
The Howard Mortgage Fund was established in 1985 and has built a reputation as one of Australia's most experienced mortgage managers. The Fund invests in a diversified portfolio of primarily commercial mortgage loans and interest bearing securities. The Fund may also invest in cash and other short-term investments.
Interests in the Howard Mortgage Fund (ARSN 090 464 074) and Howard Wholesale Mortgage Fund (ARSN 093 720 159) are offered by Fidante Partners Limited (ABN 94 002 835 592) (AFSL 234668). All mortgage funds carry some investment risk. They are not bank deposits. Past performance is not a reliable indicator of future performance.
To provide investors with a diversified income producing portfolio that aims to provide regular income and capital stability.
Our mortgage lending team employs a conservative approach to managing the mortgage investments of the Fund. We adopt an active approach to managing investments in the interest bearing and other short-term securities portion of the portfolio.
WARNING TO UNITHOLDERS - Unsolicited offer to purchase units
We received a request from Direct Share Purchasing Corporation Pty Ltd (DSPC) for a copy of the unitholder register for the Howard Mortgage Fund. Under the Corporations Act, we are required to provide this information to DSPC. We provided the information to DSPC in late August 2010. We can confirm that DSPC and National Exchange Pty Ltd (NEX), a related entity of DSPC has sent unsolicited offers to unitholders to purchase their units at a price below the current value of the units, i.e. below $1 per unit. If you receive an offer from DSPC or NEX, we strongly recommend that you carefully read the offer including the offer price and timing of any payment and seek financial advice prior to making any decision. Further information about unsolicited offers may be found on ASIC's website MoneySmart in the Investing section.
For more information contact your financial adviser or call our Investor Services team on 13 51 53.