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It is important that you read and consider the risks associated with the investment in the Fund before deciding whether to invest. You should also consider the extent that an investment in the Fund fits your financial objectives and goals, your risk appetite and the risks that other investment opportunities have.
There is no guarantee the Fund will achieve its investment objective. The return of capital and payment of income distributions are not guaranteed.
The Loans in which the Fund invests are subject to normal market fluctuations and other risks inherent in investing in such Loans. There can be no assurance that the Fund will achieve its investment objective, that interest income will be received and distributed or that the Fund will get back the amount invested by Investors in the Fund.
Specific to mortgage investments, there is the risk that the underlying value of the security held as collateral reduces in value, increasing the risk that a loan is not able to be recovered in the event of default.
The value of mortgage investments can be impacted by a range of factors outside the control of the Responsible Entity or Investment Manager, such as a change in interest rates, fluctuating macro and micro economic outlooks, and changes in taxation.
The repayment of capital invested in the Fund is not guaranteed. This means that you could lose some or all of your investment in the Fund.
There is a risk that a Borrower may not be able to meet its financial obligations. This may be for a wide range of reasons, including a change in the individual financial or other circumstances of a Borrower or a change in the economic climate generally.
The financial position of the Borrower can be influenced by the value of their assets, general economic and specific industry conditions. If a Borrower defaults under their respective contractual arrangements, there can be no guarantee that all of the principal and interest owing by the Borrower will be recovered.
The Investment Manager will assess a Borrower’s creditworthiness. This assessment is only an opinion and creditworthiness may change after the Loan is made.
The performance of the Fund is highly reliant on the Investment Manager and third party service providers.
The Fund’s investment is subject to the risk of loss arising from the organisational systems and processes, technology, people, external circumstances, regulatory and compliance frameworks and all other potential matters which directly and indirectly impact operations of the Fund and the Fund’s service providers. Adverse impacts may arise internally through human error, technology, or infrastructure changes, or through external events such as third-party failures or crisis events.
To manage this risk, each of the RE and the Investment Manager service providers have risk and compliance procedures in place to ensure adequate controls are in place for operations, such as technology systems reviews and backups and compliance and review of legal and other regulatory requirements.
There is no guarantee that the security provided in support of a Loan will be sufficient or effective to cover any losses incurred as a result of a default by a Borrower. Where such security is insufficient or ineffective, this may result in diminished investment returns to Investors. Although all valuations will be performed in line with the Responsible Entity’s valuation policy, there is a risk that valuations given to underlying securities may not be accurate, resulting in an actual LVR that is higher than calculated upon loan application. The higher the LVR the greater the risk that a Loan may not be fully recovered in the event of default.
Australia is a relatively high tax jurisdiction with complex tax laws. An investment in the Fund may give rise to a variety of complex tax issues for the Fund, some of which may relate to special rules applicable to certain types of investors.
Prospective Investors are urged to consult their own tax advisers with specific reference to their own situations concerning an investment in the Fund.
These are risks specific to the Fund. These risks include that the Fund could terminate, the fees and expenses of the Fund could change, CW RM Limited may be replaced as responsible entity, CW IM Pty Ltd may be replaced as investment manager and the investment team may change. There is also a risk that investing in the Fund may lead to a different result than investing in the market personally because of income or capital gains accrued in the Fund and the consequences of investment by and withdrawal of other investors. If any of these risks are realised, the returns an Investor receives from the Fund may be reduced.
The Investment Manager is responsible for providing investment management services to the Fund and for managing the Fund’s investments on a day-to-day basis. If the Investment Manager fails to do so effectively, then this could negatively affect the Fund’s performance. In particular, there is a risk that the Investment Manager may fail to anticipate movements in the market, fail to manage the investment risks appropriately or fail to properly execute the Fund’s investment strategy. These factors could have an adverse impact on the financial position and performance of the Fund.
This is the risk that key individuals are no longer able to fulfill their obligations in respect of the investment or administration of the Fund. The performance of the Fund may be dependent on the management skill of one or more individuals. If key personnel are no longer able to fulfill their obligations there is a risk that the Responsible Entity, the Investment Manager or other service providers may not be able to find suitably qualified replacement personnel and the performance of the Fund may suffer as a result.
Legal, tax, regulatory and government policy changes, as well as changes in generally accepted accounting policies or valuation methods, in the Australian and international investment environment may occur during the term of investment in the Fund. These changes may have negative impacts on the way in which the Fund is regulated and/or impacting income and capital returns from an investment. Changes in political situations and changes to foreign tax positions can also impact on the Fund. The Australian taxation consequences of an investment in the Fund, detailed in Section 10, have been based on taxation legislation as at the date of this PDS. Future changes in Australian tax legislation or in the interpretation of that legislation may adversely affect the tax treatment of the Fund, or of the investors or the tax treatment of a specific investment of the Fund.
Neither the performance of this investment nor the repayment of Investor contributions subscribed is guaranteed. You may be required to pay tax on income from the Fund even though you have not received that income from the Fund. Investors should seek their own independent taxation advice before deciding to invest in the Fund.
There is a risk of fraud, data loss, business disruption or damage to the information of the Fund or to an investor’s personal information because of a threat or failure to protect the information or personal data stored within the Responsible Entity’s, Custodian’s and the Investment Manager’s IT systems and networks or the IT systems and networks of our service providers.
An investment in the Fund is designed to be held for a minimum amount of time depending on the Unit. Once an Investor has pledged money to a specific type of Unit, the money invested cannot be redeemed unless the Responsible Entity, in its absolute discretion, determines otherwise in accordance with the terms of the Constitution.
Before investing, Investors should therefore carefully consider the fixed term nature of an investment in the Fund on the basis that their investment in the Fund will not generally be available for redemption until the end of the investment term of their selected particular Unit.
The Responsible Entity may from time to time face conflicts between its duties to the Fund as trustee and its duties to other trusts which it manages or its own interests.
The Responsible Entity will manage any conflicts in accordance with its conflicts of interest policy, the Constitution, ASIC policies and the law. The Responsible Entity will ensure related party transactions are only entered into if it is in the best interests of the existing unit holders. This means the Responsible Entity will ensure related party transactions are conducted at arm’s length and on commercial terms or better.
All decisions relating to related party transactions are fully documented to evidence the due diligence carried out by the Responsible Entity, and if it is not clear that the transactions falls within the arm’s length criteria, member approval will be sought.
All related party transactions will be disclosed to unit holders.
The Fund has no operating history upon which Investors may base an evaluation of its likely performance. The success of the Fund’s investment activities will depend almost entirely on the Investment Manager’s ability to carry out the proposed investment strategy successfully
Pandemics, such as COVID-19, and any associated Government response, can have significant disruption to society and the economy and can prevent businesses from normal operations. It is unknown how long the impact of the current COVID-19 pandemic will continue. The revenue of the Fund and the value of the Units may therefore be negatively impacted as a result of the pandemic and the Government response. Many of the other risks in this section may also be exacerbated by the pandemic and the consequential disruption.
It is important to note that not all risks can be foreseen. It is therefore not possible for the Investment Manager to protect the value of the Fund’s investment from all risks.
A deficiency in documentation could, in certain circumstances, adversely affect the return and recovery of a Loan. This may make it difficult for the Investment Manager to enforce a Loan and other security in respect of the Loan and may also affect the ability to recover any penalties imposed against the Borrower.
The Fund will indemnify the Responsible Entity against claims, liabilities, costs and expenses incurred by it by reason of its activities on behalf of the Fund or the Investors, save in respect of any matter resulting from the Responsible Entity’s fraud, negligence, or breach of trust in relation to the Trust.
Prospective Investors should be aware that the investment may be influenced by various factors external to the Responsible Entity and Investment manager’s control, including but not limited to:
The performance of this investment, the repayment of capital or of any particular rate of return, is not guaranteed by the Responsible Entity, the Investment Manager, their directors or their associates.