Ebisu fund

Posted on 1st February 2017 by Trevor Reynolds in Blog |Finance in Focus

A new investment option is a fund run by ourselves at the Banner Group. The Banner Asset Management Ebisu Income fund domiciled in the Isle of Man.  We have worked hard over the last 6+ years to achieve this.

Banner Ebisu Income Fund

BAM started the Ebisu Fund in 2010, initially as a bridge lending fund; over time this has developed into an alternative income fund. The fund is doing very well and has earned an average return to investors of 13.78% p.a. since inception.

BAM is not a hedge fund and is not investing for speculative property appreciation – we are lending our funds to property developers.  The loans are structured to cover the build costs and we manage this process from the first $ to the last.  All the developments are usually 75% (or higher) pre sold with 10% deposits normally taken on the units sold.  Loans are usually for a term of 18 to 24 months. Once the building is complete, settlements are made, the loans are repaid. The Banner Ebisu fund is usually invested in 12-15 projects at any one time.

All the loans are 100% asset backed with full recourse personal guarantees so they are fully dischargeable in the event of default.

Banner Wholesale Fixed Interest Income Fund

The BAM Wholesale Fund began in 2011. The Wholesale fund took a unique approach to lending in Australia, where we would only look at first mortgage loans and sub-schemes established for each individual loan eliminating any co-mingling of funds from other sub-schemes. Each investor choses his or her investment.   BAM has managed over AU$ 1 billion in loans since inception.

One of the major reasons BAM is able to lend at attractive rates is because the banks have reduced their exposure to commercial lending due to capital adequacy ratios, as mortgage debt is not considered “liquid” for these purposes.  The inability of Australian banks to source sufficient capital from abroad has also meant that they have considerably less money to lend across Australia, as one third of the country’s mortgage debt was financed by wholesale funds from overseas.  Banks have, therefore, adopted very stringent, almost unworkable, lending guidelines so as to reduce their commercial mortgage debt and meet these capital restrictions. The banks’ withdrawal from commercial property lending activities presents significant opportunities for BAM.

Now that BAM is of sufficient size and liquidity we have fully opened our fund offerings to retail investors. Our initial two offerings have investment minimums beginning from AUS$500,000 and AU$ 5 million respectively.

The Banner Asset Management Ebisu Income Fund, domiciled in the Isle of Man, us now be available for a minimum investment of AUS$25,000, putting money to work in the same tried and tested investment process.  At the retail level we anticipate returns in the 10-12% range. We believe these returns will continue for the next few years at least. With–from our point of view–a high degree of confidence in the integrity and security of the fund process.

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