Private lending is a $2.8 trillion market – how best to monetise this opportunity

“Vado is Latin for progress and advance. The changing lending landscape (even more so post COVID-19) has created a favourable environment for Investors in private debt. We can either watch it happen or be a part of this exciting opportunity.”

Simon Arraj, Founder

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INVESTMENT SPECIALITY: Private non-bank lending secured by real estate assets

Investment Speciality

Vado Private connects astute Investors (who act as Lenders) with selected Borrowers (who meet strict criteria) in one-on-one first mortgage arrangements that are mutually beneficial to both parties. Investors virtually act as their own bank and participate (if preferred) in the due diligence and final decision-making process. Comprehensive details of loan transactions, including all relevant borrower and property security information, are provided.

Loans are secured against all major property asset classes including residential, commercial and industrial for both development and investment. All lending and investment opportunities are strictly on a registered first mortgage security basis. This investment mandate does not accommodate for lending in subordinated structures such as second mortgages, preferred equity or caveat loans.

Risk assessment and management is the core of the Vado Private business model. Optimal caution is exercised in Borrower loan assessment with the key objectives to preserve Investor capital and generate above-market risk-adjusted returns.

Unique Investing Methodology 

Investors often think that high yield is synonymous with high risk.

This is untrue.

Vado Private is foremost a risk manager. Their due diligence and risk appetite reflect this cautious tone, combining the knowledge and disciplines of law, banking, finance and property development. All proposals are independently assessed according to key metrics which include:

  • Market risk
  • Asset risk
  • Sponsor / Borrower risk
  • Construction risk
  • Legal risk

Vado Private don’t limit themselves to traditional views of risk, whether that means using sophisticated analytics or even having the courage to say no.

The result is a new way of embracing risk that drives superior results.

Whilst brokers always champion their borrowers, Vado Private assess every transaction with an investor bias as capital preservation is our priority,

Key Points of Difference

  • First loss piece. The principals of Vado Private can invest up to 10% in each loan as a first loss position. Should a loss be incurred on a transaction Vado Private money is lost first. By way of example, if the LVR was 65% and first loss piece was 20%, the LVR coverage for the investor would be 58.50%.
  • Vado Private origination and management fees are not payable when the loan is funded. Their fees are performance based and are payable on loan discharge (when the loan is repaid). This demonstrates a clear alignment of interest.
  • Customised investment vehicle metrics based on an investor’s risk appetite and return expectation. They can tailor a product based on specific investor requirements around first loss piece, LVR, loan term, security type, security location etc.

Track Record

Since 2017, Vado Private has circulated $150 million into the private debt market. Over the past 38 months, their team has settled 47 transactions with 0 losses and an average of 8.95% p.a. return on capital. Diligent in execution, the average transaction time from origination to settlement is only 13 days without compromising their strict risk and compliance framework.

Team Experience

Simon Arraj is Vado Private’s head of distribution and loan origination

Simon has over 20 years of experience in the real estate finance industry. Commencing his career in credit risk at the Commonwealth Bank of Australia, Simon’s determination to succeed drove him to establish his own property finance company in 2002. Simon is also a director of a property development company that acquires land for the purposes of developing residential apartments. This company has been trading since 2011.

Simon holds a Bachelor of Science (Mathematics) and Masters in Commerce (Finance). He also holds a Diploma in Mortgage Broking & Management and a Diploma in Business Management (Real Estate).

Danny Arraj is Vado Private’s head of legal and advisory

Danny is a Managing Partner of Blackstone Waterhouse – a specialist planning, property and construction firm which acts for major developers and head contractors in projects across Australia. Blackstone Waterhouse Lawyers were recognised for their expertise in Construction & Infrastructure in the 2018 Asia Pacific Legal 500 legal directory survey, which is widely considered the world’s largest independent referral guide for legal services.

Danny holds a Bachelor of Law and a Bachelor of Arts, and is a Solicitor of the Supreme Court of NSW.

Dr. David Penn heads up Vado Private’s Investment Committee

David is an experienced and astute entrepreneur of over 40 years. David is a renowned Dentist in Double Bay, graduating from Sydney University in 1978, after which he opened his own practice in Sydney’s Eastern Suburbs.

Within a few years, he recognised a need for Australians to access affordable Dental prosthetics, and in 1983, he established Southern Cross Dental Laboratories (SCDL), which grew to become one of the leading state-of-the-art dental laboratories in the world. SCDL was recently acquired and floated on the Hang Seng.

In 2011, David won the Ernst & Young Entrepreneur of the Year Award in the services division for his excellence at SCDL.

In 2015, David established the Postgraduate School of Dentistry, Australia’s first private dental school which teaches niche postgraduate qualifications to General Dentists.

David is also known for his prowess in the Sydney Property Market and has been very successful in his dealings over the years.

The Offer 

A unique opportunity to invest on a one-to-one arrangement with the Directors of Vado Private. This is suitable for sophisticated and wholesale investors (within the meaning of the Corporations Act 2001) seeking a higher-yielding risk-adjusted return. Key investment metrics are:

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Investment Highlights

Vado Private’s portfolio of loans have performed very well despite challenging conditions including:

  • Downturn in the residential property market between November 2017 and June 2019.
  • Impact of COVID-19 on the global economy and local property market.

Vado Private’s unique due diligence process and proven track record places them in a strong position to capitalise on future opportunities regardless of market conditions.

For a confidential conversation please contact Simon Arraj on +61 2 9059 2577 or email simon@vadoprivate.com.au

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