Targeting 5% p.a. for First Mortgage & 12% for Equity Returns | Track Record of No Capital Losses

“We have a singular focus: to find and fund quality and profitable Sydney development sites on a first mortgage basis – delivering consistent returns to our investors in one of the safest and most liquid property markets in Australia.

KD Funds is a classic first mortgage fund specifically focused on new stock, with over 40 years of development, construction, and finance experience amongst the management team.”

Paul McIntyre, Head of Investor Relations, KD Funds

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INVESTMENT SPECIALITY : First Mortgage Fund

The First Mortgage Fund lends exclusively to Sydney/NSW property transactions, focusing on achieving quality stock that can also be held for residual income or delayed sale. Its point of difference is the high level of focus given to all development elements  – identifying and mitigating risks not apparent to the average investment manager or developer.

The Fund targets a particular mid-market transaction size that is often too large for small private lenders and too small for the low-cost institutional private lenders that have entered the market.

KD is uniquely positioned to fund all residential density classes ranging from land subdivisions to townhouse and apartment projects.

All potential projects undergo a rigorous assessment process before the independent custodian reviews the recommendation to ensure it meets the Fund’s investment criteria.

INVESTMENT HIGHLIGHTS

KD provides two investment offerings:

  • First Mortgage Fund: It targets a net 5% per annum return with quarterly distributions.
  • Preferred Equity Fund: It targets a 12% return net of fees with annual distributions.

The Manager co-invests a minimum of 10% and takes a true first loss position, with no management fees charged until the investors’ capital is returned.

KD Funds provides monthly reporting to its investors, conducts site audits, and has regular Q&A sessions with decision-makers.

TRACK RECORD

KD has deployed more than $30M in the last 12 months, with multiple distributions and repayments to investors and borrowers with no capital losses.

The Fund has demonstrated successful transactions across the whole breadth of product mix, including land subdivision, townhouses, and multi-units.

THE OFFER

KD Funds offers sophisticated investors the opportunity to co-invest with the Manager in quality Sydney metro residential property mortgage-backed securities.

The target fund size is $50M with a 70/30 split across the Mortgage Fund and Equity Fund. KD aims to have less than five transactions at any one time.

A borrower entity segregates mortgages with industry best-practice first mortgage securities. At the same time, the Equity Fund is secured by second-ranking mortgages plus first-ranking preferred security on all shareholder equity in the project (with step-in rights and the right to assign the First Mortgage).

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