Overview of Fund and Its Investment Strategy
Investment in USA residential property will be made through a USA based real estate investment trust (the REIT) which Quantum Funds Management Ltd, (the responsible entity “RE”) has established.
The Fund’s investment strategy is to invest in the REIT Interests and the REIT will in turn, invest in USA residential property.The REIT’s investment strategy will be to invest in residential property in selected USA cities, (known as the Preferred Cities), which the RE believes offer an attractive investment opportunity created by:
- The increased number of property foreclosures.
- The recent steep decline in residential property values across the United States.
- High rental yields available on residential property created by the fall in property values.
- Historically low borrowing costs.
- Historically strong AUD against the USD.
The steps to implement the investment strategy are summarised briefly below:
- The Fund, via the REIT will purchase residential property (the Property) in the Preferred Cities from distressed sellers for cash.
- Most Property will require some repair or refurbishment, prior to leasing.
- The Property will be leased as soon as practicable.
- Once the Property is leased (and there is a sufficient pool of similar Property leased) and the rental income for that Property has stabilised, the REIT will seek to finance the Property on a non recourse or limited recourse basis, recycling the capital for further property acquisitions.