trilogy funds corporate profile

Corporate Profile

02 TRILOGY FUNDS | CORPORATE PROFILE

Trilogy Funds Management Limited ACN 080 383 679 ABN 59 080 383 679 AFSL 261425Trilogy Capital Services Pty Ltd ACN 109 457 838 ABN 62 109 457 838

IMPORTANT: This document has been prepared as general information only. While due care and caution has been taken in the preparation of this information, Trilogy Funds reserves the right to amend this material as additional information becomes available.

Property is at the core of everything we do

03TRILOGY FUNDS | CORPORATE PROFILE

Trilogy Funds has a strong background in structuring and managing property investments. Trilogy Funds’ reputation is based on the experience and strengths of its key executives. The skills of the executive team cover property lending, mortgage management, financial services, accounting and law; a mix that makes Trilogy Funds specialists in property investment.

The Trilogy Funds “hands-on” approach to directly managing investments, ensures close monitoring of the finer details, which leads to opportunities to identify and add value for

investors. This management style lays a solid foundation for investment performance.

Trilogy Funds’ core investment offerings are its mortgage and property trusts. Property is the key commonality, which capitalises on the strengths of the Trilogy Funds’ team and their experience. Trilogy Funds also lends first mortgage investment funds to borrowers for the construction and development of property. The lending team are highly experienced, active managers driven by a commitment to deliver stable returns to investors.

Overview

Trilogy Funds was established in 1998. Following a merger in 2004 with a wider group of senior management professionals, Trilogy Funds harnessed a wealth of expertise in property, particularly single property trusts and first mortgage trusts.

Three of Trilogy Funds’ founders, Mr Rodger Bacon, Mr John Barry and Mr David Hogan, were responsible for establishing the single property trust business of Challenger International. Trilogy Funds’ Head of Property Syndicates Peter Arnold established Austgrowth Property Syndicates, which became a leader in small, single asset property trusts. Mr Bacon, Mr Barry and Mr Hogan were also involved in the acquisition and operation of the Howard Mortgage Trust, which during their tenure with Challenger International, grew into the largest first mortgage trust in Australia with funds exceeding $3 billion under management. Mr Philip Ryan, Trilogy Funds’ Managing Director, both as a lawyer and a fund manager, has specialised in property and funds management for many years.

Trilogy Funds’ senior managers have collectively been involved in over 40 single property trusts with a property value of over $600 million. The latest single property trust offered by Trilogy Funds for iSelect’s $24 million head office in Melbourne, with a lease until 2021, was fully subscribed.

Trilogy Funds expertise in property is well recognised, with approaches made for it to assume management of a number of distressed property trusts and first mortgage trusts. These approaches have seen Trilogy Funds become the Responsible Entity of a number of the Australian Property Growth Fund property trusts valued at $60 million*; the Pacific First Mortgage Fund (formerly City Pacific First Mortgage Fund) valued at $521 million*; and the LM Wholesale First Mortgage Trust valued at $58.7 million* (*Value when Trilogy Funds became Responsible Entity).

We know property

ACTIVE MANAGEMENT PERFORMANCE ADDING VALUE

Actively managing products to ensure Trilogy Funds deliver results to the best of the team’s ability

Generating positive returns for Trilogy Funds’ Investors

Seeking opportunities to create additional value within investments

Trilogy Funds’ key performance values are:


Trilogy Funds acts as the Responsible Entity for a number of funds. Funds under management total approximately $230 million (as at 31 December 2013). Trilogy Funds has taken over major funds from other Responsible Entities, demonstrating its fund management experience is highly sought after.

Proven Fund Managers

Funds Under Management

Trilogy Funds has a strong track record of structuring and managing property related investments to generate returns for investors.

Trilogy Funds has three property trusts currently under management and has six completed trusts.

Property trusts

Completed property trusts by type

Seeking outcomes for Investors

The interests of its 14,000 Investors are top of mind for the Trilogy Funds’ team, who are always looking for ways to manage risk, create additional value and ultimately maximise Investor’s returns.

Investors by investment product

Property trusts Mortgage trusts

Office Industrial

Retail Other

Property trusts Mortgage trusts

Single property trusts Single property trust investments present an opportunity to earn long term income with the potential of capital gains. A property is identified by Trilogy Funds’ property team that has the potential to provide long term cash flow to investors; and the possibility of capital gains upon sale of the asset. The property is acquired by a trust and normally geared below 50 percent. It is managed through the term of the trust, normally five to six years, both from a strategic and ongoing maintenance position. Cash flow is generated through long term leases to quality tenants. Fixed annual rent increases provide growth in the rental income and property value. In addition, due to depreciation charges, distributions may provide a portion of income which is tax deferred. At the end of the term, the property is sold and the net proceeds repaid to investors.

Case study CANBERRA PROPERTY SYNDICATE

Acquisition price $11.2 million (March 2002)

Valuation upon Trilogy Funds’ appointment

$16 million (As per the financial report dated 30 June 2011).

Sale price $18.3 million (October 2012)

Average distribution paid over the term

9.72% p.a.

Represents the total average cash distributions paid over the term of the syndicate, excluding capital proceeds from the sale of the building.

Capital gain 63%

The capital gain represents the difference between the sale price and the purchase price only and does not take into account sale costs.

The Trilogy Funds difference

Trilogy Funds negotiated a 15 year lease with Lowes Woolworths for their first Masters concept store in Australia, which significantly increased the value of the property upon sale.

Case study TRILOGY MELBOURNE OFFICE SYNDICATE - CHELTENHAM

Investment type Single asset, closed end unlisted property syndicate

Acquisition price $24 million

Equity raise $15.5 million

Valuation upon purchase

$24 million (June 2013)

Tenant iSelect Limited

Lease term 10 years (1 July 2011 – 30 June 2021)

Annual rental growth Fixed at 4%

Investment term 5 years

Distributions 8.75% per annum paid monthly (Forecast only and for the periods ending 30 June 2014 and 2015. Basis of forecast calculations and key assumptions are detailed in the PDS).

Property solutions Trilogy Funds offers solutions to a range of clients for their property requirements. This expertise is a valuable asset to clients with requirements to lease, own or manage property for their operations. These solutions can take the form of advice, negotiation, property acquisition, re-leasing assistance or the structuring of finance. The property team can add value through restructuring lease renewals; managing site redevelopments; organising the purchase of property into an investment trust structure; or acquiring properties to hold or lease.

First mortgage trustsMortgage fund expertiseTrilogy Funds is expert at managing mortgage funds. The Trilogy Monthly Income Trust was established in 2007 by Trilogy Funds and has paid investors a distribution every month since inception*. In 2009, Trilogy Funds became Responsible Entity (RE) for the City Pacific First Mortgage Trust, valued at over $521 million. In 2012, Trilogy Funds also became RE for the LM Wholesale First Mortgage Trust, valued at $58.7 million.

As a pooled mortgage trust, the Trilogy Monthly Income Trust offers registered, first mortgage loans to borrowers for the development of property. As a pooled fund, investors share a proportional amount of the risk and the income from all the Trust’s loans. Investors receive a monthly distribution based on the net returns from the loans and cash held. The Trust only offers property related loans, more specifically loans for the construction, development or re-financing of Australian property. Many borrowers approach Trilogy Funds for consideration and are carefully assessed. Trilogy Funds only accepts loans that meet strict lending criteria. Loan amounts must also be less than the project’s total value, with the Loan to Valuation Ratio limited to 70% maximum of the ‘as if complete’ value.

*Past performance is not an indicator of future performance.

Case study TRILOGY MONTHLY INCOME TRUST

Established February 2007

Type Pooled mortgage fund

Assets Registered first mortgages over property

Average net rate since inception to 31 December 2013

7.75% p.a.

Rolling average net rate for the 5 years ended at 31 December 2013*

7.56% p.a. *Average rate paid calculated on a rolling annual basis from 1 January 2009 to 31 December 2013 net of fees and management costs; and assuming no reinvestment of distributions. This average rate is for Allocated Units only. Cash Units and units the subject of a withdrawal request during this period would have received returns based on cash rates that were almost certainly lower than Allocated Units.

1 2007 is comprised of only 2 months being May and June 2007 2 2014 is for 6 months (July 2013 - December 2013)

Trilogy Monthly Income Trust average net returns (by financial year)


Our reputation is based on the experience of key executives

Trilogy Funds’ Executive Directors and Senior Management on average have over 29 years’ experience and have been members of our team for over 8 years.

Robert WillcocksBA, LLB (ANU) LLM (Syd)

Independent Non-Executive Chairman

Mr Willcocks is formerly a senior partner with Mallesons Stephen Jaques Lawyers, now King & Wood Mallesons.

Since then he has been a Corporate Advisor in a range of industry sectors. Mr Willcocks is currently a director of ASX listed ARC Exploration Limited and Living Cell Technologies Limited as well as a Hong Kong listed company, APAC Resources Limited.

Mr Willcocks has held the roles of Director and Chairman for numerous listed public companies over the past 20 years.

He is also a former member of the Australian Commonwealth Government’s International Legal Advisory Committee for the term of its programme and of the Australia Vietnam Business Council.

Rohan ButcherBSc Quantity Surveying, Dip Project Management, Lic Real Estate Agent, Registered Builder

Non-Executive Director

Mr Butcher is a qualified Quantity Surveyor and licensed Real Estate Agent and Building Practitioner.

He has specialist expertise in design management, cost planning, cost control and project management. Mr Butcher has been involved in a number of major projects within the residential, retail and commercial property sectors. He has also held a number of senior roles with major public and private companies, including Watpac and Multiplex Constructions.

Mr Butcher is an independent member of the Trilogy Funds Lending Committee and a member of the Urban Development Institute of Australia.

Experienced team

Board

On average our team members have over 29 years’ experience


Rodger Bacon BCom (Merit) UNSW, AAICD, SFFin

Executive Deputy Chairman

Years with Trilogy Funds: 10 | Years of experience: 40

Mr Bacon is a co-founder of Trilogy Funds Management Limited. He has more than 40 years of experience in the Australian financial services industry. Prior to founding Trilogy Funds, he was an Executive Director of Challenger International Limited. Mr Bacon’s responsibility at Challenger included strategic planning, establishing of ASX listed financial services companies and lending. He was involved in the establishment of Challenger Annuities in 1997-98 and the building of a $2.7 billion property portfolio.

Before Challenger, Mr Bacon worked with the Schroder Merchant Banking Group for 15 years, and was involved in all aspects of funds management. He was a member of the Merchant Bank Board in Australia for 6 years. Mr Bacon is a Fellow and a past National Board Member of the Financial Services Institute of Australasia and an Associate in the Australian Institute of Company Directors.

Experienced team

Philip Ryan LL. B, Grad Dip LP, Grad Dip SIA, Dip Mortgage Lending, FFIN, FTIA

Managing Director


Mr Ryan is a co-founder of Trilogy Funds Management Limited. He established the funds management business that evolved into Trilogy Funds. He is also a lawyer with 31 years’ experience, and acts as General Counsel for Trilogy Funds. Mr Ryan has significant experience in commercial and corporate law. He is a Fellow of the Financial Services Institute of Australasia.

Prior to starting the business that became Trilogy Funds, Mr Ryan was a partner in a Brisbane law firm McCarthy Durie Ryan Neil Lawyers for 20 years, which is now known as McCarthy Durie Lawyers.

He is a member of the Trilogy Funds Compliance and Investment Committees.

John Barry BA, ACA,F FIN

Executive Director


Mr Barry is a co-founder of Trilogy Funds Management Limited and member of the Institute of Chartered Accountants in Australia. He is also Chairman and Independent Non-Executive Director of Westpac RE Limited, a wholly-owned subsidiary of Westpac Banking Corporation.

Before joining Trilogy Funds, Mr Barry was a senior consultant with ABN AMRO in their reverse mortgage and infrastructure businesses. Prior to that he was a Board Director at Challenger International and was responsible for the Howard Mortgage Trust before becoming Head of Property responsible for the development of Challenger’s property backed Annuities.

Board cont...

Peter Arnold Head of Property Syndicates Years with Trilogy Funds: 3 | Years of experience: 30

Mr Arnold has more than 30 years’ experience in Australia’s commercial, industrial and retail property markets. He also has more than 20 years of funds management experience, gained with one of Australia’s leading unlisted Real Estate Investment Trusts, Austgrowth Property Syndicates Limited. Mr Arnold’s expertise spans the property value chain, including acquisition, development, management, and distressed property work outs.

Prior to joining Trilogy Funds in 2011, Mr Arnold co-founded Austgrowth Property Syndicates Limited, the Responsible Entity for over $230 million of syndicated commercial, industrial and retail property funds.

David Hogan AFAIM, AFin

Head of Property Assets


Mr Hogan has substantial property finance industry experience. He was a co-founder of Trilogy Funds Management Limited in 2004, and applies his experience in risk management, capital structuring, lending, acquisitions and property syndications to the management of Trilogy Funds’ property assets. Mr Hogan is also the Chairman of the Trilogy Funds Lending Committee and is a member of the Treasury Committee.

Mr Hogan was previously an Executive Director of Challenger Property Capital Limited and played a significant role in the development of its global commercial property portfolio, which had an estimated value in excess of $2.6 billion.

Justin Smart BA Com, CPA

Chief Operating Officer


Mr Smart was appointed in July 2007 and is a Certified Practising Accountant. His role with Trilogy Funds is to manage operations incorporating finance, administration, marketing, information technology and human resources. Prior to joining Trilogy Funds, Mr Smart held various senior management roles within the financial services sector. He worked with Aussie Home Loans and QBE Insurance.

Mr Smart acted as the Financial Controller for the Australian Commonwealth Government’s HIH Insurance Relief Scheme; and was the Financial Controller for Charles Taylor Consulting (UK listed Mutual Insurance Manager) for their Australian operations. Mr Smart commenced his career with a multinational Chartered Accounting firm, specialising in audit. He was seconded across various Australian offices as well as their New York office. Mr Smart is a member of the Trilogy Funds Treasury Committee.

Paul Wood BAppSc (Property Economics), GCPM Business Development Manager - Lending


Mr Wood was appointed in 2007 and has extensive experience in property lending. He has held positions with AMP Bank, Suncorp Metway and ANZ, where he was involved in all aspects of the property development and the investment process. Mr Wood is responsible for sourcing and structuring all new lending opportunities and manages all loans from inception to completion.

Senior management


Organisational structureTrilogy Funds holds an Australian Financial Services Licence.

Trilogy Funds

Board

Executive Directors

Managing Director

Compliance Manager

Chief Operating Officer

DistributionProperty Mortgage Lending

Property Solutions

Property Acquisition

Property Asset

Management

Committees

LendingFinance

InvestmentHuman

Resources

TreasuryInvestor

Relations

WorkoutMarketing

and Communications

External Compliance

Audit, Compliance and Risk Management

Administration


For more information, please visit our website www.trilogyfunds.com.au

BRISBANE (Registered office)

Level 23 10 Eagle Street Brisbane QLD 4000

GPO Box 1648 Brisbane QLD 4001 1800 230 099 (within Australia) or + 61 7 3039 2828

+61 7 3039 2829

SYDNEY

Level 13 56 Pitt Street Sydney NSW 2000

+61 2 8028 2828

+61 2 8028 2829

MELBOURNE

PO Box 508 Collins St West Melbourne VIC 8007

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