Measures in place to provide investor confidence

The following measures are incorporated within the IPO Wealth Fund’s investment strategy:

Capital Protection Reserve

The Fund will maintain a capital protection reserve equivalent to up to 10% of the gross asset value of the Fund (Capital Protection Reserve).

The Capital Protection Reserve will initially be zero and will be built up over time from 100% of the performance fees generated until a reserve equivalent to a percentage of gross asset value of the Fund is achieved as follows:

• 10% of the Fund’s gross asset value below $20 million; plus
• 7.5% of the Fund’s gross asset value above $20 million and below $50 million; plus
• 5% of the Fund’s gross asset value above $50 million.

The Capital Protection Reserve will provide capital protection to Investors from potential future capital losses incurred in any given year. The Capital Protection Reserve will be used to top up the Fund’s asset pool in the event of any capital losses however the balance of the reserve may be insufficient to cover any capital losses incurred.

The balance of the Capital Protection Reserve as at 30 June 2018 was $526,802.74. There is also a provision of $651,358.89 for performance fees which will be added to the Capital Protection Reserve at 30 June 2019.

Please request a copy of the Fund’s disclosure document for more information.

Cash Reserve

The Fund will aim to keep 10% of its capital invested in cash and cash equivalent assets (such as term deposits offered by ADIs) or such similar credit worthy and liquid investments for liquidity purposes as determined by the Investment Manager from time to time. Any funds pending distribution to investors may be similarly invested at the discretion of the Investment Manager.

General Security Agreement

The Fund’s loan to IPO Wealth Holdings Pty Ltd t/a Mayfair 101 Holdings (Borrower) includes a General Security Agreement (GSA) provided by the Trustee on behalf of the Fund.  Generally speaking, a GSA provides security over all of the presently acquired and future property acquired by the Borrower.

Purchase Money Security Interest

The Fund’s loan to IPO Wealth Holdings Pty Ltd t/a Mayfair 101 Holdings (Borrower) includes a Purchase Money Security Interest (PMSI) provided by the Trustee on behalf of the Fund.  Generally speaking, a PMSI provides specific security over any assets purchased by the Borrower using the monies loaned by the Borrower from the Fund.

Financial Services Licence

IPO Wealth Pty Ltd is a Corporate Authorised Representative of DH Flinders Pty Ltd, holder of Australian Financial Services Licence No 353001.

No Personal Loans

The Fund’s investment strategy does not allow for personal loans.

Legal Adviser Engagement

The Fund’s Loan Agreement with IPO Wealth Holdings Pty Ltd, General Security Agreement and Purchase Money Security Interest were prepared and reviewed by qualified Australian legal practitioners.

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