Topaz Investment Criteria

The Manager’s investment philosophy is governed by strict Investment Criteria specific to this Fund. At a minimum, although not limited to the following, investments in a particular project must satisfy certain Fund Investment Criteria (Investment Criteria) namely; 

(a) Minimum investment of A$1 million and maximum investment of A$3 million;

(b) Maximum senior debt in any project (ranking in priority to the Fund investment) not to exceed 65% of the project’s on completion valuation (net of GST);

(c) Credit approved senior debt construction funding must be in place;

(d) Appropriate planning and development approvals (DA) issued;

(e) Maximum loan (Senior Debt plus Mezzanine debt) to valuation ratio (LVR) not to exceed 80% of the project’s on-completion valuation net of GST; 

(f) Construction projects must have a fixed price and term building contract with an experienced and reputable builder;

(g) Appropriate level of unconditional pre-sale contracts necessary for drawdown of construction finance from the Senior Lender;

 h) To the extent permitted by the Senior Lender, all loan investments made by the Fund must be secured by second ranking securities such as a registered second mortgage;

(I) A maximum exposure of 30% of Total Capital Commitments of the Fund, at any point in time, to any one borrower;

(j) All Loans, made by the Fund, will rank in priority to partner or sponsor equity

(k) Demonstrated capacity for the borrower to repay the drawn funds and accrued interest within 2 years of initial investment;

(l) Senior project lender to permit the Manager to attend project meetings to ensure continued compliance with all loan covenants;

(m) Where possible, if the borrower fails to meet loan covenants (or other investment agreement requirements), the Manager may co-operate with the Senior Lender to appoint appropriate parties necessary to complete and realise the project assets to maximise recovery of monies  in default;

(n) Demonstrated sales and marketing strategy to ensure orderly realisation of project assets;

(o) Identification of investment risks and structuring of the investment to mitigate such risks and maximise returns; and

(p) Project debt finance will be non-recourse to Investors of the Fund.

© Copyright 2018 CVC Venture Managers