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anyone any opinion on this property fund? will this be a scam/treasure?

Trilink Property Fund, an investment fund product that pools investor contributions and then lend these funds to experienced and reputable property developersfor "seed capital," but only after having met the strict lending criteria laid down by the fund’s Investment Committee. Through this arrangement, an investor has a direct link to theunderlying mortgages held by the fund.

The Opportunity

The Funds offer a 10-14% total return yearly and a level of security in a way that has never existed before, maturity payable at the end of the investment term. Not only that, you will receive a bi-yearly payout. Fund and investor is assured through enforcement of a "Tripartite Protection Agreement" that reduces costs and fixed price contracts to developers, significantly reducing risk, and ensures completion of the development project. To make sure you have confidence and security in our property funds, an Australian Trustee regulated by ASIC is appointed to handle all fund matters.

(17-09-2012, 11:59 PM)pianist Wrote: [ -> ]anyone any opinion on this property fund? will this be a scam/treasure?

Trilink Property Fund, an investment fund product that pools investor contributions and then lend these funds to experienced and reputable property developersfor "seed capital," but only after having met the strict lending criteria laid down by the fund’s Investment Committee. Through this arrangement, an investor has a direct link to theunderlying mortgages held by the fund.

The Opportunity

The Funds offer a 10-14% total return yearly and a level of security in a way that has never existed before, maturity payable at the end of the investment term. Not only that, you will receive a bi-yearly payout. Fund and investor is assured through enforcement of a "Tripartite Protection Agreement" that reduces costs and fixed price contracts to developers, significantly reducing risk, and ensures completion of the development project. To make sure you have confidence and security in our property funds, an Australian Trustee regulated by ASIC is appointed to handle all fund matters.

If you, the investor, are getting 10-14% annually, that is the effective borrowing cost (before the fund manager's fees) to the developer. Why would "experienced and reputable" developers want to borrow at 10-14% per year in today's low interest rate environment?

Possible reasons:

1. The developments are highly risky e.g. hotel on the Diaoyu/Senkaku islands, condo on yet-to-be-reclaimed land. No bank is willing to lend any money.

2. The financing is junior to any outstanding debt. So if the developer fails, the bank will take the property, and you as the investor will lose everything.

3. The whole thing is a scam and there is in fact no real trustee holding the funds on behalf of the investors.

IMHO anybody claiming to lend "experienced and reputable" property developers money at 10-14% per year is either amazingly naive or a conman. Anyone who is reputable and experienced will either have plenty of seed capital, or know where to find it at way less than 10-14% per year.

Comparisons with landbanking operations will probably come to mind. Key differences:

a. In landbanking you are not lending anyone money, you are BUYING an interest in the land;

b. In landbanking, the landbanking company makes its money by SELLING you the land, not by developing the land;

c. In landbanking the investment term is unknown, the land could be bought by a developer next year or next decade. Assuming the land title is good, this uncertainty is the key risk you take,

In the case of this Trilink, you are lending money at very high rates to a developer who has to develop and sell the land in order to repay you within a fixed term. The developer is taking on a big risk, while from the investor's viewpoint it looks wonderful.

But don't forget - if something goes wrong, who can you sue, and where? Are you going to fly to Australia to sue? If not, is there anybody in Singapore that you can sue? Are there any assets in Singapore you can seize?

If something is too good to be true, it probably is.

As usual, YMMV.

Hi d.o.g. ,
What is YMMV ? Thanks.

(18-09-2012, 08:09 AM)cfa Wrote: [ -> ]Hi d.o.g. ,
What is YMMV ? Thanks.

Your Mileage May Vary - meaning your views may be different.

(18-09-2012, 09:17 AM)Musicwhiz Wrote: [ -> ]

(18-09-2012, 08:09 AM)cfa Wrote: [ -> ]Hi d.o.g. ,
What is YMMV ? Thanks.

Your Mileage May Vary - meaning your views may be different.

Thanks Musicwhiz.

Actually guys, I am looking at a relatively high risk play in the form of american mortgage backed securities REITs. The annual yield is 12-13% and in fact last few years returns are about 20% if include capital gain.

Go research this sector and see if worth it. I am deciding whether to enter via basket of REITs or through a fund that specializes in this. QE3 and recovering US real estate market are the drivers here.

Anyone looked at this sector before. Sample names include Two Harbour

greypiggi. i am just afraid might have missed the boat on that one in terms of the bulk of the meat.

that said, with qe3 driving all sorts of yield compression behaviors I think the higher yielding instruments will continue to appreciate in the short/medium term. my personal take would be to go for a basket of reits because it's just so hard to evaluate any sort of fund managers in this field?