Investors Exchange Investment Fund

Investors Exchange Investment Fund ARSN 120 933 093
Product Disclosure Statement – Part 1
Responsible entity: Investors Exchange Limited ACN 116 489 420

AFS Licence 299024
28242375v2
Table of contents
1 Key investment features ------------------------------------------------------------------------ 4
2 Investment objectives and benefits of investing ---------------------------------------------- 9
3 ASIC benchmarks and disclosure principles -------------------------------------------------- 13
4 Investment details ------------------------------------------------------------------------------ 21
5 Lending policies --------------------------------------------------------------------------------- 26
6 Management ------------------------------------------------------------------------------------ 29
7 Investment considerations and risks ---------------------------------------------------------- 31
8 Fees and other costs ---------------------------------------------------------------------------- 35
9 Taxation ----------------------------------------------------------------------------------------- 40
10 Material documents ----------------------------------------------------------------------------- 42
11 Additional information -------------------------------------------------------------------------- 44
Glossary -------------------------------------------------------------------------------------------------- 49
Corporate Directory ------------------------------------------------------------------------------------- 51
28242375v2
Important information
Responsible entity and issuer
This is a Product Disclosure Statement (PDS) for the Investors Exchange Investment Fund
ARSN 120 933 093 (Fund).
The name and contact details of the responsible entity are:
Investors Exchange Limited

112 Siganto Drive
Helensvale
QLD 4212
Ph: 1300 737 903
Email: info@InvestorsExchange.com.au
Web: www.InvestorsExchange.com.au
Investors Exchange Limited ACN 116 489 420 (IEL, Manager, us, we and our) is the issuer of, and
solely responsible for, this PDS. This document is Part 1 of the PDS and dated 6 March 2014. This Part 1
and the Part 2 with which it is distributed, make up the PDS for the issue of units in the Fund (Units).
Each part of this PDS must be read in conjunction with the other part. Neither part of the PDS will be
distributed without the other part.
We hold AFS Licence 299024, issued by ASIC, which authorises it to act as responsible entity of the Fund.
Capital and investment risk
An investment in the Fund is an investment in a registered managed investment scheme. An investment

in the Fund is not a bank deposit, bank security, bank liability, and is subject to investment risk, including
the loss of, or delays in the payment of, income or capital.
Neither IEL, its related bodies corporate or any of their respective directors or officers, guarantee the
repayment of capital from the Fund or the investment performance of the Fund. Investments in the Fund
are not guaranteed or underwritten by the Manager, its related bodies corporate or any of their
respective directors or officers.
In particular, some of the risks involved with an investment in the Fund are considered in
section 6 of Part 1.
Reliance on PDS only
No person is authorised by us to give any information or to make any representation in connection with
the offer of Units to you that is not contained in this PDS, comprising Part 1 and Part 2, or in Updated
Information provided us.
Any information or representation not contained in this PDS or the Updated Information cannot be relied
upon as having been authorised by us.
28242375v2 1
The issue of this PDS is authorised solely by us and none of our subsidiaries or related bodies corporate
are responsible for any statement or information contained in this PDS.
PDS available electronically
If you are printing an electronic copy of this PDS, comprising Part 1 and Part 2, you must first print all
pages including the Application Form. If you make this PDS available to another person, you must give
them the entire electronic file or print-out, including the Application Form. A paper copy of this PDS can
also be obtained free of charge on request by calling us on (07) 5532 1054.
Units cannot be issued unless you use the Application Form attached to either a paper or electronic copy
of this PDS. The Application Form included in Part 2 contains a declaration that you have personally
received the complete and unaltered PDS prior to completing the Application Form. You should read
Parts 1 and 2 of this PDS in their entirety before completing the Application Form.
Offering restrictions
The Offer under this PDS is available to persons receiving the PDS within Australia and New Zealand only.
The distribution of this PDS in jurisdictions outside Australia and New Zealand may be restricted by law
and persons who come into possession of it should seek advice on and observe any such restrictions.
This PDS does not constitute an offer to any person to whom, or in any place in which, it would be illegal
to make that offer.
No financial product advice
The information contained in this PDS is general information only and does not take into account your
individual objectives, financial situation or needs. You should review this PDS carefully and assess
whether the information is appropriate for you and talk to a financial adviser before making an
investment decision.
Anti-money laundering legislation
We may require further information from you from time to time to comply with our obligations under the
Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth). By applying for Units under this
PDS, you undertake to provide us with all additional information and assistance that we may reasonably
require.
Privacy Act
Please read the privacy statement in section 11.10 of Part 1 of this PDS. By signing and returning the
Application Form you consent to the matters outlined in that statement.
Glossary, illustrations and currency
Defined terms and abbreviations used in this PDS are explained in the Glossary. The assets depicted in
photographs in this PDS are for indicative purposes only and are not assets of the Fund unless otherwise
noted.
All references in this PDS to ‘$’ are references to Australian dollars unless stated otherwise.
Enquiries
If you have any questions or require assistance with completing the Application Form or additional copies
of the PDS, please contact us on 07 5532 1054 (within Australia) or +61 7 5532 1054 (outside Australia).
28242375v2 2
Chairman’s letter
Dear investor
On behalf of all of the team at Investors Exchange Limited we welcome the opportunity to introduce to
you, what we believe to be, an exciting investment offering which enables you to participate in a
mortgage scheme which will pay regular distributions to investors throughout Australia and New Zealand.
Our registered managed investment scheme, known as Investors Exchange Investment Fund (or simply
the Fund), provides investors with the ability to select specific loan investments jointly with other
like-minded investors. You don’t need to have loan assessment skills to participate in the Fund.
Investors Exchange Limited, as fund manager, will ensure that all loans to qualifying borrowers are
properly assessed to minimise the risks associated with secured lending.
The Fund is a managed investment scheme registered with ASIC where a separate class of units is
allocated for each specific loan. The structure enables you to participate in the loan selected by you and
you do not have exposure to other loans made by the Fund. Consequently, each loan stands
independently of all other loans.
Our process is relatively straightforward. We search for worthwhile lending opportunities within Australia
and New Zealand which met our stringent loan criteria of the standing of the borrower, security offered,
valuations (if applicable), and lending margins and risk assessment. Upon completing our due diligence
on each borrower we then issue a letter of offer to the borrower outlining the term and conditions of the
advance.
Typically, investors have a variety of risk profiles. Some investors prefer to invest in development or
construction loans, some investors prefer their loans to be secured by income producing property whilst
others prefer to invest in loans to a specific industry whereby the borrower may be a lender themselves
providing consumer finance on industry specific assets. Our scheme structure is flexible enough to
recognise these differences in investor profiles. Each offering will be quite specific about the type of loan
and type of security being offered to investors.
I encourage you to read this Part 1, together with Part 2 which provides specific details of a Loan
Investment, and look forward to welcoming you as an investor.
Yours truly
Glenn Griffin
Chairman
28242375v2 3
1 Key investment features
The following table summarises the key features of an investment in the Fund and provides
section references for further information. You should read this PDS in full to properly
understand your investment in the Fund.
Description Summary Refer Part 1,

section
Investment strategy and structure
Manager Investors Exchange Limited ACN 116 489 420, 6.1
holder of AFS Licence 229024
Investment strategy The Fund will invest in a portfolio of secured loans 4.2
(Loan Investments) provided to borrowers for
the purposes of on lending, construction and
development, business investment or general
corporate purposes.
Investment options By investing in the Fund, you will be offered 4.4
exposure to the Loan Investments which you
select.
You can invest in as many Loan Investments as
you desire.
Each Loan Investment is separate from the other
Loan Investments in the Fund. Each Loan
Investment will be made up of one or more
investors and you can select the Loan
Investments in which you invest.
Lending policies We have lending policies which set out the criteria 5
under which Loan Investments are made.
Security All Loan Investments will be secured by any, 4.3
some or all of:
(a) a registered fixed and floating charge over
the borrower’s assets;
(b) a registered mortgage over Land; or
(c) other security approved by us having
regard to our lending policies.
The details of the security arrangements for each
Loan Investment will be detailed in the Part 2
relating to that Loan Investment.
Offer structure Part 1 of this PDS provides information about the N/A
Fund’s investment objectives and structure,
details of IEL and its Directors, benefits and risks
of investing in the Fund, information on fees and
expenses which may be payable by investors, a
summary of the taxation implications of investing
in the Fund and a summary of the terms of key
documents and other information relevant for you
as an investor.
Part 2 of this PDS contains information about each
28242375v2 4
section
particular Loan Investment including details of the
borrower, loan security and fees payable by the
borrower.
Part 1 and Part 2 together constitute the entire
PDS and you should read both in their entirety
before making your decision to invest.
Existing Loan The Part 2 for each Offer will contain a summary N/A (refer to
Investments of existing Loan Investments currently made by Part 2)
the Fund, including the concentration of Loan
Investments advanced to borrowers.
Investment details
Issue price The issue price of each Unit is $1. N/A (refer to
Part 2)
Minimum investment Generally, $5,000 and then in increments of N/A (refer to
$1,000. The Part 2 will include the minimum Part 2)
investment amount for the applicable Loan
Investment.
Maximum There is no maximum investment amount, subject N/A
investment to our right to refuse to accept any application at
our sole discretion or to accept any application for
an amount less than the amount indicated on the
Application Form.
Minimum We will only proceed with a Loan Investment if N/A (refer to
subscription applications have been received for the minimum Part 2)
subscription applying to that Loan Investment.
The Part 2 will disclose the minimum subscription
applying to a Loan Investment.
Maximum The maximum subscription will represent the N/A (refer to
Subscription maximum amount which will be advanced to a Part 2)
borrower.
The Part 2 will disclose the maximum subscription
applying to a Loan Investment.
Term The investment term of Loan Investments will N/A (refer to
vary from 12 months to three years, depending Part 2)
on the term of the particular underlying loan. The
term of each loan will correspond with the
maturity date of each Loan Investment that you
invest in.
The investment term for each Loan Investment
will be set out in the Part 2 relating to that Loan
Investment.
Distribution rates Distribution rates will ultimately depend on the 4.7
income generated by the Loan Investment which
you invest in.
An indicative rate for each Loan Investment,
which may be variable or fixed, will be set out in
28242375v2 5
section
the Part 2 relating to that Loan Investment.
The Distribution rate will be calculated by
reference to the interest rate payable by the
borrower less Fund expenses and our fees.
Payment of Subject to availability, the frequency of 4.8
Distributions Distributions will vary between Loan Investments
but we expect Distributions will generally be paid
monthly or quarterly in arrears. The Part 2 will
disclose the frequency with which any
Distributions will be paid for a particular Loan
Investment.
Distributions will be paid by electronic funds
transfer into your nominated Australian financial
institution account.
Withdrawals Funds invested will be repaid once the borrower 4.9 to 4.15
repays the loan corresponding to the Loan
Investment in which you have invested.
Where the borrower is permitted to make partial
repayments of the loan during the loan term,
funds will also be repaid proportionately when
partial repayments are made by the borrower.
Generally, other than partial withdrawals due to
partial repayment of a loan, you will not be
permitted to withdraw your investment in any
particular Loan Investment prior to the maturity
date of that Loan Investment and repayment of
the corresponding loan.
ASIC benchmarks ASIC has developed 8 benchmarks and 3
and disclosure 8 disclosure principles for unlisted mortgage
principles schemes to assist retail investors understand the
risks, assess the rewards being offered and decide
on whether these investments are suitable for
them.
The Fund is not currently subject to the
benchmarks or disclosure principles as it does not
have at least 50% of its non-cash assets invested
in loans secured by a mortgage over real
property. However, we have reported against the
benchmarks and disclosure principles as the Fund
intends to have a majority of its Loan
Investments, by value, secured by a mortgage
over real property.
Fees and other costs
Establishment fee There are no establishment fees payable. 8.2
Contribution fees There are no contribution fees payable. 8.2
Withdrawal fees No withdrawal fee is payable if Units are 8.2 and 8.3
redeemed upon completion, or partial completion,
of a Loan Investment or prior to the Loan
28242375v2 6
section
Investment being made.
If, at our absolute discretion, we consent to an
investor withdrawing their investment while
invested in a Loan Investment we may charge an
early withdrawal fee of up to 5% of the amount
withdrawn.
Management fee Management fees are estimated to be between 8.2 and 8.3
1% per annum and 5% per annum of the value of
a Loan Investment and will vary between Loan
Investments. Typically, these fees are deducted
from the interest paid by the borrower and are
not deducted from the amount you invest.
The management fee applicable for each Loan
Investment will be disclosed in the corresponding
Part 2.
Fund expenses We are entitled to be paid or reimbursed for all 8.2 and 8.3
expenses and liabilities in connection with
operating the Fund. These expenses are
expected to be up to 1.5% per annum of the
value of each Loan Investment.
Typically, Fund expenses will be paid from the
interest payments made by the borrower or
otherwise reimbursed by the borrower and not
from the amount you invest.
Removal fee We may also be entitled to be paid a fee if we are 8.2 and 8.3
removed as responsible entity in recognition of
the work performed in the establishment and
management of the Fund prior to removal.
Other fees We may also be entitled to be receiving a loan 8.2 and 8.3
establishment fee, early repayment fee or both
from the borrower.
The Part 2 of the Loan Investment will disclose
the amount of any such fees payable by the
borrower.
Features
Benefits The benefits of investing in the Fund include: 2.2
(a) you can choose the Loan Investments in
which you invest;
(b) you can invest in as many Loan
Investments as you like;
(c) regular Distributions (subject to
availability); and
(d) a defined investment term for each Loan
Investment.
Risks All investments involve risks. There are a number 7
of risks associated with an investment in the
Fund. Some of the significant risks include:
28242375v2 7
section
(a) borrower default;
(b) inadequacy of security;
(c) delays associated with recovering debts
from defaulting borrowers;
(d) construction and development risk;
(e) lack of diversification;
(f) Loan Investment concentration; and
(g) Fund structure.
Cooling-off A 14 day cooling-off period applies to investments 11.9
in the Fund.
Reporting to You will receive: 2.5
investors (a) confirmation of your investment;
(b) regular Distribution statements;
(c) an annual taxation summary; and
(d) an annual periodic statement.
You can elect to be sent, either by post or
electronically, annual financial statements for the
Fund by marking the appropriate box in the
Application Form.
Additional information
Tax Investing in the Fund may have taxation 9
consequences for you. We recommend you seek
professional tax advice before investing in the
Fund.
Complaints Any complaints can be made to: 11.4
resolution (a) by post:
Complaints Manager
PO Box 459
OXENFORD QLD 4210; or
(b) by phone: 07 5532 1054.
How to contact us? Call (07) 5532 1054 (within Australia) or Corporate
+61 7 5532 1054 (outside Australia) or refer to Directory
the Corporate Directory.
28242375v2 8
2 Investment objectives and benefits of investing
2.1 Investment objective
The Fund’s investment objective is to provide you with an investment offering regular
distributions where your investment capital is secured by a registered charge over assets,
mortgage over Land or other security and where you have the ability to choose which Loan
Investment you participate in.
2.2 Benefits of investing in the Fund
Investing in a contributory loan fund gives you greater choice than a pooled fund investment as it
allows you to select a Loan Investment which aligns with your investment criteria. Some of the
benefits of investing in the Fund are summarised as below:
Investment choice and flexibility
An investment in the Fund will provide you flexibility and choice as you can select which Loan
Investments you participate in because you receive specific details of a Loan Investment prior to
deciding to invest. Accordingly, as an investor, you have the ability to personally decide which
Loan Investment to invest in based on your personal investment criteria and circumstances and
therefore you can then choose an investment and security which meets your objectives.
A separate Part 2 will be prepared for each Loan Investment which provide details of that
particular investment opportunity. You can select the Loan Investment to invest in once you
have considered the corresponding Part 2.
Investment knowledge
Details of each Loan Investment will be summarised in the corresponding Part 2. You can invest
in a particular Loan Investment by completing the Application Form forming part of the applicable
Part 2 and returning it along with your application monies in accordance with the instructions in
the Part 2.
The Part 2 will contain specific details of the Loan Investment including:
(a) details of the borrower;
(b) the amount of the loan to be advanced to the borrower;
(c) the commencement date of the Loan Investment;
(d) the loan expiry date of the Loan Investment;
(e) the lower and higher rates of interest payable by the borrower;
(f) how interest will be calculated and the frequency with which interest (and therefore any
Distributions) will be paid;
(g) details of the security provided for the loan;
(h) the amount, frequency and notice period for any partial loan repayments (if any);
(i) the loan-to-valuation ratio (if applicable);
28242375v2 9
(j) a summary of the terms of the loan agreement and security documents to be executed
by the borrower or other security provider;
(k) the fees payable by the borrower to us and any other fees we may receive;
(l) details of any valuation of the security property (if applicable) including the name of the
valuer, the valuation amount, valuation methodologies adopted and valuation date; and
(m) insurance particulars for the security (if applicable).
You will have the comfort of knowing that you are investing in the Loan Investments you select
and, unlike a pooled investment fund, you are not invested in any other Loan Investments and
you will not be exposed to the risks of those other Loan Investments. Performance of your
investment is dependent upon the performance of the Loan Investment in which you are invested
and you do not need to monitor the performance of other Loan Investments.
Regular distributions
Distributions will generally be paid monthly or quarterly in arrears, subject to availability. The
frequency with which Distributions are expected to be paid for each Loan Investment will be
disclosed in the corresponding Part 2.
Risk diversification
You can elect to invest in a number of Loan Investments thereby diversifying your investment
risk away from a single Loan Investment. By choosing your particular Loan Investments, you can
select an investment which suits your particular goals and objectives, in light of your present
situation, rather than being exposed to a pool of assets, some of which you may find not suitable
for you.
Direct deposit of Distributions
Distributions are automatically deposited to your nominated Australian financial institution

account via electronic funds transfer.
Regular reporting
You can keep track of your investment with regular distribution statements and annual tax
statements.
2.3 How do I invest in the Fund?
Information about a particular Loan Investment will be contained in Part 2 of this PDS, including
the details listed in section 2.2, the amount to be raised, including, where applicable, any
minimum or maximum subscription amounts.
To invest in a particular Loan Investment, and therefore the Fund, please read the PDS,
comprising of both Part 1 and Part 2, and complete and lodge a paper copy of the Application
Form attached to the Part 2 in accordance with the instructions on that form.
Completed Application Forms should be returned to:
By mail: The Investment Manager

PO Box 459
OXENFORD QLD 4210
28242375v2 10
By delivery: The Investment Manager
c/- Etariros
The Application Form must be accompanied by payment of your application money in accordance
with the instructions set out in the Part 2.
When you apply to invest in the Fund, your money is held in trust in an applications account until
we accept your application. We have an absolute discretion to decline an application and are not
required to give a reason. We will only proceed with a Loan Investment if valid applications have
been received for the minimum subscription amount sought under the applicable Part 2.
If your application is declined or the minimum subscription for a Loan Investment is not achieved
within the offer period specified in Part 2 or, in any case, four months of the date of the Part 2
for that Loan Investment (unless the offer period is extended in accordance with the
requirements of the Corporations Act), your application money will be returned promptly, with
interest (if any) earned on your application money less any fees charged by the bank and any
taxes we are required to withhold from the interest paid to you. However, you will not receive
less than the amount of your application monies.
Any interest earned on the application money for which Units are issued will form part of the
assets of the Fund.
2.4 Transfer of Units
You may transfer your Units to another person but there is no established secondary market
(e.g. stock exchange for the Fund).
However, we will maintain a list of proposed buyers and sellers of Units, and investors can be
added to, or obtain a copy of, the list by contacting us. If you wish to sell your Units during the
term of your Loan Investment, you will need to contact a potential buyer and agree the terms of
any sale, including price, as we will not list buy or sell prices or facilitate the sale or purchase of
Units. To transfer your investment, you must find a buyer and send us a valid a transfer request
signed by both parties. You can obtain transfer forms by contacting us, using the details in the
Corporate Directory.
You should consider your investment as illiquid.
2.5 Reporting
You will receive written confirmation of your investment in the Fund as well as the following
regular updates:
(a) regular Distribution statements typically either monthly or quarterly, depending upon the
Distribution frequency applying to your Loan Investment;
(b) an annual taxation statement; and
(c) an annual periodic statement.
The Fund’s annual financial statements can, when available, be downloaded from our website at
www.InvestorsExchange.com.au. Alternatively, if you wish to receive annual financial statements
by mail or email, please tick the appropriate box on the Application Form.
28242375v2 11
2.6 Fund financial information
A copy of the Fund’s most recent financial statements is available from us upon request.
28242375v2 12
3 ASIC benchmarks and disclosure principles
3.1 Legislative background
ASIC has developed eight benchmarks and eight disclosure principles for unlisted mortgage
schemes, being schemes which have, or are likely to have, at least 50% of their non-cash assets
invested in mortgage loans (being loans that are secured by a mortgage over real property)
and/or unlisted mortgage schemes. The benchmarks and disclosure principles are designed to
help retail investors to understand the risks, assess the potential rewards and to make an
informed investment decision.
The Fund is not currently subject to the benchmarks and disclosure principles as it does not have
at least 50% of its non-cash assets invested in loans secured by a mortgage over real property.
However, we have reported against the benchmarks and disclosure principles as the Fund intends
to have a majority of its Loan Investments, by value, secured by a mortgage over real property.
For the purpose of keeping you informed about any significant changes to the Fund’s compliance
with the benchmarks and disclosure principles, we will report on the Fund’s compliance with the
benchmarks and disclosure principles on our website www.InvestorsExchange.com.au periodically
(usually each quarter). For those investors who cannot access our website, a paper copy of an
updated benchmark and disclosure principle report can be given to you (free of charge) by
telephoning (07) 5532 1054.
3.2 Benchmark disclosure
Criteria Met (Yes/No) Further disclosures and if criteria not met, why
not?
Benchmark 1: Liquidity
For a pooled mortgage scheme, the responsible entity should have cash flow
estimates for the scheme that:
(a) demonstrate the scheme’s capacity to meet its expenses, liabilities and other
cash flow needs for the next 12 months;
(b) are updated at least every three months and reflect any material changes; and
(c) are approved by the directors of the responsible entity at least every three
months.
Not applicable The Fund is a contributory mortgage scheme and is therefore
not required to comply with this benchmark.
For additional disclosure on this benchmark, refer to section
3.3 of this Part 1.
Benchmark 2: Scheme borrowing
The responsible entity should not have current borrowings and should not intend to
borrow on behalf of the scheme.
Yes The Fund does not have any borrowings and we do not intend
to enter into any borrowing arrangements on behalf of the
Fund.
3.4 of this Part 1.
28242375v2 13
not?
Benchmark 3: Loan portfolio and diversification
For a pooled mortgage scheme:
(a) the scheme should hold a portfolio of assets diversified by size, borrower, class
of borrower activity and geographic region;
(b) the scheme should have no single asset in the scheme portfolio that exceeds
5% of the total scheme assets;
(c) the scheme should have no single borrower who exceeds 5% of the scheme
assets; and
(d) all loans made by the scheme should be secured by first mortgages over real
property (including registered leasehold title).
Not applicable The Fund is a contributory mortgage scheme and it is not
required to comply with this benchmark because investors will
only have beneficial interests in the Loan Investments in which
they have elected to invest, not the Fund’s entire Loan
Investment portfolio.
3.5 of this Part 1.
Benchmark 4: Related party transactions
The responsible entity should not lend to related parties of the responsible entity or
to the scheme’s investment manager.
No The Fund may make loans to related parties.
3.6 of this Part 1.
Benchmark 5: Valuation policy
In relation to valuations of the scheme’s mortgage assets and their security property,
the board of the responsible entity should require:
(a) a valuer to be a member of an appropriate professional body in the jurisdiction
in which the relevant property is located;
(b) a valuer to be independent;
(c) procedures to be followed for dealing with any conflict of interest;
(d) the rotation and diversity of valuers;
(e) in relation to security property for a loan, an independent valuation to be
obtained:
(i) before the issue of a loan and on renewal, for development property, on
both an ‘as is’ and ‘as if complete’ basis and, for all other property, on an
‘as is’ basis; and
(ii) within two months after the directors form a view that there is a
likelihood that a decrease in the value of security property may have
caused a material breach of a loan covenant.
Yes The Fund meets the benchmark for loans secured by a
registered mortgage over Land.
For loans secured by a charge or mortgage over assets other
than Land (such as a fixed and floating charge over a
borrower’s assets) we will implement procedures to assess the
adequacy of the security provided, as detailed in the
28242375v2 14
not?
‘Valuations’ row in section 4 of Part 1, as it will generally not
be possible for a valuation of those assets to be undertaken by
a registered valuer.
The key aspects of our valuation policy, applying where the
security is a mortgage over Land, which address the
benchmark are:
(a) we only instruct a panel of selected valuers who are
appropriately registered, have adequate experience
and are independent;
(b) valuers are required to include a statement in their
Valuation report on whether the Valuation complies
with all relevant industry standards;
(c) loans will only be initially advanced if supported by a
Valuation of the security property which is not more
than 3 months old;
(d) in circumstances where we have reason to believe that
the value of the security property has materially
changed Valuations will be updated prior to any
extension of the term of a loan or any increase to a
facility limit;
(e) all security property which is Land must be valued on
an ‘as is’ assessment of the current market value of
the security property; and
(f) where loans are for property development, the
security property must also be valued on an ‘as if
complete’ assessment of the market value of the Land
assuming the project is completed.
3.7 of this Part 1.
Benchmark 6: Lending principles – loan-to-valuation ratios
If the scheme directly holds mortgage assets:
(a) where the loan relates to property development – funds should be provided to
the borrower in stages based on independent evidence of the progress of the
development;
(b) where the loan relates to property development – the scheme should not lend
more than 70% on the basis of the latest ‘as if complete’ valuation of property
over which security is provided; and
(c) in all other cases – the scheme should not lend more than 80% on the basis of
the latest market valuation of property over which security is provided.
No ‘as is’ Valuations
The maximum loan amount will generally be 90% of the
Valuation and may be higher for loans secured over assets
other than Land. The maximum LVR for a loan will be
disclosed in the Part 2 for that Loan Investment.
‘as if complete’ Valuation – Development &
Construction Loans
This type of funding typically involves the loan amount being
based on 90% of the Land Valuation and up to 100% of the
28242375v2 15
not?
projected development costs, as opined by a quantity surveyor
or professional equivalent.
In order to accommodate pre-sales, commissions and
marketing costs may also be included in the loan amount
provided that the maximum loan amount will be no more than
90% of the ‘as if complete’ Valuation.
Each draw down will be against certification from an
independent quantity surveyor, or professional equivalent, on
a cost-to-complete test against funds available to be drawn.
3.8 of this Part 1.
Benchmark 7: Distribution practices
The responsible entity should not pay current distributions from scheme borrowings
Yes Distributions will be sourced from loan interest payments
made by borrowers and not from scheme borrowings.
3.9 of this Part 1.
Benchmark 8: Withdrawal arrangements
For liquid schemes:
(a) the maximum period allowed for in the constitution for the payment of
withdrawal requests should be 90 days or less;
(b) the responsible entity should pay withdrawal requests within the period
allowed for in the constitution; and
(c) the responsible entity should only permit members to withdraw at any time on
request if at least 80% (by value) of the scheme property is money in an
account or on deposit with a bank and is available for withdrawal immediately
(or otherwise on expiry of a fixed term not exceeding 90 days), during the
normal business hours of the bank; or assets that the responsible entity can
reasonably expect to realise for market value within 10 business days.
For non-liquid schemes, the responsible entity should make withdrawal offers to
investors at least quarterly.
No Generally, Investors will only be entitled to withdraw their
investment on the maturity date of their relevant Loan
Investments, which will be subject to the borrower having
repaid their loan.
3.10 of this Part 1.
3.3 Disclosure principle 1 – Liquidity
Liquidity is the measure of cash and cash equivalent assets as a proportion of the Fund’s total
assets and is indicator of the ability of a mortgage fund to meet its short-term commitments.
Liquidity of a mortgage fund may be a risk as the underlying assets of a mortgage fund may not
be easily realised within the period of time required to meet withdrawal requests or other
commitments or expenses.
28242375v2 16
As a contributory mortgage scheme, the Fund is not required to disclose the information required
by this principle. However, as set out above, we have systems in place to manage the Fund’s
cash flows and to ensure that the Fund’s short-term commitments are satisfied.
3.4 Disclosure principle 2 – Scheme borrowing
Where a mortgage scheme has borrowings, this principle requires responsible entities to disclose
the maturity profile and other information relating to the scheme borrowings, including details of
total debts due, why the responsible entity has borrowed the money (including whether the
borrowed funds will be used to fund distributions or withdrawal requests), any material loan
covenant breaches and the risks associated with the scheme’s borrowing and credit facility
maturity profile.
It is important that investors understand the borrowing structure of a mortgage scheme and the
risks associated with that structure. Mortgage funds with high levels of borrowing face the risk
that distributions will not be paid or withdrawals may be suspended so the fund can pay back the
borrowings. Generally, any amounts owing to lenders will rank ahead of investors’ interests.
We do not intend to enter into any borrowing arrangements on behalf of the Fund. Accordingly,
we are not required to disclose the information required by this principle. However, if we did
borrow, the borrowings would be limited to individual Loan Investments and investors will be
notified in the Part 2 for that Loan Investment. The Part 2 will also contain the information
required by this disclosure principle.
3.5 Disclosure principle 3 – Loan portfolio and diversification
Portfolio diversification measures the level of concentration risk in the portfolio of mortgages held
by the Fund. Greater levels of diversification of mortgages by borrower, size, activity and
geographical location, lowers the risk that the Fund would suffer significant loss from default by
any one borrower or class of borrowers.
As a contributory mortgage scheme, the Fund is not required to disclose against this principle. In
particular, investors will only have beneficial interests in the Loan Investments in which they have
elected to invest, not the Fund’s entire Loan Investment portfolio. Further, information in
relation to specific Loan Investments, such as the indicative Distribution rate and terms of the
investment, will be set out in the Part 2 relating to that Loan Investment.
3.6 Disclosure principle 4 – Related party transactions
This principle requires responsible entities to disclose their approach to related party lending,
investments and other transactions, and how such transactions are assessed and monitored to
consider whether the transaction is made with the same rigour and independence as transactions
made on an arm’s length commercial basis.
The Fund may make loans to related parties. If a Loan Investment is proposed to be made to a
related party, this will be prominently disclosed in the Part 2 for the Loan Investment
corresponding to that loan, and the information required by this disclosure principle will be set
out in the Part 2 relating to that Loan Investment.
We have lending policies and procedures for providing Loan Investments to related parties. All
such loans must be assessed in the same way as loans to unrelated parties, will be made on
arm’s length commercial terms and will be subject to compliance with our lending policies,
including loan security.
The Board must approve all loans to related parties and is responsible for regularly monitoring
the Fund’s compliance with these procedures.
28242375v2 17
3.7 Disclosure principle 5 – Valuation policy
For a contributory mortgage scheme (such as the Fund), this disclosure principle requires the
responsible entity to provide investors with information about the valuation of the property
securing a loan in which the investors has, or is being offered, an interest.
The Part 2 relating to a particular Loan Investment will disclose information about the valuation
of the property securing that Loan Investment.
3.8 Disclosure principle 6 – Lending principles – loan-to-valuation ratios
The loan-to-valuation ratio (LVR) is a measure of the amount of the loan provided to borrowers
against the latest valuation obtained in respect of the property. The LVR is an indicator of how
conservative or aggressive a scheme’s lending practices are. Generally, the higher the LVR , the
more vulnerable the scheme will be to a change in market conditions (for example, a down turn
in the property market).
As set out above, for ‘as is’ Valuations, the maximum LVR will generally be 90% but may be
higher for loans that are secured over assets other than Land. The maximum LVR will be
disclosed in the Part 2 for that Loan Investment.
For ‘as if complete’ Valuations, the maximum LVR will generally be 90% of the Land Valuation
and up to 100% of the projected development costs, as opined by a quality surveyor or
professional equivalent.
Where a loan is made for property development, the Part 2 for that Loan Investment will disclose
the criteria against which funds are drawn down. We will also disclose to investors in such Loan
Investment in our periodic updates the percentage (by value) of the completion of the property
under development and the loan-to-cost ratio of that property development.
3.9 Disclosure principle 7 – Distribution practices
This disclosure principle requires responsible entities to explain how the Fund will fund
distributions to Investors and to disclose any risks associated with current distribution practices.
We anticipate that all Distributions will be sourced from interest paid by the borrower under each
Loan Investment during the relevant distribution period. Subject to availability, the frequency of
Distributions will vary between Loan Investments but we expect Distributions will generally be
paid monthly or quarterly in arrears. The Part 2 will disclose the frequency with which any
Distributions will be paid for a particular Loan Investment.
All current and future distribution income is sourced from interest paid by the borrower under
each Loan Investment during each distribution period.
Distribution rates for the Fund are variable between Loan Investments and depend on the
interest income received on each particular Loan Investment that an investor invests in.
Indicative Distribution rates for a Loan Investment stated in a Part 2 are indicative only and
based on the interest rate charged to the borrower less any management fees and estimated
scheme expenses. The actual Distribution rate will be equal to the interest paid by the borrower
less actual management fees and Fund expenses.
They key factors that would have the most material impact on achieving the Indicative
Distribution rates for a Loan Investment and the risk to changes in these factors are:
28242375v2 18
Factors impacting Risk of changes to these factors on Sensitivity analysis
Indicative distributions based on changes to
Distribution rates these factors
Borrower default If the borrower fails to meet interest If a borrower does not
payments the Distribution rate paid to make any interest
investors in a Loan Investment may be payments during a
less than the applicable Indicative distribution period,
Distribution rate. investors in that Loan
Investment will not
receive a Distribution
for that period.
Fund expenses If Fund expenses are higher than If Fund expenses are
estimated, the Distribution rate paid to paid from the interest
investors in a Loan Investment may be received from the
less than the applicable Indicative borrower for a Loan
Distribution rate. Investment and Fund
expenses are 1% per
annum higher than
anticipated, it may
result in the Distribution
rate paid to investors
being 1% per annum
lower than the
Indicative Distribution
rate for that Loan
Investment.
3.10 Disclosure principle 8 – Withdrawal arrangements
This disclosure principle requires responsible entities to explain the Fund’s withdrawal policy and
the ability of Investors to withdraw from the Fund.
Investors will be entitled to withdraw their investment on the maturity date of their relevant Loan
Investments, which will be subject to the borrower having repaid their loan.
Apart from partial withdrawals due to a partial loan repayment by the borrower, or the early
repayment of the loan, investors will generally not be permitted to withdraw their investment in
any particular Loan Investment prior to the maturity date of that Loan Investment.
However, we retain the discretion to allow an investor to withdraw while funds are invested in a
Loan Investment, and such withdrawal may be subject to payment of the early repayment fee by
the borrower.
Units will be redeemed at a fixed price of $1 per Unit. However, if the borrower fails to repay the
entire loan amount, or we are unable to recover the entire loan amount upon enforcing our
security, then you will receive less than the amount you invested in that Loan Investment.
In this case, Units will be redeemed for less than $1 each and the actual redemption amount will
reflect each investor’s proportionate interest in the shortfall in the loan repayment.
When a loan is repaid, we will notify investors in that Loan Investment and they will be able to
redeem their funds or invest in another Loan Investment by completing an Application Form
attached to Part 2 for a Loan Investment.
28242375v2 19
If an investor does not redeem their investment within 30 days of the applicable loan being repaid (and
does not instruct us to invest in another Loan Investment), then we may redeem those Units and pay
those funds to the investor.
28242375v2 20
4 Investment details
4.1 What is the role of the Manager?
We are responsible for the operation of the Fund including identifying Loan Investment
opportunities, assessment and approval of loan applications, setting of loan interest rates,
administration of loans, preparation of loan agreements and security documents, collection of
interest payments and payment of Distributions, repayment of investor funds upon repayment of
the loan, and management of the Fund in accordance with our obligations under our AFS
Licence, the Constitution, Compliance Plan and Corporations Act.
We are licensed by ASIC to act as responsible entity of the Fund.
4.2 Fund investments
The Fund will invest in a portfolio of loans, predominantly provided to corporate borrowers for
the purposes of onlending, construction and development, business investment or general
corporate purposes.
Each loan will form a sub-scheme referred to as a Loan Investment, and each Loan Investment is
separate from other Loan Investments in the Fund. Each Loan Investment may be made up of
one or more investors in the Fund and a different class of Loan Investment Units will be allocated
to each Loan Investment.
The performance of a Loan Investment is subject to the respective borrower meeting its
obligation to pay interest on the loan and to ensure the loan principal is repaid in full at the end
of the loan term. You are not exposed to multiple loans or borrowers. Your investment is
specific to each Loan Investment you decide to invest in.
4.3 Loan Investment security
Each Loan Investment will generally be secured by:
(a) a registered fixed and floating charge over the borrower’s assets; and/or
(b) a registered mortgage over Land provided by the borrower.
Details of the security provided for each Loan Investment will be disclosed in Part 2 relating to
that Loan Investment. This will include details of any collateral security (for example, personal
guarantees) to be granted in favour of the Fund.
We may accept security other than a charge or mortgage as described above, provided we
consider the security provided adequate having regard to our lending policies. In such
circumstances, details of the security underlying the Loan Investment will be provided in the
corresponding Part 2.
Where a loan is secured by a fixed and floating charge over the borrower’s assets, we will
generally require a borrower to either provide audited financial statements no more than three
months old to demonstrate the adequacy of the assets securing the loan or details of assets of
the borrower securing the loan and confirmation as to the value of those assets.
Where the Loan Investment is secured by a registered first or second mortgage over Land, the
adequacy of that mortgage security will be supported by a valuation of the Land that has been
independently verified by a registered professional panel valuer. A valuer must demonstrate they
28242375v2 21
have appropriate experience and qualifications to conduct the valuations for mortgage security
purposes.
Where a second mortgage is taken as security, the maximum loan amount will be determined by
aggregating the first and second mortgage loans and the aggregate will be limited to 90%of the
‘as is’ valuation or where a property development loan is completed, 90% of the ‘as if complete’
valuation.
4.4 Loan Investment information
The details of each Loan Investment will be contained in the corresponding Part 2 seeking
subscriptions for that Loan Investment. The Part 2 will provide the following information in
relation to the proposed Loan Investment:
(a) details of the borrower;
(b) the amount of the loan to be advanced to the borrower;
(c) the commencement date of the Loan Investment;
(d) the expiry date of the Loan Investment;
(e) the lower and higher rate of interest payable by the borrower;
(f) how interest will be calculated and the frequency with which interest (and therefore any
Distributions) will be paid;
(g) details of the security provided for the loan;
(h) the amount, frequency and notice period for any partial loan repayments (if any);
(i) the loan-to-valuation ratio;
(j) a summary of the terms of the loan agreement and security documents to be executed
by the borrower;
(k) fees charged to the borrower and other fees or expenses we may receive;
(l) details of any valuation of the security property (if applicable), including the name of the
valuer, the valuation amount, valuation methodologies adopted and valuation date; and
(m) insurance particulars for the security (if applicable).
4.5 Related party loans
We do not anticipate loans will be provided to related parties. However, if loans are made to our
related parties, they will be assessed in the same way as loans to unrelated parties and will be
subject to compliance with our lending policies, including loan securities. The Corporations Act
requires that loans to related parties be made on arm’s length commercial terms.
Where the borrower is a related party, this will be disclosed in the Part 2 for that Loan
Investment. All loans related parties will require Board approval and the Board is responsible for
regularly monitoring the Fund’s compliance with these procedures.
28242375v2 22
4.6 General Units
If your application is accepted and the relevant minimum subscription achieved, you will be
issued General Units and your application money will be transferred to the Fund’s general
account pending the making of a loan to the borrower. At the time the loan is made, your
General Units will convert to the class of Loan Investment Units corresponding to your particular
Loan Investment.
General Units will earn the applicable commercial interest rate offered by the Fund’s bank. The
indicative Distribution Rate for a Loan Investment only applies when General Units convert to
Loan Investment Units and the applicable loan is made to the borrower.
4.7 Distribution rate
General Units
Distribution rates will be variable and will ultimately depend upon the commercial interest rate
offered and paid by the Fund’s Australian banker. We will publish this rate on our website at
www.InvestorsExchange.com.au.
Loan Investment Units
Distribution rates, which may be variable or fixed, will ultimately depend upon the income
generated by the Loan Investment in which you have invested any amounts deducted from that
income in order to meet the Fund’s operating expenses and our fees. Both Fund expenses and
our fees will be deducted from the income of the Fund prior to Distributions being paid to
investors.
An indicative Distribution rate, which may be variable or fixed, will be set out in the Part 2 for
each Loan Investment.
The indicative Distribution rate, will be calculated by reference to the interest rate payable by the
borrower under the loan less Fund expenses and management fees.
4.8 Payment of Distributions
Payment of Distributions will be dependent upon the borrower meeting its obligations and making
loan interest payments in full and on time.
Subject to the availability of funds, Distributions will be paid by electronic funds transfer into your
nominated Australian financial institution account. Distributions will generally be payable monthly
or quarterly in arrears and the Distribution frequency for a particular Loan Investment will be
disclosed in the corresponding Part 2.
The transfer of Distributions to your account will typically occur within 5 Business Days of the end
of each Distribution Period as disclosed in the Part 2 for each Loan Investment.
4.9 Repayment
General Units
You can apply to redeem your General Units at any time prior to conversion to Loan Investment
Units. We will normally process a redemption request within 5 Business Days of receiving a valid
redemption request in a form acceptable to us. You can obtain a redemption request form by
contacting us.
28242375v2 23
If your General Units convert to Loan Investment Units, due to the loan being made to the
borrower under the terms of Loan Investment you select, prior to us processing your redemption
request, your redemption request will not be satisfied.
Loan Investment Units
Once your funds have been applied to a particular Loan Investment and General Units converted
to Loan Investment Units, you will generally not be permitted to withdraw your investment prior
to the borrower repaying the loan corresponding to your Loan Investment.
Repayment of your investment is dependent upon the borrower repaying the loan. When the
loan is repaid, we will notify you and you will be able to redeem your funds or invest in another
Loan Investment by completing an Application Form attached to Part 2 for a Loan Investment.
4.10 Partial repayment of any Loan Investment
The terms of a loan may enable the borrower to make a partial repayment of the loan during the
loan term. If the borrower can make partial loan repayments, this will be disclosed in the Part 2
for that Loan Investment, as well as details of the conditions attaching to partial repayments,
such as any minimum repayment amount, further repayment increments and notice
requirements.
Where a borrower partially repays the loan, we will notify you and you will be able to redeem the
proportion of your funds which corresponds to the portion of the loan repaid or invest those
funds in another Loan Investment by completing an Application Form attached to Part 2 for a
Loan Investment.
4.11 Early repayment of a Loan Investment
Subject to the terms and conditions of a loan, a borrower may be able to repay the loan prior to
its maturity. The Part 2 for each Loan Investment will disclose whether the borrower can repay
the loan early and the conditions of early repayment, including any early repayment fee payable
by the borrower to us.
If a loan is repaid early, we will notify you and you can choose to:
(a) redeem your funds; or
(b) invest in another Loan Investment by completing the Application Form attached to the
Part 2 for that Loan Investment.
4.12 Compulsory repayment
If:
(a) your funds are invested in General Units for more than three months without being
applied to a Loan Investment; or
(b) you have not redeemed your investment, or part of your investment, within 30 days of
the loan being repaid in part or in full (and have not instructed us to invest in another
Loan Investment),
then we may redeem those Units and pay these funds to you.
28242375v2 24
4.13 Subsequent investments
If you would like to increase your investment, you can do so by investing in another Loan
Investment via completing the Application Form attached to a further Part 2 and paying the
application money.
4.14 Repayment of investments – our obligations
You will only be entitled to receive repayment of the capital you have invested once the relevant
borrower repays the loan in which you have invested. If the borrower repays part of the loan
during the term, you will be entitled to receive repayment of the proportionate amount of the
capital you have invested.
We maintain lending policies with the objective of protecting the capital invested by investors and
facilitating the repayment of capital at the appropriate time. However, we do not guarantee the
performance of the investment offered in this PDS, including the repayment of capital invested.
Generally, Units will be redeemed at a fixed price of $1 per Unit, unless a borrower fails to repay
the loan in full. If this occurs, investors who have invested in that Loan Investment may suffer a
capital loss. If a capital loss is sustained, the loss will be shared proportionately among investors
who have invested in that Loan Investment.
4.15 Early withdrawal by investors
Generally, you will not be permitted to withdraw your investment prior to the maturity date of the
Loan Investment (except for partial withdrawals due to a partial repayment of the loan by a
borrower). However, we may, at our discretion and subject to the requirements of the
Corporations Act, allow early withdrawal prior to the payment, or partial repayment, of a Loan
Investment. We may charge an early withdrawal fee to facilitate an early withdrawal.
An early withdrawal is completely at our discretion and investors should not invest with an
expectation they will be able to redeem their investment prior to maturity of their Loan
Investment.
4.16 Borrowings
The Constitution allows us to borrow on behalf of the Fund and to pledge the assets of the Fund
as security. Borrowings may be used to meet unusual redemption activity, pay Distributions or
due to unforseen delays in recovery of loan principal. Any borrowings will be limited to individual
Loan Investments and the relevant investors will be clearly notified of this in the Part 2 for that
Loan Investment.
Sources of borrowings may be from independent lending institutions, parties related to the
Manager or both. All borrowings must be on a commercial arm’s length basis. Any borrowing
facility will be used to assist us to prudently manage the Fund.
28242375v2 25
5 Lending policies
All loans provided by the Fund must satisfy a range of risk management and lending guidelines
as set out in our Lending Policies Manual as varied from time to time. The principal lending
policies are as follows:
Loan purpose The Fund will only provide loans for business or investment
purposes including providing finance to lenders who lend to the
retail market, working capital finance and general corporate
finance. Loans will not be provided to individuals to acquire or
invest in residential land or for domestic, household or personal
use.
Borrowers who obtain loans from the Fund will generally be
entities who require finance with a higher loan-to-valuation ratio
than traditional lenders, such as banks, are prepared to lend
against or who require funds in a more timely manner than
available from traditional lenders.
Lending ratio The maximum loan amount will be 90% of the value of the
(Loan-to-valuation security property and may be higher for loans secured over assets
ratio (LVR)) other than Land, and will be stated in the Part 2.
For development and construction loans, the maximum loan
amount will typically be based on 90% of the value of the Land
and up to 100% of the development costs, as determined by a
quantity surveyor or professional equivalent.
For these loans, in order to accommodate presales, marketing
costs and sales commissions may also be included in the relevant
loan amount, provided the maximum loan amount does not
exceed more than 90% of the ‘as if complete’ Valuation.
For property development loans, before each drawdown is
advanced to the borrower, an independent quantity surveyor
professional equivalent must satisfy the cost to complete the
project, which we will assess having regard to the LVR applying
for that loan.
Our Board sets lending ratios having regard to market conditions
and economic forecasts. Our Board will review lending ratios for
specific asset classes periodically and may vary them from time to
time to reflect prevailing conditions.
The maximum LVR for each loan will be disclosed in the Part 2 for
the corresponding Loan Investment.
Interest rates We will determine interest rates, which may be fixed or variable,
and fees payable by borrowers, having regard to prevailing
market rates, security provided, borrower history, loan terms and
loan conditions. Interest rates charged by the Fund will be set at
rates which provide an appropriate risk margin over the cost of
funds.
Acceptable Loans will be primarily secured by either:
securities (a) a registered first ranking fixed and floating charge over
the borrower’s assets;
(b) a registered first or second mortgage over residential,
commercial, industrial or rural Land located in Australia;
28242375v2 26
or
(c) both (a) and (b).
We may accept security other than a charge or mortgage,
provided we consider the security provided is adequate having
regard to our lending policies.
We have the discretion to restrict or preclude lending against
certain types of security where we are of the view the nature of
the security will make it difficult to sell or where the value of the
security is considered highly variable due to the specialised nature
of the security.
We may also require that borrowers provide additional collateral
security in the form of personal guarantees or other security.
Valuations Where the security is a charge over the borrower’s assets, we will
require either:
(a) the borrower to provide audited financial statements not
more than three months old which will enable us to
confirm the adequacy of the security provided;
(b) a valuation over certain assets covered by the fixed and
floating charge; or
(c) other evidence which demonstrates the adequacy of the
security provided to secure the loan by the Fund. For
example, if the borrower uses loan monies to provide
finance for third parties, we may require an auditor to
assess the adequacy of the borrower’s security over the
loans it provides and the ability for the Fund to exercise
the borrower’s enforcement rights under these loans in
the event of default by the borrower under the terms of
its loan from the Fund.
Where the securities are registered mortgages over Land, we will
require current fair market valuations, prepared for mortgage
security purposes and provided by a panel of experienced,
qualified, registered, independent valuers who have professional
indemnity insurance cover.
The valuations must be on the following terms:
(a) assume a willing but not anxious buyer and seller, and
excluding any premium that might be paid by someone
with a special interest in the property;
(b) assume reasonable exposure to the market and a
reasonable level of resources are applied to the sale
process;
(c) assume a reasonable selling period having regard to the
nature of the property and the market for similar
properties; and
(d) if the loan relates to development or construction, the
value of the property on an ‘as is’ basis and ‘as if
complete’ basis.
We will only instruct valuers who are appropriately registered,
with adequate experience and who are independent. The
valuation must include a statement as to whether the valuation
complies with all relevant industry standards.
We will rotate the valuer selected from our panel so that no
28242375v2 27
valuer values a security property more than two consecutive
times.
Valuations must not be more than three months old at the time
the initial advance is made. If we consider necessary, the
valuation must be updated prior to an extension of the term of
the loan, an increase to the facility limit or where we have reason
to believe that the value of the security property has materially
changed.
For construction and development loans, we also instruct suitably
qualified and registered independent quantity surveyors, or
professional equivalent, to verify the cost to complete the
construction and building works.
Loan term Loans will generally be of a term of 12 months to three years.
Loans may be extended for a further period subject to satisfactory
loan history and credit reviews.
Loan approvals All loans require the approval of the Board.
Loan serviceability We must take into account a borrower’s ability to service the loan
having regard to their forecast and historical cash flow
statements, access to liquid assets and, where applicable, liquidity
of the borrower’s guarantors.
Default The mandatory default management procedures are as follows:
management (a) in the event a default occurs, for example the borrower
fails to make an interest payment on time, we will
immediately contact the borrower to ascertain the reason
for the default and determine whether the borrower can
rectify the default in a reasonable time;
(b) if the default remains outstanding for 10 days, the default
is escalated to the Board;
(c) if the default is not rectified in 28 days, the Board will
consider instructing lawyers to commence legal
proceedings to recover the loan;
(d) a decision by the Board on whether to instruct lawyers
will be based on what the Board believes is in the best
interest of the investors; and
(e) the Board will immediately advise the Compliance
Committee and, if required by the Corporations Act,
investors of the result of its deliberation.
28242375v2 28
6 Management
6.1 Investors Exchange Limited
Investors Exchange Limited, an unlisted public company incorporated in Queensland, holds AFS
Licence 299024.
Our AFS Licence authorises us to operate the Fund as a registered management investment
scheme. As responsible entity, we are responsible for the day to day operation of the Fund in
accordance with our AFS Licence, the Constitution, Compliance Plan and Corporations Act.
The Manager is reliant on the continued financial support of Mr Glenn Griffin for its ongoing
operation.
6.2 Directors and management
Glenn Griffin – Chief Executive Officer/Director
Glenn has performed several major and varied roles in his professional career that spans more
than 40 years, with experience in management, business development, training and marketing.
The first 23 years were spent as an Air Traffic Controller culminating in supervisory and
management roles.
Glenn then entered the development and training field where he consulted to national and
international organisations such as Bridgestone, South East Water and the Australian Army. His
most recent senior management experience was with Cold Rock Ice Creamery where he spent
4¼ years undertaking the Business Development role, being responsible for group expansion,
and taking the number of stores from 51 to 91.
He has a proven track record and his strength lies in formulating and controlling the process to
orchestrate a satisfactory outcome for all.
Rodney Holt – Director
Rodney played baseball while completing his Marketing Degree in college in America. Following
the completion of his degree, he established a career as a professional baseball player, prior to
settling in Australia. In Australia, Rodney completed a Bachelor of Science in Equine Science and
in 2003 founded At the Wire Thoroughbreds Pty Ltd, a specialist thoroughbred management and
consultancy firm.
Rodney has spent the last 10 years developing the business and At the Wire Thoroughbreds Pty
Ltd is currently focused on being involved in bloodstock sales in two ways - by obtaining
commissions from industry trainers to source up-and-coming yearlings, as well as acting as an
agent for the outright purchase and sale of bloodstock horses.
Tony Dunn – Responsible Manager/Director
Tony has over 20 years experience in the financial planning industry and is currently a director of
Financial Force Pty Ltd, a licensed dealer in securities. Tony is a specialist in superannuation and
wealth creation advice. Tony has vast experience advising on the needs of high net worth
individuals and superannuation funds, including mortgage and property trusts as well as self
managed super funds.
28242375v2 29
Tony is a Certified Financial Planner and holds a current certificate of practice from the Financial
Planning Association of Australia. Tony also holds a Bachelor of Arts in Accounting from the
University of Canberra.
6.3 Compliance Committee
We have appointed an independent Compliance Committee for the Fund to assist us in meeting
our compliance responsibilities. In particular, the Compliance Committee’s role is to monitor our
compliance with the Compliance Plan and Constitution in operating the Fund. The Compliance
Committee reports directly to the Board and, in certain circumstances, to ASIC.
The Compliance Committee is required to have a minimum of three members, the majority of
whom must be external to the Manager.
28242375v2 30
7 Investment considerations and risks
Before deciding whether to invest in the Fund, it is important that you understand the risks that
can affect your investment. All investments are subject to risk, and investments may not perform
as expected resulting in a loss of capital or income to investors or may not ultimately meet an
investor’s objectives.
You should give consideration to the following risk factors, as well as the other information
contained in this PDS.
7.1 Borrowers unable to pay interest or repay loans
The key risk is that borrowers may not be able to meet interest payments or repay their loans in
accordance with the terms of their loan agreements. Default may be caused by a number of
factors including a change in the borrower’s personal or business circumstances, significant
economic changes, changes to market conditions or other unforeseen events or circumstances.
7.2 Inadequacy of security
If the borrower defaults, the Fund will principally rely upon security held to recover the loan
principal, interest and any other amounts due to the Fund. It is possible that the value of the
security may be inadequate to cover the full amount of money outstanding under the loan.
This may occur due to a variety of reasons, including an error in the valuation of any security
property or the credit assessment of a borrower; a decline in the borrower’s financial position
leading to lower cash flows or a lower value attributable to the security property; a fall in the
market value of the security after the loan is taken out, either due to factors specific to the
security property or a decline in market generally, causing difficulties where the borrower is
dependant upon sale of the security property to repay the loan or where the Fund is enforcing its
securities; and enforcement of the security taking longer than anticipated.
7.3 Loan recovery
If the Fund is required to enforce the terms of the loan to recover the loan principal, interest or
other outstanding monies, this will involve the sale of any assets of the borrower which have
been mortgaged as security as well as enforcing the terms of any guarantee. The sale of assets
and enforcement of guarantees may take time and this delay may temporarily leave the Fund
with insufficient cash to meet distributions to investors or to repay investments in a timely
manner.
7.4 Valuation risk
There is a risk that a valuation or other evidence of value we obtain in connection with assets or
other property provided as security does not accurately reflect the true value of that asset at the
time the valuation is undertaken or value determined. This may result in a shortfall between the
amount recovered upon enforcement of the Fund’s security and the amount owed by the
borrower, in the event the security is enforced.
7.5 Diversification risk
Because you are investing in a particular loan as opposed to a pool of loans, there is a higher risk
that if a borrower defaults on the loan in which you have invested you may suffer a loss.
28242375v2 31
7.6 Construction and development risk
The Fund may lend for property development and construction. There are specific risks
associated with providing finance for construction and development activities, including:
(a) unforseen increases in building or construction costs or other property development

expenses that result in a shortfall between the funds required by the borrower to
complete the works and the amount available under the loan provided by the Fund;
(b) the funds we keep in reserve to complete construction and development being
insufficient to meet the costs of completion; and
(c) marketing conditions may change during the construction process, which adversely
affects the sales rates and prices anticipated by the borrower and consequently, the
value of the Fund’s security and borrower’s ability to repay the loan.
If you invest in a Loan Investment relating to a property development or construction loan, you
will be exposed to the risks associated with property development. When assessing construction
and development loans, we will determine the maximum amount of finance, based on an ‘as if
complete’ valuation of the project, with the valuation assuming the project has been completed.
There is no guarantee the development will be completed, the amount allowed or assessed for
development and construction costs will be sufficient or the completed development will be worth
the value attributed to it under the ‘as if complete’ valuation determined prior to commencement.
This may generally affect the amount the Fund can recover if it is necessary to enforce the
security, and may result in a capital loss to investors in that Loan Investment, no income returns
for investors or both. Further, loans provided for development and construction purposes will
likely capitalise interest, which means interest will not be payable by the borrower throughout the
loan term and only on repayment of the loan, which increases the distribution risk for investors.
7.7 Loan Investment concentration
The Fund has a very wide mandate for its Loan Investments and may make secured loans to a
variety of borrowers, for various purposes and secured by different types of security. However,
there is no guarantee or assurance that the Fund’s Loan Investments will be diversified and there
may be a significant concentration among the borrowers to which secured loans are made and
the security supporting the secured loan to which the Loan Investments relate.
The Fund may invest in multiple Loan Investments relating to the same borrower and, at any
time, all or a large majority of the Fund’s Loan Investments may involve the same borrower. The
Part 2 for each Offer will contain a summary of the Fund’s existing Loan Investments, including
details of the concentration of loans to any borrower.
Whilst a Loan Investment is separate from each other Loan Investment, a concentration of Loan
Investments among a single, or a small number of, borrowers may increase the risk of investing
in the Fund, particularly if you invest in multiple Loan Investments relating to the same borrower.
This is because a default by a borrower in relation to a Loan Investment may result in the
borrower also defaulting on its obligations under the loan agreements corresponding to other
Loan Investments. This may adversely impact the Distributions (if any) paid by the Fund and
result in a capital loss for investors.
28242375v2 32
7.8 Fund structure
Though each Loan Investment is separate from each other Loan Investment, there is a risk that
performance of a Loan Investment may be impacted by other Loan Investments. For example, if
a borrower breaches its obligations under a loan agreement, for example it fails to pay interest, it
may impact Loan Investments in addition to the Loan Investment to which that loan agreement
relates.
This is because the Fund may incur expenses, such as enforcement costs, or there may be
general Fund expenses, such as audit costs, which are intended to be deducted from the
defaulting borrower’s interest or paid by the defaulting borrower. If these expenses are unable
to be recovered from the borrower when payable by the Fund, the Fund may be required to pay
such costs from other revenues, including the interest received in relation to other Loan
Investments.
7.9 Related party loans
The Fund may provide loans to related parties of the Manager and the presence of related parties
and potential conflicts of interest may increase the risk that:
(a) loans to related parties do not satisfy our lending policies;
(b) the borrower is unable to service interest payments or repay the loan principal; or
(c) the security obtained for the loan is inadequate.
7.10 Capitalised interest
The Fund may provide loans where interest payments are funded by increases in a loan amount
(capitalised) and the borrower is under no obligation to make interest payments until the end of
the loan. Capitalised interest loans carry a higher risk than loans where the interest is not
capitalised because they do not provide regular cash flow to us to meet Distributions payments
until the loan is repaid.
In order to avoid a loss occurring, the borrower is obliged to repay the loan in full, including all
capitalised interest, at maturity. Should the borrower default on its repayment obligation, the
value of the security property will need to be sufficient to cover all capital and capitalised
interest. There is the risk that the value of the security property might not be sufficient to cover
all such interest and capital resulting in a loss to investors.
7.11 Liquidity risk
An investment in the Fund should be treated as an illiquid medium- to long-term investment

because there is no secondary market for Units. If you wish to exit your investment prior to the
end of the loan term corresponding to your Loan Investment, you will need to find a buyer for
your Units.
We will maintain a list of proposed buyers and sellers of Units and investors can be added to, or
obtain a copy of, the list by contacting us. If you wish to sell your Units during the term of your
Loan Investment, you will need to contact a potential buyer and agree the terms of any sale,
including price, as we will not list buy or sell prices or facilitate the sale or purchase of Units.
28242375v2 33
7.12 Compliance risk
If we fail to comply with our AFS Licence conditions, the Constitution, Compliance Plan or
Corporations Act it will likely have an adverse impact on you and the value of your investments.
In particular, this may occur if ASIC take action to:
(a) wind up the Fund; or
(b) remove us as the responsible entity.
7.13 Insurance risk
If a borrower fails to properly insure any asset provided as security for a loan by the Fund, there
is a risk you may suffer loss on your investment if the security property or asset is partially or
substantially destroyed and we need to enforce the security to recover the amount owing by the
borrower as a result of its default.
7.14 Investment management risk
This is the risk that changes in our management or the loss of other key personnel may result in
us not adequately monitoring and overseeing the approval, management and enforcement of
loans and increase the risk of policies and procedures not being adhered to.
7.15 Regulatory risk
There is a risk that changes to the regulatory environment for financial services or the finance
industry may, either directly or indirectly, affect the value of the investment in the Fund.
7.16 Taxation risk
Australian tax laws are constantly in a state of flux with the introduction of various taxation
amendments which may affect you.
Tax liability is your responsibility. We are not responsible for the taxation consequences of an
investment in the Fund. You should consult your own taxation adviser to ascertain the tax
implications of your investments. See section 9 of Part 1 for further information.
7.17 Macro economic risk
The general state of the Australian and international economies, as well as changes in taxation,
monetary policies, interest rates and statutory requirements may affect the ability of borrowers to
meet their obligations to pay interest and repay loan principals, and the market value of assets or
real property provided as security for loans, and have a negative impact on the Fund’s
performance on the value of your investment.
28242375v2 34
8 Fees and other costs
8.1 Consumer advisory warning
The Corporations Regulations 2001 requires us to include the following standard consumer
advisory warning. This warning is required to be inserted into all product disclosure statements
and is not specific to this PDS.
DID YOU KNOW?

Small differences in both investment performance and fees and costs can have a substantial
impact on your long term returns.
For example, total annual fees and costs of 2% of your fund balance rather than 1% could
reduce your final return by up to 20% over a 30 year period.
(for example, reduce it from $100,000 to $80,000).
You should consider whether features such as superior investment performance or the
provision of better member services justify higher fees and costs.
You may be able to negotiate to pay lower contribution fees and management costs where
applicable. Ask the fund or your financial adviser.
TO FIND OUT MORE
If you would like to find out more, or see the impact of the fees based on your own circumstances, the
Australian Securities and Investments Commission (ASIC) website (www.moneysmart.gov.au)
has a managed investment fee calculator to help you check out different fee options.
8.2 Fees and other costs
This document shows fees and other costs that you may be charged. These fees and costs may
be deducted from your money, from the returns on your investment or from the Fund assets as a
whole.
Taxes are set out in another part of this document.
You should read all the information about fees and costs because it is important to understand
their impact on your investment.
Type of fee or cost Amount How and when paid

Fees when your money
moves in or out of the Fund
Establishment fee Nil Not applicable
The fee to open your investment
Contribution fee Nil Not applicable
The fee on each amount
contributed to your investment
Withdrawal fee Nil, for withdrawals upon Not applicable
The fee on each amount you take completion, or partial
out of your investment completion, of a Loan
Investment or prior to the
making of a Loan Investment.
For early withdrawals from a Where we exercise our discretion
28242375v2 35
Type of fee or cost Amount How and when paid
Loan Investment, a fee of up to and allow an early withdrawal,
5% of the amount withdrawn the early withdrawal fee will be
may be payable. deducted from the withdrawal
amount payable to the investor
at the time of payment.
Termination fee Nil Not applicable
The fee to close your investment
Management costs
The fees and costs for managing The management fee is Calculated and payable monthly
your investment1. estimated to be between 1% per in arrears and deducted from the
annum and 5% per annum of the Fund. Management fees will be
value of the applicable Loan calculated as interest payments
Investment.2 paid by a borrower less the
Expenses are estimated to be Fund’s expenses and Distribution
1.5% per annum of the Fund’s payments to investors.
gross asset value. Payable when incurred or
reimbursed to the Manager.
Management fees and Fund
expenses will typically be paid
from the interest paid by the
borrower or otherwise by the
borrower and are not deducted
from the amount you invest.
Please refer to ‘Management
fees’ and ‘Management
expenses’ in the ‘Additional
explanation fees and costs’
section below for further details.
Service fees
Investment switching fee Nil Not applicable
The fee for changing investment
options
1
The amount shown are necessarily estimates only of management costs. Actual amounts will differ from this estimate.
2
Actual management fees for each Loan Investment will be disclosed in the Part 2 for that Loan Investment.
8.3 Additional explanation of fees and costs
Management fee
This is the fee payable to us for managing the Fund’s loans and operating the Fund. The actual
management fee for each Loan Investment will be disclosed in the corresponding Part 2.
Typically these fees are paid from the interest paid by the borrower or otherwise by the borrower
and are not deducted from the amount you invest.
Management fees will be calculated as interest payments paid by a borrower less the Fund’s
expenses and Distribution payments to investors. For example, if a loan has an interest rate of
12.5% per annum and the Fund’s expenses are 1.5% per annum and the indicative Distribution
28242375v2 36
rate is 8% per annum, then the management fee payable to us will be 3% per annum. However,
we are entitled to be paid our management fee prior to the payment of Distributions to investors.
Under the Constitution, we are entitled to a maximum management fee for managing the Fund of
up to 5% per annum of the value of each Loan Investment.
Management expenses
We are entitled to be reimbursed for expenses and costs incurred in the proper management of
the Fund. These expenses include:
(a) fees and costs of the audit of the Fund and the Compliance Plan;
(b) costs and expenses incurred in connection with borrowing on behalf of the Fund;
(c) statutory charges including taxes, government fees and levies;
(d) valuation or other experts’ fees and costs incurred in relation to activities in the Fund
including costs incurred in preparing any legal documents;
(e) registry charges, accounting fees, legal fees, printing of annual reports, postage and
handling, Compliance Committee costs, expert and consultant fees and the holding of
investor meetings;
(f) any costs we incur in enforcing a loan including debt collection fees, legal costs, court
proceedings, receiver’s and/or manager’s fees and expenses, process servers, arbitration,
mediation, settlements and security services;
(g) all other costs, disbursements and outgoings incurred in connection with the
management and administration of the assets and performance of the duties and
functions of the responsible entity under the Constitution; and
(h) all costs and expenses we incur in relation to the establishment of the Fund, the
preparation and registration of the Constitution and Compliance Plan, the preparation,
due diligence, printing, promotion and distribution of this PDS and any costs incurred in
amending or replacing any of the above documents or any other aspect of the Fund.
It is estimated the annual cost to the Fund for administration services will be approximately 1.5%
per annum of the gross value of the Fund’s assets. Typically, these expenses are paid from the
interest received from the borrower or are otherwise reimbursed by the borrower.
We reserve the right to delay or waive payment of the above fees at our discretion.
Interest rates
Where a borrower complies with its obligations under the loan agreement and security
documents, the borrower receives a discounted interest rate of up to 5% per annum on its loan.
If the borrower breaches the loan terms, then the borrower may be charged the non-discounted
interest rate. We are entitled to receive from the Fund up to 50% of this additional interest
amount when paid.
The percentage of any additional interest amounts we are entitled to charge, up to a maximum
of 50%, will be disclosed in the Part 2 for each Loan Investment. The management fee estimate
in the table in section 7.2 does not include any fee we would receive as a result of the borrower
being charged a non-discounted interest rate.
28242375v2 37
For example, if the non-discounted interest rate is 16% per annum, the discounted interest is
11% per annum, the loan amount is $500,000 and the borrower was charged the non-discounted
interest rate then we would be entitled to receive up to $12,500 per annum being 50% of the
additional interest amount.
Removal fees
Under the Constitution, we are entitled to a fee of up to 5% of the value of the Fund’s assets if
we are removed as the responsible entity of the Fund (other than for gross negligence in the
management of the Fund or a material fiduciary breach). For example, if the Fund’s gross asset
value was $5 million, we would be entitled to receive a removal fee of up to $250,000 if removed
as responsible entity. The management fee estimate in the table in section 7.2 above does not
include any removal fee.
Loan fees
Loan establishment fees and early repayment fees (if any) are different for each loan.
The loan establishment fee is a maximum of up to 3% of the value of the loan and is payable
upon approval of the loan acceptance by the borrower. For example, if the loan amount is
$500,000 then a loan establishment fee of up to $15,000 may be payable to us by the borrower.
An early repayment fee, equal to up to three months interest may be payable by the borrower if
they repay a loan in full prior to its maturity. For example, if the interest rate payable by the
borrower is 12% per annum, the loan amount is $500,000 and the borrower repays the loan prior
to its maturity, we may receive an early repayment fee of up to $15,000.
The actual loan establishment fee and early repayment fee (if any) for a loan will be disclosed in
the Part 2 relating to that Loan Investment.
We may, at our discretion, decide to have these fees paid directly to the Fund in order to assist in
meeting the Fund’s cash flow requirements.
Differential fee arrangements
We may negotiate different fee arrangements, such as fee rebates, waivers or reductions, for
wholesale clients. Such differential fee arrangements will be by individual negotiation with us.
Fee entitlement
Notwithstanding anything else contained in this PDS, our entitlement to fees and expenses under
the Constitution will be deducted from the assets of the Fund, prior to Distribution payments
being made to investors in a Loan Investment.
GST and stamp duty
All fees stated in this PDS include (if applicable):

(a) GST less any reduced import tax credits; and
(b) stamp duty.
Incidental fees
We may charge fees where provided for under the Corporations Act. For example, a $10 fee to
provide a copy of the Constitution.
28242375v2 38
Transaction costs
Transaction costs, such as government taxes, duties, levies, bank charges and account
transaction charges, associated with the acquisition of assets from funds subscribed by investors
are paid from the Fund.
Fees for Indirect Investors
Indirect Investors must also refer to the fees and costs payable for the Portfolio Service they are
investing through. The Portfolio Service Operator will be the registered holder of Units and may
charge you fees that are different or in addition to the Fund’s fees detailed in this section. You
should refer to the offer document for the relevant Portfolio Service for more information.
Taxes
For taxation information relating to the Fund, see section 9 of Part 1.
8.4 Example of annual fees and costs
This table gives an example of how the fees and costs of the Fund can affect your investment
over a one year period. You should use this table to compare this product with other managed
investment products.
Example Balance of $50,000 with total contributions of

$5,000 during year
Contribution Fees Nil For every additional $5,000 you put in you will be
charged $0.1
PLUS Management costs 2.5% per And, for every $50,000 you have in the Fund, you
annum to will be charged from $1,250 to $3,250 each year.2
6.5% per
annum
EQUALS Cost of fund If you had an investment of $50,000 at the
beginning of the year and you put in an additional
$5,000 during that year, you would be charged fees
of between $1,250 to $3,250.
What it costs you will depend on the fees you
negotiate with the fund or financial adviser.3
* Additional fees may apply. If, with our approval, you leave the Fund early prior to completion of the Loan
Investment in which you are invested, you may also be charged an early withdrawal fee of up to 5% of the
amount withdrawn ($2,500 for every $50,000 you withdraw).
1
It is a requirement of the Corporations Regulations that the above example assumes a balance of $50,000 and an
additional contribution of $5,000. In practice, it will not be possible to contribute further funds to a Loan Investment
once that Loan Investment has been made.
2
Management fees from $500 to $2,500, depending on the fees of the particular Loan Investment, and operating
expenses of $750. The fees and expenses are typically deducted from the interest paid by the borrower or otherwise
reimbursed by the borrower and not deducted from the amount you invest. The actual management fee associated with
a particular Loan Investment, up to 5% of the value of the Loan Investment, will be disclosed in the applicable Part 2.
3 The management costs for the Fund are not negotiable.
28242375v2 39
9 Taxation
9.1 General information only
Australian tax laws are complex and are subject to constant change. The views in this PDS are
based on law and announcements current in Australia as at the date of this PDS. It does not
take into account or anticipate any changes in the tax law or future judicial interpretations of the
law after this time, nor does it take into account the tax law of countries other than Australia.
The taxation comments in this section are general in nature by necessity and the taxation
implications may vary for each investor depending on their particular circumstances. Accordingly,
we recommend you seek your own professional advice regarding the taxation implications
associated with an investment in the Fund.
In this respect, the taxation comments below are only relevant for Australian resident investors.
They are not relevant for investors who may be subject to special tax rules such as banks,
insurance companies, managed investment trusts, tax exempt organisations and dealers in
securities.
You may be required to pay tax in relation to your investment in the Fund (generally income tax).
However, you may be able to claim some tax offsets or have the benefits of some tax
concessions.
Some tax information has been provided for you below. However, although every care is taken,
it is never possible to rule out the risk that on a subsequent review, taxation liabilities for the
Fund could be increased or the benefit of concessions reduced.
9.2 Distributions
Under current legislation the Fund will not be subject to taxation provided its taxable income
(including assessable realised capital gains) is distributed in full to investors.
The Fund will fully distribute its distributable income, calculated in accordance with the
Constitution and applicable taxation legislation, to investors who are entitled to the income under
the Constitution. Should realised capital losses arise, they are not distributed to investors but are
retained in the Fund to be offset against any future realised capital gains.
9.3 Income tax
You may be liable to pay income tax on Distributions received from the Fund depending on your
total level taxable income and your income tax rate.
The tax impact for you in relation to Distributions from the Fund will depend on:
(a) your personal tax position;
(b) your marginal tax rate; and
(c) the composition of the Distribution, i.e. the proportion of income or tax offsets making up
the Distribution.
We will send you an annual statement indicating the taxable and non-taxable component of
Distributions (including any tax offsets) for the financial year, to assist in the preparation of your
income tax return.
28242375v2 40
9.4 Capital gains tax
There should be no capital gains tax liabilities for investors as the capital amount returned to
investors will generally equal the amount initially invested, except if the Fund suffers a loss.
9.5 Transfer duty
Depending on the application of relevant State and Territory laws, transfer duty may be payable
upon the transfer of Units. Investors should seek professional advice in relation to the
application of transfer duty prior to transferring Units.
9.6 Tax file numbers – Australian residents
You can choose whether to provide your Tax File Number (TFN) on your Application Form. If
you do not provide your TFN or claim an exemption, we are required to deduct tax at the highest
marginal rate, plus the Medicare Levy (currently 46.5%), from your Distributions. We are
authorised to collect TFNs under Australian tax law.
If you are a business taxpayer you may provide us with an ABN instead of a TFN.
9.7 Goods and services tax (GST)
The issuing and redemption of Units will not be subject to GST.
GST is not payable on a transfer of Units. However, GST may be incurred on services that you
acquire in relation to the acquisition, disposal or redemption of Units (such as legal or accounting
advice). You should seek advice about whether you are entitled to claim input tax credits in
respect of GST on those costs.
GST is not payable on Distributions made to you.
9.8 Withholding tax (overseas investors)
We may be required to withhold amounts from Distributions paid to overseas investors.

Overseas investors should seek independent advice as to the application of withholding tax to
their particular circumstances.
28242375v2 41
10 Material documents
10.1 Background
We consider that certain documents are material to the operations of the Fund and may be
relevant to you. A description of material documents, together with a summary of the more
important details of each of these documents, is set out below.
10.2 Constitution
The Constitution establishes the Fund and governs your rights and obligations as an investor in
the Fund. Investors are bound by the provisions of the Constitution. The Constitution and the
Corporations Act regulate the operation of the Fund and set out the rights and liabilities of
investors and of our responsibilities and duties as the responsible entity.
The Constitution includes provisions which relate to:
(a) the responsible entity’s powers, duties and obligations;
(b) the rights and obligations of investors;
(c) the ability of investors to remove the responsible entity;
(d) the issue of Units and the procedure for the redemption of Units;
(e) the transfer and transmission of Units;
(f) the valuation of the Fund;
(g) fees payable to the responsible entity;
(h) the responsible entity’s right to be indemnified by the Fund for expenses, losses and
liabilities arising in its capacity as responsible entity providing it has properly performed
its duties;
(i) the winding up of the Fund;
(j) meetings of investors;
(k) complaints and procedures in relation to the Fund; and
(l) the responsible entity’s limitation of liability (subject to the Corporations Act).
We may amend the Constitution without investor consent where we reasonably believe the
amendment will not adversely affect investors’ rights. Otherwise, the Constitution can only be
amended where at least 75% of votes cast by investors (at a meeting convened in accordance
with the Constitution and the Corporations Act) vote in favour of the amendment.
We may retire or be removed as responsible entity by investors in accordance with the

Corporations Act.
Investors may view a copy of the Constitution at our registered office during business hours. A
copy of the Constitution may be obtained by searching ASIC records or by written request to us
and a payment of a fee (currently $10).
28242375v2 42
10.3 Compliance Plan
We have prepared a Compliance Plan which has been lodged with ASIC. The Compliance Plan is
a document that outlines the principles and procedures in relation to the conduct of the Fund
that we follow to ensure we comply with the provisions of the Corporations Act, ASIC policies and
the Constitution.
The Compliance Plan deals with a wide range of issues including:
(a) that the assets of the Fund are identified as assets of the Fund;
(b) the assets of the Fund are valued at appropriate regular intervals; and
(c) accurate records of the Fund’s operations are kept.
Each year, adherence to the Compliance Plan is audited by an external Compliance Plan auditor
and the audit report is lodged with ASIC.
The Compliance Plan may be viewed at our offices during normal business hours.
10.4 Loan agreements and security documents
The terms of the loan agreement and security documents for each Loan Investment will be
summarised in the applicable Part 2.
28242375v2 43
11 Additional information
11.1 Nature of investment
The Fund is a unit trust established by the Constitution. When you invest in the Fund you
acquire Units that, at the time of acquisition under this PDS, are priced at $1 each. Your
investment in the Fund entitles you to share in the income generated by your particular loan
(Loan Investment). When you redeem your investment the Units you hold in the Fund are
redeemed by the Manager.
11.2 Investors’ liability
The Constitution seeks to limit the liability of investors to the amount of their investment plus
other moneys payable to us or the Fund pursuant to the Constitution (if any). However, because
this is a matter which can only ultimately be determined by the courts, no assurance or
guarantee is given that investors’ liability will be limited in a manner discussed above.
11.3 Indemnity for IEL
To the extent permitted by the Corporations Act and the law, we, as responsible entity, are
indemnified out of the Fund against any claim, action, damage, loss, liability, cost, expense or
payment which we incur or are liable for, provided that it does not arise from our employees or
fraud, negligence or wilful default.
11.4 Complaints
If you have a complaint about any aspect of your investment in the Fund, please write to us at:
The Complaints Officer

PO Box 459
OXENFORD QLD 4210
Alternatively, you can phone us on (07) 5532 1054.
We are a member of, and participate in, the Financial Ombudsman Service Limited (FOS), an
independent complaints resolution organisation. If you feel your complaint has not been
satisfactorily resolved you are entitled to make a written complaint to FOS at:
Financial Ombudsman Service Limited

GPO Box 3
MELBOURNE VIC 3001
Telephone: 1300 780 808

Facsimile: (03) 9613 6399
11.5 Labour standards and social, ethical and environmental considerations
We do not take into account labour standards or environmental, social or ethical considerations in
the selection, retention or realisation of the investments of the Fund.
28242375v2 44
11.6 Indirect investors
You may invest directly in the Fund through an investor directed portfolio service, master fund or
portfolio administration service (Portfolio Service) (Indirect Investor). As an Indirect
Investor, you may rely on and are authorised to use the information in the PDS to direct the
operator of the Portfolio Service (Portfolio Service Operator) to invest in the Fund on your
behalf. An Indirect Investor does not become an investor in the Fund.
Accordingly, an Indirect Investor does not acquire the rights of an investor or acquire any direct
interest in the Fund. The Portfolio Service Operator acquires these rights and can exercise, or
decline to exercise them on behalf of the person according to the arrangements governing the
Portfolio Service. A person who invests in the Fund through a Portfolio Service should ignore the
information in the PDS that is relevant only for direct investors.
This includes information relating to:
Application Form
A person investing in the Fund through a Portfolio Service should not complete the Application
Form attached to Part 2 of this PDS. An Indirect Investor should complete the application form
supplied by the Portfolio Service Operator.
Information
An Indirect Investor will receive no statements, tax information or other information directly from
us. An Indirect Investor should receive equivalent information from the Portfolio Service
Operator.
Withdrawal/redemption
The provisions of the Constitution which relate to the redemption or withdrawal of the Units will
affect the Portfolio Service Operator and not the Indirect Investor.
11.7 Updated information
Where there is a change to information which is not material to investors this updated
information will be made available on our website at
www.InvestorsExchange.com.au/updatedinfo.htm (Updated Information). If you require a
paper copy of any Updated Information please contact us on (07) 5532 1054 and it will be
provided without charge on request.
While this PDS and any Updated Information are up to date at the time of preparation, changes
may be made to the Fund from time to time. Investors should ensure that they keep up to date
with the latest information on the Fund.
To obtain this information either:
(a) visit our website at www.InvestorsExchange.com.au; or
(b) phone us on (07) 5532 1054.
A paper copy of the most recent information will be sent to you free of charge on request.
11.8 Disclosing entity
The Fund may become a disclosing entity in which case the following arrangements will apply.
28242375v2 45
As a disclosing entity, the Fund will be subject to regular reporting and disclosure obligations.
Copies of documents lodged with ASIC may be obtained from, or inspected at, an ASIC office.
You will have the right to obtain various financial reports lodged with ASIC for the Fund.
We will satisfy our continuous disclosure obligations for the Fund by publishing material
information on our website at www.InvestorsExchange.com.au/materialinfo.htm.
Any material information affecting the Fund will be placed on our website.
Accordingly, given the disclosure of material information will be made on our website, we will not
be required to lodge continuous disclosure notices for the Fund with ASIC.
11.9 Cooling-off period
A 14 day cooling-off period applies during which you may change your mind about your
subscription for Units and request the return of your money in writing. Generally, the cooling-off
period runs for 14 days from the earlier of the time your subscription is confirmed or the end of
the fifth business day after your Units are issued.
A cooling-off period is not applicable if the Fund ceases to be a liquid managed investment
scheme or where rights are exercised in relation to Units during the cooling-off period.
Investors investing through a Portfolio Service should refer to the agreement with their Portfolio
Service Operator for their policy on cooling-off, as the cooling-off rights set out above may not be
applicable to Indirect Investors.
11.10 Privacy
The privacy of your personal information is important to us. We collect personal information
directly from you through the Application Form and from third parties who assist us with our
business. The purpose of collecting your information on the Application Form is to process your
application and manage your investment in the Fund. If the personal information you provide to
us is incomplete or inaccurate, we may not be able to work with you effectively, or at all, and
may be delayed in performing our business functions.
If you use the financial adviser who recommended you invest in the Fund, details of your
investment and information about you will be provided to your financial adviser.
From time to time, we may wish to advise you about other services and products which could suit
your needs. By making an application, you agree that we may disclose your personal information
to other corporations specifically, but not solely, for marketing purposes. We are not likely to
disclose your personal information overseas.
All personal information collected will be collected, used and stored by us in accordance with our
privacy policy, a copy of which is available on request or at our website listed below.
However, if you do not want this information to be used for this purpose, you must exercise your
right to instruct us not to disclose any information concerning your personal information. You
may do this by ticking the ‘non-disclosure’ box on the Application Form.
If you tick the ‘non-disclosure’ box we may still be required to disclose personal information
where required by law.
You are entitled to request reasonable access to and correction of your personal information. We
reserve the right to charge an administration fee for collating the information requested.
28242375v2 46
For a copy of our privacy policy and for information about how we deal with personal
information, including how you can complain about privacy-related matters and how we respond
to complaints, please visit our website at www.InvestorsExchange.com.au.
11.11 Warning statement – issues to New Zealand investors
This offer to New Zealand Investors is a regulated offer made under Australian and New Zealand
laws. In Australia, this is Chapter 8 of the Corporations Act and Regulations. In New Zealand,
this is Part 5 of the Securities Act 1978 and the Securities (Mutual Recognition of Securities
Offerings – Australia) Regulations 2008.
This Offer and the contents of the offer document are principally governed by Australian rather
than New Zealand law. In the main, the Corporations Act and Regulations (Australia) set out
how the offer must be made.
There are differences in how securities are regulated under Australian law. For example, the
disclosure of fees for collective investment schemes is different under the Australian regime.
The rights, remedies and compensation arrangements available to New Zealand investors in
Australian securities may differ from the rights, remedies and compensation arrangements for
New Zealand securities.
Both the Australian and New Zealand securities regulators have enforcement responsibilities in
relation to this Offer. If you need to make a complaint about this Offer, please contact the
Financial Markets Authority, Wellington, New Zealand. The Australian and New Zealand
regulators will work together to settle your complaint.
The taxation treatment of Australian securities is not the same as for New Zealand securities.
If you are uncertain about whether this investment is appropriate for you, you should seek the
advice of an appropriately qualified financial adviser.
The Offer may involve a currency exchange. The currency for the securities is not New Zealand
dollars. The value of the securities will go up or down according to changes in the exchange rate
between the currency and New Zealand dollars. These changes may be significant.
If you expect the securities to pay any amount in a currency that is not New Zealand dollars, you
may incur significant fees in having the funds credited to a bank account in New Zealand in New
Zealand dollars.
The dispute resolution process described in this offer document is available only in Australia and
is not available in New Zealand.
11.12 Electronic PDS
This PDS, comprising Parts 1 and 2, is available in electronic form at

www.InvestorsExchange.com.au. We will send, on request, any person receiving this PDS
electronically, a paper copy of the PDS (and attached Application Form) free of charge during the
period of the Offer. Applications must be made by completing a paper copy of the Application
Form which forms part of Part 2.
We will not accept a completed Application Form if we have reason to believe that the applicant
has not received a complete paper copy or electronic copy of the PDS, comprising Parts 1 and 2,
or if we have reason to believe that the Application Form or electronic copy of the PDS has been
altered or tampered with in any way.
28242375v2 47
While we believe that it is extremely unlikely that during the period of the Offer the electronic
version of this PDS will be tampered with or altered in any way, we cannot give any absolute
assurance that this will not occur. If you are in doubt about the validity or integrity of an
electronic copy of the PDS you should immediately request a copy of the PDS directly from us or
your adviser.
11.13 Manager’s disclosures and disclaimer
Pursuant to the Constitution, our employees and officers are entitled to apply for Units. It is our
policy to review any such application, which must be on the same basis as that of other
applicants.
Mr Glenn Griffin is the owner of all shares in the Manager.
11.14 Consents
McCullough Robertson has given, and has not withdrawn, its consent to be named in the PDS as
lawyers for the Manager in the form and context in which it is named.
McCullough Robertson does not make any statement, actual or implied, in this PDS, nor is a
statement in this PDS based on a statement made by McCullough Robertson. McCullough
Robertson has not authorised or caused the issue of any part of this PDS and takes no
responsibility for any part of this PDS. Further, McCullough Robertson has not undertaken any
due diligence on the Manager, the Fund or the Offer and has not verified the PDS.
HS Partners have given their written consent to being named in the PDS as auditor for the Fund
and have not withdrawn their consent prior to the issue of this PDS.
HS Partners do not make any statement, actual or implied, in this PDS, nor is a statement in this
PDS based on a statement made by HS Partners. HS Partners have not authorised or caused the
issue of any part of this PDS and take no responsibility for any part of this PDS.
11.15 Directors’ authorisation
Each of the Directors has consented to, and authorised, the issue of this PDS, consisting of Part 1
and Part 2.
28242375v2 48
Glossary
AFS Licence an Australian financial services licence issued by ASIC.

Application Form the application form attached to Part 2.
ASIC Australian Securities and Investments Commission.
Board the Manager’s board of directors.
Business Day a day other than a Saturday, Sunday or public holiday in Gold Coast
City, Queensland.
Compliance Committee the committee established by the Manager in accordance with the
Corporations Act, as described in section 6.3 of Part 1.
Compliance Plan the compliance plan for the Fund.
Constitution the constitution for the Fund.
Corporations Act the Corporations Act 2001 (Cth).
Directors the directors of the Manager, from time to time.
Distribution the distributable amount that is distributed to investors holding
Units during a Distribution Period.
Distribution Period a calendar month, a calendar quarter or such other period as
disclosed in the Part 2 corresponding to the Loan Investment.
Fund Investors Exchange Investment Fund ARSN 120 933 093.
General Units Units issued where investors’ funds remain in the Fund’s bank
account pending investment in a Loan Investment.
Indirect Investor means an investor that invests in the Fund through a Portfolio
Service.
Land means:
(a) a freehold estate or Crown leasehold, or interest in real
property, or inundated leasehold land, or inundated freehold
land in any part of the Commonwealth of Australia or any
State or Territory; and
(b) includes without limitation buildings, fixtures and fittings
(including furnishings) and other erected or installed
improvements.
Lending Policies Manual the manual documenting our policies and procedures for the
making, monitoring, administration, discharge and enforcement of
loans.
Loan Investment means a loan secured by any or all of:
(a) a registered fixed and floating charge over the borrower’s
assets;
(b) a registered mortgage over Land; or
(c) other security approved by the Manager having regard to its
lending policies.
Loan Investment Units Units issued which have a proportionate interest in a particular Loan
Investment.
28242375v2 49
Manager, IEL, us, our and we Investors Exchange Limited ACN 116 489 420.
Offer the offer of Units made in this PDS, specific details of which are
contained in Part 2.
Part 1 Part 1 of this PDS, containing general information about the Fund
and the Manager.
Part 2 Part 2 of this PDS, containing specific details of the Offer and the
Loan Investment.
PDS this product disclosure statement, comprising Part 1 and Part 2.
Portfolio Service an investor-directed portfolio service, wrap account or master trust.
Portfolio Service Operator means the manager of a Portfolio Service.
Unit a unit in the Fund.
Updated Information is explained in section 11.7 of Part 1.
Valuation a valuation of a security property as determined by an approved,
suitably qualified and independent registered valuer based upon the
unencumbered value of the Land.
you and your a person who subscribes for and is issued a Unit.
28242375v2 50
Corporate Directory
Manager and responsible entity Fund auditor

Investors Exchange Limited HS Partners
ACN 116 489 420 Level 1, 199 George Street
AFS Licence 299204 BRISBANE QLD 4000
Registered office Manager’s solicitor
112 Siganto Drive McCullough Robertson Lawyers
Helensvale Level 11, Central Plaza Two
QLD 4212 66 Eagle Street
BRISBANE QLD 4000
Postal address
PO Box 459
OXENFORD QLD 4210
Contact details
Phone: 1300 737 903 or (07) 5532 1054
Email: info@InvestorsExchange.com.au
Website: www.InvestorsExchange.com.au
28242375v2 51

Investors Exchange Investment Fund

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Investors Exchange Investment Fund

Uploaded by

Copyright:

Available Formats

Investors Exchange Investment Fund ARSN 120 933 093

Product Disclosure Statement – Part 1

Responsible entity: Investors Exchange Limited ACN 116 489 420

1 Key investment features ------------------------------------------------------------------------ 4

2 Investment objectives and benefits of investing ---------------------------------------------- 9

3 ASIC benchmarks and disclosure principles -------------------------------------------------- 13

4 Investment details ------------------------------------------------------------------------------ 21

5 Lending policies --------------------------------------------------------------------------------- 26

7 Investment considerations and risks ---------------------------------------------------------- 31

8 Fees and other costs ---------------------------------------------------------------------------- 35

10 Material documents ----------------------------------------------------------------------------- 42

11 Additional information -------------------------------------------------------------------------- 44

Corporate Directory ------------------------------------------------------------------------------------- 51

Responsible entity and issuer

The name and contact details of the responsible entity are:

Investors Exchange Limited

Ph: 1300 737 903

Capital and investment risk

An investment in the Fund is an investment in a registered managed investment scheme. An investment

Reliance on PDS only

PDS available electronically

No financial product advice

Anti-money laundering legislation

Glossary, illustrations and currency

Description Summary Refer Part 1,

2.1 Investment objective

2.2 Benefits of investing in the Fund

Investment choice and flexibility

(a) details of the borrower;

(b) the amount of the loan to be advanced to the borrower;

(c) the commencement date of the Loan Investment;

(d) the loan expiry date of the Loan Investment;

(g) details of the security provided for the loan;

(i) the loan-to-valuation ratio (if applicable);

(m) insurance particulars for the security (if applicable).

Direct deposit of Distributions

Distributions are automatically deposited to your nominated Australian financial institution

2.3 How do I invest in the Fund?

Completed Application Forms should be returned to:

By mail: The Investment Manager

2.4 Transfer of Units

You should consider your investment as illiquid.

(b) an annual taxation statement; and

(c) an annual periodic statement.

3.1 Legislative background

3.2 Benchmark disclosure

3.3 Disclosure principle 1 – Liquidity

3.4 Disclosure principle 2 – Scheme borrowing

3.5 Disclosure principle 3 – Loan portfolio and diversification

3.6 Disclosure principle 4 – Related party transactions

3.8 Disclosure principle 6 – Lending principles – loan-to-valuation ratios

3.9 Disclosure principle 7 – Distribution practices

3.10 Disclosure principle 8 – Withdrawal arrangements

4.1 What is the role of the Manager?

We are licensed by ASIC to act as responsible entity of the Fund.

4.2 Fund investments

4.3 Loan Investment security

Each Loan Investment will generally be secured by:

(b) a registered mortgage over Land provided by the borrower.

4.4 Loan Investment information

(a) details of the borrower;

(b) the amount of the loan to be advanced to the borrower;

(c) the commencement date of the Loan Investment;

(d) the expiry date of the Loan Investment;