Risk comes before return.
N1's lending philosophy places credit quality, security and repayment strategy at the centre of each lending decision.
Six pillars of the capital preservation approach
Mortgage security
Loans are supported by mortgage security over Australian property, subject to each transaction.
Independent valuation
Valuations are obtained from independent valuers as part of the credit assessment.
Borrower equity
Borrower equity may provide a buffer between the loan exposure and the assessed property value.
Exit strategy
The proposed repayment strategy is assessed as part of the credit decision.
Portfolio diversification
The Fund's approach to diversification is set out in the current Information Memorandum.
Ongoing monitoring
Loans and security are monitored through the life of the transaction.
Mortgage security may assist recovery following a default, but it does not guarantee repayment or prevent a loss of capital.
Investment involves risk.
Property and mortgage security do not remove investment risk. Investors may lose some or all of their invested capital.
Past performance is not a reliable indicator of future performance.
Loss of capital
Investors may lose some or all of their invested capital.
Borrower default
A borrower may fail to meet their obligations under a loan.
Property value decline
Property values may fall after a loan is settled.
Valuation risk
A valuation is an opinion at a particular date and may not reflect the realised sale price.
Liquidity and withdrawal risk
Withdrawals from the Fund may be subject to timing, notice periods or other restrictions set out in the Information Memorandum.
Concentration risk
The Fund may have exposure concentrated by borrower, geography, sector or security type.
Second mortgage risk
Where permitted, second mortgages rank behind first mortgages in enforcement.
Interest rate risk
Interest rate movements may affect borrower performance and Fund income.
Manager risk
The performance of the Fund depends on the manager's ability to source, assess and manage loans.
Operational risk
Operational failures may affect the Fund.
Regulatory risk
Regulatory or legal changes may affect the Fund.
Taxation risk
Tax laws and their interpretation may change.
Delayed distributions
Distributions may be delayed or reduced in certain circumstances.
The full risk section of the current Information Memorandum should be reviewed before making any investment decision.