LM - The global pathway toAustralian investment solutions
Things you may not know about LM> Founded in 1998> LM is an Australian Fund Manager> Registered with the Australian Securities & Investment Commission (ASIC) as a Responsible Entity & Australian Financial Services Licensee> LM manages Australian assets with a gross realisation value in excess of AUD 3 billion> LM is privately owned and first registered as a Responsible Entity in 1998> All funds offered and managed by LM carry Australian assets only> LM is an Australian fund specialist
Things you may not know about LM> 130 people> 8 offices> Operates worldwide in more than 70 countries> Invested in excess of AUD 3 billion into the Australian property market since inception> Head Office for LM is on the Gold Coast in Queensland, Australia> LM clients worldwide are only licensed intermediaries, we do not accept investment from the public directly in any country> Our expertise is in Australian property and funds management
Things you may not know about LM> Deutsche Bank manages our expertise in our structured products and issues the Capital Guarantee for the same> Ernst & Young are our Fund auditors and accountants> PKF are our company accountants> LM Income Funds generally outperform Bank Cash rates by 2.00%pa to 5.00%pa
LM Offices London Dubai Hong Kong Bangkok Johannesburg Gold Coast Sydney Queenstown
LM as a Responsible Entity> Licensed under the Managed Investments Act (1998)> Forms part of Corporations Law in Australia> Regulated by ASIC (Australian Securities and Investment Commission)> Australia is recognised for one of the best financial systems in the world for regulation> Adheres to stringent requirements and conditions which are audited annually> LM must be a public company (LM not listed)> Meets audit and compliance requirements
LM as a Responsible Entity> A minimum Net Tangible Assets (NTA) of AUD 5 million, subject to annual audit and reporting to ASIC is held by LM> Responsible Officers with necessary education and specific practical experience in each sector are present within the Company> PDS’, Constitution and Compliance Plan all lodged with regulator> Contractual agreement between the investor and fund manager takes place upon the signing of an application
Australian Economy> Remarkably resilient> Strong economic growth for more than 21 years > World record > Well above world average > Well above other developed economies > Only developed economy not to go into recession> Low sovereign debt levels > One fifth of the level of Canada’s (often considered a safe haven). Canada 36.3% > Australia 8.3% (See Global Comparison slide). > Room to move if required> Well equipped to weather offshore conditions
Real GDP Growth by Country: 2004-2012F = Forecast; 1 Based on market exchange rates.Sources: Austrade Benchmark Report 2011, International Monetary Fund, World Economic Outlook (WEO) Database, April 2011; WEO Update June 2011.
World’s 13th Largest Economy 13. Australia 2.1%F = Forecast;Sources: Austrade Benchmark Report 2011, International Monetary Fund, World Economic Outlook (WEO) Database, April 2011.
Australian Economy More to it than just the mining sectorSource: Australian Bureau of Statistics.
Australian Economy: Financial Services> One of the largest funds management industries worldwide> Largest sector in the Australian economy (11%)> Compulsory superannuation (9% annually from employer) > Building wealth for retirement> AUD sixth most traded currency> AUD/USD fourth most traded currency pair> Second largest REIT market after the US> Strong banking sector. Australia has 4 of the 9 top-rated banks in the world (AA-)
Can this Dream Run Continue?> Australia boasts strong financial fundamentals> Interest rates – room for monetary expansion> Solid fiscal finances – room for fiscal expansion > See following slide
Global Comparison:General Government Net Debt 2012 Average 64.4 Advanced 73.3 Emerging 25.7Sources: International Monetary Fund (IMF) World Economic and Financial Surveys, Fiscal Monitor, April 2011, Statistical Table 8;Austrade Benchmark Report 2011.
Can this Dream Run Continue?> Interest rates – room for monetary expansion> Solid fiscal finances – room for fiscal expansion> Links to Asia > See following two slides
AustraliaOn the Doorstep of One of the Fastest Growing RegionsNote: ‘Developing Asia’ includes Afghanistan, Republic of Bangladesh, Bhutan, Brunei Darussalam, Cambodia, China, Fiji, India, Indonesia, Kiribati, Laos,Malaysia, Maldives, Myanmar, Nepal, Pakistan, Papua New Guinea, Philippines, Samoa, Solomon Islands, Sri Lanka, Thailand, Timor-Leste, Tonga,Vanuatu, and Vietnam. ‘Newly industrialised Asian economies’ include Hong Kong, Korea, Singapore & Taiwan.Source: Calculations based on IMF World Economic Outlook (WEO), April 2010 and IMF WEO Update, July 2010.
Australia’s Merchandise Exports By Country CAGR = Compound Annual Growth Rate. FOB = Free on Board. 1 Financial ending June. Sources: Australian Bureau of Statistics, Cat No. 5368.0, International Trade in Goods and Services, Australia (Released 3 August 2011), Table 14a; Austrade Benchmark Report 2011.
Can this Dream Run Continue?> Interest rates – room for monetary expansion> Solid fiscal finances – room for fiscal expansion> Links to Asia> Private sector capital investment of AUD 500 billion over the next 5 to 10 years> Low unemployment> Effective immigration policy > Immigrants required to bring necessary skills to Australian workforce or money. > Certain skilled immigrants must inhabit specific geographical locations for a period of time to continue steady growth of all regions
LM Australian Income FundCurrent Net Indicative Rates 7 Day 1 Year 2 Years 3 Years 4 Years 5 Years Flexi GBP 3.50%pa 4.00%pa 4.25%pa 4.50%pa 4.75%pa 5.00%pa EUR 3.00%pa 4.00%pa 4.25%pa 4.50%pa 4.75%pa 5.00%pa USD 2.00%pa 2.25%pa 2.50%pa 2.75%pa 3.00%pa 3.25%pa AUD 5.50%pa 6.00%pa 6.25%pa 6.50%pa 6.75%pa 7.00%paRates are net of all fund fees and expenses, and 10% non-resident withholding tax.
LM Australian Income Fund Rates are net of all fund fees and expenses, and 10% non-resident withholding tax.
Rates that have Consistently Outperformed Cash> Rates are current as at today based on the portfolio model of the Fund> Rates are intended to outperform cash in various currencies with the longer terms attracting a greater premium> The rates are not guaranteed or fixed for the term> The Fund has a track record of delivering its target outperformance of cash in each and every year since inception> Global Portfolio Bonds> Personal investment
LM Australian Income FundDebt SecuritiesConservative lending only exposure: Loan Rate:> Average LVR 65.00% > 10.00%pa – 12.00%pa> Maximum LVR 75.00% property value> Target allocation benchmark: > 5.00% -10.00% cash > 85.00% - 95.00% mortgages
LM Australian Income Fund In the Investment Portfolio > Income and capital stability > Availability in multi-currency so it fits all client portfolios > Think 1 year minimum investment horizon for income > Available for direct investment or via the bonds > Diversity and strength of Australian property based assets:Competing with Australian Banks > Economy > Property
LM Managed Performance FundEnhanced IncomeFund Facts> Fund Inception 2001> Foreign Currency Launched 2006> Fund Size AUD307,956,802Ten Year Track Record> Delivery of Forecast Income> Delivery of Stable Unit Price
LM Managed Performance Fund In the Investment Portfolio > Competitive income > Availability in multi-currency so it fits all your clients > Think 3 year minimum investment horizon for income > Available for direct investment and via the bonds > Diversity and strength of Australian property based assets:Competing with Australian Banks > Economy > Property
LM Managed Performance FundInvestment Objective> Utilises LMs specialist property expertise to actively participate in ownership / equity like positions in Australian property based assets, secured by a debt positionBehind the scenes it delivers, through:> Utilisation of asset structure to realise all returns as income/interest only (important for tax purposes)> Target performance of 4.00%pa to 5.00%pa above cash deposit rates
LM Managed Performance FundAssets> Cash> Loans > Range of loan debt securities > Equity funding with profit benefits
LM Managed Performance Fund How it Generates Enhanced Performance A. Range of Loan Debt Securities > Usual range of commercial and development funding Adviser Fee Loan – could be a first mortgage or a second behind a senior debt funderCompeting with Australian Banks
LM Managed Performance FundHow it Generates Enhanced PerformanceB. Ownership like Position Structured as an Income Return> Profit Projection over 2 years: 20% - Profit passed to Fund each year 25% Start 1yr 2yr> Loan Rate = Equity / Profit over time $100K $20K $44K> Development over 2 years at 20%pa compounding $100K $144K
LM Managed Performance FundCurrent Net Indicative Rates 2 Years 3 Years 4 Years 5 Years GBP 6.00%pa 7.00%pa 7.50%pa 8.00%pa EUR 6.00%pa 7.00%pa 7.50%pa 8.00%pa USD 4.00%pa 5.00%pa 5.50%pa 6.00%pa AUD 7.50%pa 8.50%pa 9.00%pa 9.50%pa Rates are net of all fund fees and expenses, and 10% non-resident withholding tax.
LM Managed Performance Fund Rates are net of all fund fees and expenses, and 10% non-resident withholding tax.
LM Managed Performance FundFund Assets as at 30 September 2012Sector Diversification Commercial Loans 17.23% Retail 0.87% Industrial 0.08% Pre-Development Land 10.80% Residential 66.70% Aged Care / Retirement 4.32%
For further information, contact your LM representative; orLM Head Office E: mail@LMaustralia.com T: +61 7 5584 4500www.LMaustralia.com