Innovators in Investment COMPANY PROFILE

Transcription

1 Innovators in Investment COMPANY PROFILE

2 Welcome to Quantum Quantum Group was founded in 1986 as a boutique financial services group. Since then our objective has been to assist high-net-worth individuals, family offices and institutions to build wealth and accumulate assets. A core part of our business is also solving their often complex tax issues. At Quantum we have the skills, experience and expertise to meet the financial needs of our clients. We take a responsible, but innovative approach. Our focus is to identify investment opportunities that perform over the medium to long term to create sustainable wealth and prosperity for our clients through providing premium service, knowledge and commitment to their individual circumstances across wealth management and taxation. Our Guiding Values are; quality in everything we do; professionalism and ethics in all our actions; growth and development of our people and skills; excel in service and communication to clients. It is with pleasure that I welcome you to the Quantum Group. Peter Gribble Managing Director

3 Our Structure Quantum at a glance Quantum Funds Management Organisation Chart Contents Board of Directors Advisory Board Due Diligence & Approval Process Investing with Quantum Track record

4 Our Structure Our Structure Quantum Business Units Quantum Funds Management Quantum Private Wealth Quantum Investment Solutions Development Funds Single Mandate Accounts Mezzanine, Preferred Equity & Debt Club Funds Mortgage Funds Taxation Portfolio Management SMSF Quantum Link Portfolio Warrants Commercial, Residential, Retail, Industrial p4 Quantum Group > Our Structure

5 Our Structure Peter Gribble B.EC, ASA, ANA, FITA, AFPA Managing Director Peter Gribble is the founder of Quantum and responsible for the direction and development of its products. Peter is a qualified accountant and has over 25 years experience in tax, the investment markets and property. Peter has been involved in approximately AU$1 billion of property transactions over that period, including direct involvement in most aspects of property acquisitions, management and development. Peter is supported by a team of 15 staff based in Sydney, along with an independent board, an advisory board and compliance committee. Smart Investment Takes Time Our Structure < Quantum Group p5

6 Quantum at a glance Quantum is a leading investment group that has been in operation since 1986, providing both financial advice and investment opportunities in a range of property, mortgage and listed equity investments to investors. Quantum operates a boutique funds management business and operates a complete superannuation compliance and administration service. It has a strong background, knowledge and experience in property, accounting, taxation and investment markets. Quantum has successfully established over 23 property funds and has completed property investments & projects with a total asset value of approximately $1 billion. The property funds have included investment opportunities in, commercial property, retail, industrial, residential development, retirement living and structured debt. Quantum employs a disciplined underwriting methodology and investment criteria, focuses on capital preservation, active asset management and relies on its market knowledge and expertise to identify the optimal purchase and disposal strategy on its property investments. Quantum s investment strategy combines and focuses on four core components that it believes are critical the success of its property funds: access to proprietary deal flow; transactional expertise; effective asset management and; development processes and calculated exit strategies. Quantum believes its proven investment strategy uniquely positions the company to source, structure and create attractive real estate investments and believes its strategy ensures a consistent flow of investment opportunities to its clients. p6 Quantum Group > Quantum at a glance

7 Quantum Funds Management Quantum Funds Management (QFM) is a Responsible Entity registered with the Australian Securities Investment Commission under the Managed Investments Act 1998 and holds an Australian financial services licence co-investments (AFSL ). Quantum has the ability to offer clients the following services; Investment - Direct investment management, co-investments, single mandates, funds or club structures; Capital Mezzanine debt, preferred equity, equity or debt Sectors - Quantum has made investments in opportunistic assets and core assets across the commercial, retail, industrial and residential sectors. Quantum employs a strong corporate governance process on all its investment decisions to ensure all investments have appropriate risks assessed and investments are made in line with the investment mandate. The existing team has over 40 years experience in the market with a well established market presence and an extensive network of relationships within the real estate market, financial institutions, developers, private owners, administrators & receivers and government agencies to enable proprietary deal flow to source real estate opportunities. Quantum advises a number of high net worth individuals and institutional investors and has an excellent track record in creating optimised tax effective investment structures. Quantum has been an active purchaser of real estate assets in Australia and the USA over the past two decades having established and managed 23 property funds with total investment in excess of A$1 billion. Quantum Funds Management < Quantum Group p7

8 Organisation Chart Quantum Funds Management Financial Controller Property Accounting Senior Asset Manager Board of Directors Managing Director Fund Manager Acquisitions manager to Australia Advisory Committee 3 External Professionals Acquisitions manager to USA Investor Relations p8 Quantum Group > Organisation Chart - Quantum Funds Management

9 Board of Directors Benjamin Dillon Chairman 2 years with Quantum Mr. Dillon has over 20 years experience in a variety of business related roles including Westpac where he was a senior executive in Institutional Bank originations responsible for the Hotels portfolio before becoming Head of Property. Prior to this Mr Dillon was an executive at Macquarie Bank Limited where he specialised in hospitality and leisure property transactions and also a Partner and Director of corporate finance at KPMG. Prior Experience Bachelor of Economics & Law from the University of Sydney. Masters of Management (Marketing) from the Macquarie University Graduate School of Management. Fellow of the Financial Services Institute of Australasia and a Member of the Royal Institution Chartered Surveyors. Chartered Accountant. Peter Gribble Managing Director 26 years with Quantum Peter Gribble is the founder of Quantum and was responsible for the direction and development of many of its property products. Mr. Gribble is a qualified accountant and has over 20 years experience in tax, the investment markets and property. Mr. Gribble has been involved in over AU$1 billion of property transactions over that period, including direct involvement in most aspects of property acquisitions, management and development. Prior Experience Bachelor of Economics majoring in Accounting at La Trobe University Melbourne, Taxation Institute of Accountants Member of ASCPA s CPA 1993, Property, Stock, & Business Agent JoAnna Fisher Non-Executive Director 7 years with Quantum JoAnna Fisher has over 20 years of experience in the financial sector, with a thorough knowledge of investment management and investment banking. Ms. Fisher is a former General Manager Strategy and Marketing for the Commonwealth Bank. She also spent 12 years at Bankers Trust Corporation in the United States, Japan, the United Kingdom and Australia, developing and managing the institutional funds management businesses. At Bankers Trust Corporation, Ms. Fisher was a member of the Bankers Trust Global Asset Allocation Committee. Prior Experience B.S. degree in Economics & Asian Studies from the Australian National University. Diploma from the Australian Institute of Company Directors. Board of Directors < Quantum Group p9

10 Panel Advisory of Directors Board Les Koltai Partner Real Estate: DLA Piper 24 years Les Koltai is a partner of leading Australian law firm DLA Piper and is head of its Investment Real Estate team. With extensive experience in the investment real estate industry, Les has acted on a broad range of local and cross border real estate transactions including domestic and cross-border direct and fund to fund real estate investments, developments, sales and acquisitions, foreign investment advice, real estate joint ventures, mergers and acquisitions of REITs, real estate asset management (including asset and property management, leasing and general commercial advice. Prior Experience BA/LLB - UNSW LLM - Sydney University Agent David Woolford Managing Director Cushman Wakefield 28 years David is currently the Managing Director at Cushman Wakefield. From David lead Knight Frank Australasia as CEO/ MD. David has been involved in the property market since 1982, his career experience has involved working across all sections of the business to gain an in depth knowledge of the property market. A licensed valuer and a National Board Member of the Property Council of Australia and a member of the Audit Committee. Prior Experience Bachelor Of Applied Science, Property Resource Management Valuation Licence Peter Beaumont Managing Director Global technology Company 24 years Currently is the managing director of a global technology company. Responsible for overseeing the investment groups technology development and implementation worldwide. Peter was also a senior member of the Commonwealth Bank of Australia, consulted for the Public Trustee of NSW and Self Managed Superannuation Funds. Peter has extensive experience in raising capital, management of mortgage portfolios and restructuring debt. p10 Quantum Group > Advisory Board

11 Advisory Board Due Diligence & Approval Process Quantum Investment Committee Independent Advisory Committee Independent Valuation Board of Directors An Advisory committee made up of external independent senior industry professionals, from Banking, Legal, and the Property sectors will consider; if the Investment is in line with the Fund Strategy, have all risks been considered and appropriately mitigated, are the assumptions in the financial model fair and reasonable, can the investment be funded and is the correct legal documentation in place. Due Diligence Phase Investment Approval Phase Activities conducted Preliminary feasibility study A detailed feasibility study will be conducted covering the following issues: Revenue, cost and profit estimate Timing Town planning Site issues Legal review Regulatory, taxation Capital Investment Exit Strategy Market Research Scenario modelling Initial Approval Final feasibility study Further investigations and sensitivities will be conducted following valuation and assessment by Advisory Committee, prior to lodgment of report to the Board from final approval. Final Approval Due Diligence & Approval Process < Quantum Group p11

12 Investing with Quantum Access Execution Structuring & Finance Due Diligence Monitoring Capitalise on the existing teams combined 40 years experience and extensive network of relationships with brokers, developers, financial institutions to access opportunities on and off the market. Quantum has successfully executed over A$1 billion of property and development transactions. Its entrepreneurial approach mean the team is able to think outside the box and respond to opportunities quickly, execute efficiently and implement calculated exit strategies. Benefit from extensive experience structuring transactions to minimise tax and costs and utilise their strong financial relationships to secure funding for investments. This approach enhances returns while ensuring that the risks are minimised. Quantum applies a rigorous underwriting process from acquisition to disposal. This process provides Quantum with a well-informed, comprehensive view of the quality of the opportunity, its ability to add value through active management and its ability to achieve an exit from the investment and meet the investors return parameters. Quantum continually evaluates actual s V budget s throughout the investment lifecycle to proactively manage risk. Quantum has an excellent understanding of the risk/ reward matrix and possesses excellent development management and property re-positioning skills. p12 Quantum Group > Investing with Quantum

13 Track record Track record < Quantum Group p13

14 Opportunistic Funds Core Funds Investments Location Property Type Total Investment Equity Investment Realised Proceeds Unrealised Value Storage King Granville Sydney Industrial 4,000 1,830 2, , % 1.3x Storage King St Peters Sydney Industrial 3,560 1,288 1, , % 1.5x Storage King Chatswood Sydney Industrial 3,750 1,661 1, , % 1.0x Storage King Lane Cove Sydney Industrial 10,650 3,850 5, , % 1.5x 99 Forbes St Sydney Office/Warehouse 12,100 5,209 4, , % 0.8x SUB TOTAL STORAGE 34,060 13,838 15, , % 1.1x Total Value Gross IIR Investment Multiple 20 Clarke Street Sydney Office 1, , , % 2.6x Taren Point Sydney Industrial 26,920 3,900 18, , % 4.6x 40 Pacific Hwy Sydney Office 4,150 1,950 3, , % 2.0x City Beach Wollongong Residential 57,042 5,357 20, , % 3.8x 155 Queen St Brisbane Retail 23,700 10,191 25, , % 2.5x The Wharf Sydney Retail 24,800 10,555 9,608 2,500 12, % 1.1x 370 Queen St Brisbane Office 10,950 5,560 12, , % 2.2x Agnes St Albion Brisbane Residential 7,500 1,144 3, , % 2.9x Eclipse Wollongong Residential 51,415 6, , % 0.7x Casuarina Tweed Coast Residential 31,507 8, ,750 2, % 0.3x Gateway Townsville Residential 65,785 14,200 13, ,602 NA 1.0x Gepps Cross Adelaide Retail 135,000 5, ,440 5, % 1.1x Mona Vale Sydney Residential 34,800 3,500-5,077 5, % 1.5x SUB TOTAL OPPORTUNISTIC FUNDS 475,369 76, ,249 14, , % 1.7x 1049 York St Sydney Office % 1.9x 47 Fiction St Sydney Office 2, % 1.2x 515 Pacific Hwy Sydney Office 6,725 1,960 3, , % 1.8x 60 York St Sydney Office 2, , , % 2.7x SUB TOTAL CORE OFFICE 11,955 3,902 7, , % 1.8x TOTAL INVESTMENTS 521,384 94, ,320 14, , % 1.6x p14 Quantum Group > Track record As at 31/12/12

15 155 Queen Street, Brisbane Key Terms Asset type: Office Acquisition date: June 2003 Exit date: November 2007 Total investment: A$23.7 million Quantum equity commitment: A$10.2 million Leverage: 75% Quantum Australia s share: 100% Realised Gross IRR: 26.7% Realised equity multiple: 2.5x Investment overview Quantum purchased the property with the possibility that the major tenant may vacate as the lease was close to expiry. Quantum was able to negotiate new leases with the major tenant and include a demolition clause in the new lease. This locked in the income value to the property and unlocked the redevelopment potential of the property. Quantum identified the site opportunity for further development and commenced securing a DA for a commercial development above the centre. Quantum identified that the Brisbane mall was potentially under rented and under valued when compared against other Australia CBD malls. Transaction structure Quantum negotiated the purchase of the property for AU$23.7 million from a local private investor and exited at $37.8million. 155 Queen Street had a key location on the prime retail shopping mall in Brisbane CBD. The site was strategically located between two institution owners. Both owners had intentions to develop their sites and this site assisted with the amalgamation of their developments sites Ultimately they become the buyer of the property. Track record < Quantum Group p15

16 Taren Point, Sydney Investment overview The Company committed A$1.1 million to secure the land under a contract from Toyota Motor Corporation Limited, who occupied the site. Quantum addressed contamination issues as the site was previously a landfill. Quantum also needed to address sulfate soils and carbon contaminations from Toyota s occupation of the site. Quantum obtained a master plan approval over the property and subdivided the property into five lots in addition to seeking a retirement village development approval under a newly commissioned government ordinance. Quantum was able to settle the purchase of the property around the same time as the sale of four of the five lots. This allowed Quantum to mitigate part of the risk of the transaction as well as requiring minimal equity and maximizing the property IRR. Quantum obtained a development approval for 220 residential apartments on the remaining lot, which Quantum later sold prior to commencing any construction on the property. Investment overview Quantum contracted to purchase the property with a two-year delayed settlement while Toyota moved from the site. The delayed settlement allowed for a repositioning of the asset by subdividing the property into five separate lots to reduce the holding risk of the property and provided multiple exit opportunities. Key Terms Asset type: Industrial and retirement village Acquisition date: June 1999 Exit date: January 2002 Total investment: A$26.9 million Quantum equity commitment: A$3.9 million Leverage: 37% Quantum Australia s share: 100% Realised Gross IRR: 94.6% Realised equity multiple: 4.62x p16 Quantum Group > Track record

17 370 Queen Street, Brisbane Key Terms Asset type: Office Acquisition date: June 2004 Exit date: June 2008 Total investment: A$11 million Quantum equity commitment: A$5.6 million Leverage: 70% Quantum Australia s share: 100% Realised Gross IRR: 29.5% Realised equity multiple: 2.24x Investment overview Quantum purchased the property with 3,500 square meters of net lettable area and a weighted average lease expiry ( WALE ) of only 1.2 years. Quantum progressively refurbished each floor as tenants vacated and released whole floors to new tenants to maximize the rents, in some cases up to a 75% increase from the previous tenants. Quantum was able to negotiate new leases with terms ranging from 3 to 7 years and generally with market reviews of the rental income every 3 years. Quantum also executed a major repositioning of the ground floor retail space with a new refurbishment which made for an impressive interface of the building with the streetscape. Once the property was fully refurbished and the rents stabilized, Quantum sold the property to a core fund with a WALE of over 5 years. Transaction structure Quantum negotiated the purchase of the property for AU$11 million from a local private investor with a delayed settlement of 6 months and exited at $20m. The property was purchased at a very low cost per square meter compared to similar office buildings in the area. At the time of purchase, 370 Queen Street appeared under-rented when compared to similar refurbished office buildings in Brisbane. 370 Queen Street has a key location in the Golden Triangle of Brisbane, diagonally opposite the tallest building in Brisbane. Track record < Quantum Group p17

18 Track Dibbs record Street, Townsville (Delivery Completed) Investment overview Quantum purchased the land in Townsville to develop a 12-story residential tower on the waterfront at the fringe of the CBD consisting of a mix of 24 luxury residential apartments and 88 resort-style managed apartments. construction was completed in late Before completing the acquisition, Quantum contracted Matrix, one of Queensland s largest residential builders, to construct the apartment building at a fixed price and on a fixed 20-month schedule. Quantum contracted with Oaks Hotels & Resorts to purchase the rights to the on-site management and leasing business for the managed apartments. Oaks Hotels & Resorts is a publicly traded national hotel and apartment operator. Quantum leveraged the strength of Oaks Hotels & Resorts to achieve sales of individual apartments Investment overview Quantum contracted to purchase the property conditional upon securing an onsite operator for the managed apartments and a builder to construct the tower within the agreed budget. This gave Quantum time to pre-sell a number of the apartments before having to pay for the land. By purchasing the property conditionally, Quantum was able to reduce the risk of the project while fixing the construction cost of the building, which in turn maximized the return. Quantum was able to identify that the current owner, a private developer, did not have the capital to complete the project, and was able to negotiate terms to purchase the property that gave the optimal outcome for both parties. Key Terms Asset type: Residential apartment Acquisition date: October 2006 Exit date: Current Total investment: A$56.5 million Quantum equity commitment: A$14.2 million Leverage: 57% Quantum Australia s share: 100% Projected gross IRR: Returns to investors were taken as stock in the development at a discount to market value p18 Quantum Group > Track record

19 City Beach, Wollongong Key Terms Asset type: Residential apartment Acquisition date: June 2000 Exit date: June 2006 Total investment: A$57 million Quantum equity commitment: A$5.4 million Leverage: 56% Quantum Australia s share: 50% Realised Gross IRR: 40.5% Realised equity multiple: 3.76x Investment overview Quantum purchased the property and obtained a development approval for a three- stage residential apartment complex. Stage 1 of the property consisted of 56 residential apartments, Stage 2 consisted of 62 residential apartments and Stage 3 consisted of 110 residential apartments. Quantum developed Stages 1 and 2 and sold the property through their on-site sales office as individual residential apartments. Quantum won a number of awards for the design and development of the Stage 1 apartments. Quantum sold Stage 3, prior to the completion of the development of Stage 2 for a profit. Transaction structure Quantum purchased the property for A$5 million. Quantum bought out one of the two existing joint ventures partners which provided Quantum with the same purchase price as was paid by the existing joint venture partners when they first purchased the property. As the land was developed in three stages, Quantum was able to minimize the equity required to complete the project and choose from multiple exit options and timings to minimize risk while maximizing returns. The project was a 50/50 joint venture with Miltonbrook, a local developer who provided the local expertise and experience to ensure the development was delivered in a timely manner and on a controlled budget. Track record < Quantum Group p19

20 Gepps Cross, Adelaide (Unrealised) Investment overview Gepps Cross is currently Australia s largest Bulky Goods Retail centre encompassing over 62,000 sqm of retail space. The centre is located 10kms north of Adelaide CBD in Adelaide s residential growth corridor. The construction was completed in mid The centre is anchored by Australia s pre-imminent retailers with 90% of the tenants being national retailers. The centre is 100% leased. Transaction structure Quantum took a 37.5% interest in the property. Gerry Harvey owner of Australia s largest retailer Harvey Norman and Gepps Cross s largest tenant is one of the part owners of the centre. Quantum s investment was a late stage development investment. Quantum did not invest its capital until development approval was secured, a fixed price build contract was agreed, tenant pre-commitments exceeded 50% and construction finance was unconditionally approved. Key Terms Asset type: Retail Acquisition date: June 2008 Exit date: Unrealised Total investment: A$135 million Quantum equity commitment: A$12 million Leverage: 60% Quantum Australia s share: 37.5% Realised Gross IRR: Unrealised Realised equity multiple: Unrealised p20 Quantum Group > Track record

21 Albion, Brisbane Key Terms Asset type: Residential apartment Acquisition date: September 2006 Exit date: 2008 Total investment: A$7.5 million Quantum equity commitment: A$1.1 million Leverage: N/A Quantum Australia s share: 100% Realised Gross IRR: 156% Realised equity multiple: 2.9x Investment overview Agnes St was a 5,658sqm site located just 5km north of Brisbane CBD. Quantum identified the site was located in a urban renewal area and our research suggested that the site could achieve an improved yield under new planning codes. Quantum secured a DA approval for the residential development in February Transaction structure Quantum took an option over the site and worked to achieve a development approval for the a residential development. By taking an option on the site Quantum was able to work through its business to plan to a point where it was confident of the outcome before committing its equity to the project. Quantum onsold the site with the benefit of the improved development approval to a local developer. The sale presented an excellent IRR return on equity for the project and Quantum exited and reinvested its capital in other opportunities. Track record < Quantum Group p21

22 Monavale, Sydney Investment overview DA approved residential site for 20 apartments located on Sydney northern beaches. The developer had insufficient capital to construct the project and was seeking a mezzanine debt or preferred equity participating. The investment was for an 18 month term. Transaction structure Quantum provided 50% of the required capital as mezzanine debt taking a second mortgaged over the land as security and 50% as preferred equity also secured via the second mortgage. By position 50% as preferred equity, Quantum was able to increase returns to investors as it attracted a coupon rate of 28% to reflect the priority ranking of the capital. The mezzanine debt attracted a coupon rate of 22% To protect Quantum s capital, Quantum required that no draw down of funds occurred until 100% of gross pre-sales cover the investment amount A fixed price build contract was executed Senior debt facility for construction was secured All project costs were verified by an independent third party and a valuation supported the gross realisations. Key Terms Asset type: Residential apartment Acquisition date: March 2012 Exit date: September 2013 Total investment: A$34.8 million Quantum equity commitment: A$3.5 million Leverage: 70% Quantum Australia s share: 100% Realised Gross IRR: 28% Realised equity multiple: 1.5x p22 Quantum Group > Track record

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24 Corporate Directory Head Office Office Address Level 5 Fairfax House Pitt Street Sydney NSW 2000 Postal Address GPO Box 2593 Sydney NSW 2001 Australia Brisbane Office Address Level Ann Street Brisbane QLD 4000 Melbourne Office Address Ground 430 Little Collins Street Melbourne VIC 3000 Texas Office Address 2131 N Collins Street Suite # Arlington Texas Atlanta Office Address 5174 McGinnis Ferry Rd Suite 205 Alpharetta GA Hong Kong Office Address Level 8 Two Exchange Square 8 Connaught Place Hong Kong Enquiries Telephone Number Facsimile Number General & Media Enquiries info@quantumgroup.com.au Investor Enquiries investors@quantumgroup.com.au