Frequently Asked Questions

Who is Balmain?

Balmain is Australia’s leading non-bank commercial property debt organisation. Since its foundation in 1979, Balmain has originated and settled over $30 billion of commercial mortgage loans (Loans).  Balmain has extensive experience in managing portfolios of Loans for retail investors and institutions alike. Our institutional clients range from trading banks and investment banks to fund managers and life companies in both Australa and overseas.

Why should I consider investing in registered first mortgage loans?

Registered first mortgage loans secured over commercial real estate in Australia can provide investors with sound, regular income returns. The asset class is typically less volatile than equity or other listed investments and can provide additional portfolio diversification benefits.

Is there a minimum amount I must invest?

The minimum initial investment is $50,000 in Cash Units. The minimum investment amount for Loan Units will be advised in the relevant Supplementary PDS for each Sub Trust.

How much does it cost me upfront to invest in the Trust?

There are no investment entry or exit fees.

What is the interest rate paid on Cash Units?

The current rate is 1.50% p.a., however this is subject to change without notice.

How often is my interest paid and where is it paid?

Cash Unit income distributions are paid monthly within 14 days after the end of each month. They are paid directly to your nominated bank account or reinvested into Cash Units depending on your election. Loan Unit income distributions are paid monthly within 20 days after the end of each month. They are paid directly to your nominated bank account or reinvested in Cash Units on your election. There is no reinvestment in Loan Units. Please note we do not issue cheques for income distributions.

Could the price of my units change?

The issued unit price for Cash Units is $1.00 and given its invested in a cash management account with an AA rated Australian Bank, it is unlikely to change. The issued unit price for each class of Loan Units is specified in the Supplementary PDS for that class of Loan Unit and is usually $1.00 and will reflect the performance of the underlying investment. The prevailing unit prices for each class of Loan Unit will be set out on the website.

How long is the investment term?

There is no fixed term for Cash Units and investors can withdraw their funds with 7 business days’ notice. The investment terms for each class of Loan Units are specified in the relevant Supplementary PDS and will generally be for between 12 and 60 months. Investors should note that the term may vary if the loan is repaid early or late.

Does an investment in Cash Units receive any benefit from Loan Units?

No. Loan Units are a separate class of unit and the performance of Loan Units has no impact on the performance of Cash Units.

Could I lose money investing in Loan Units?

Investing in registered first mortgages, unlike investing in cash with a bank, carries a risk. Investors get rewarded for taking that risk by receiving a higher interest rate than equivalent term deposits. Therefore there is a risk that you could lose money.

Is my investment in Cash Unit or a Loan Unit guaranteed?

No. Neither the Trust nor any Sub-Trust guarantees investors’ capital.

If I am invested in Loan A and Loan Unit B loses money could it affect my investment?

No. Each is a separate class of Loan Unit and the performance of one has no impact on the other.

Can I invest more money in Cash Units?

Yes. At any time investors can increase their investment in Cash Units by a minimum of $5,000 online, using the BPay or EFTPOS option, or via cheque.

Can I invest more money in a Loan Unit I am already invested in?

Yes provided there are Units available.

Does the interest rate return reflect the risk of the loan?

Generally the maxim of the higher the return the higher the risk is true. However post GFC there are areas where, for a range of reasons, risk is mispriced in favour of the investor.

Investors should be aware that a number of factors may influence the interest rate charged. These include the type and location of the property, the borrower's financial position, the term of the investment, specific loan conditions and more. However, all returns are dependent on the borrower making their interest payments and repaying the loan amount.

What could be the effect on an investment in Loan Units following a mortgagee sale?

If the sale occurs at a price that is above the amount of monies owed, (including all costs) then the sale should have no impact on your overall investment. If the sale occurs at a price that is below the amount of monies owed then the sale will have an impact on either the level of return received or the return of capital.

The following order of priority applies to payment of money received following a mortgagee sale in accordance with obligations at law:

  1. Payment of other liabilities having priority at law such as Land Tax, Council Rates, GST obligations & liquidator’s fees;
  2. Payment of the Investment Manager’s costs or expenses incurred in the proper performance of duties (including legal costs on a full indemnity basis);
  3. Payment of the Investor’s capital investment; and
  4. Payment of any interest at the lower rate, and thereafter at the higher rate (if applicable), as it falls due to which the investors are entitled but not yet paid.

Note: GST may be payable on the sale of a property in certain circumstances and this will reduce the funds available for distribution to investors, in accordance with priority (i) above. Where funds are recovered from the borrower or any third party after the distribution of proceeds from the sale of the security property, those funds will be distributed to investors in the respective Sub-Trust on a pro rata basis.

What happened if a borrower wishes to extend their loan term?

Under normal circumstances this will be treated as a new loan and refinanced either by the issue of a new Supplementary PDS with new terms and conditions or, refinanced elsewhere. Either way investors will be repaid and if available be offered the opportunity to invest in the new loan via a new Supplementary PDS.

Can you recommend the best investment for me?

We are not licenced to give "financial product advice" and cannot recommend or suggest any one specific mortgage investment over another. We provide factual information in the Supplementary PDS about the discrete investment opportunity and leave the choice up to you.

How do I manage my investment portfolio in the Trust?

The Investor Control Console (ICC) is your online account management tool which provides you the ability to securely manage your portfolio. You will receive login details after your application is successfully completed.

What access does the Investor Control Console provide me with?

The ICC provides all the tools nessesary to manage your Investor Account.

Including: 

  • Access to new Loan Unit investments 
  • Details on the location of the security property(s) relevant to the Loan Unit(s) in which you are invested
  • Photographs of the security property 
  • Balance of Cash Units and Loan Units. 
  • The payment Status and Credit History of the Loan Units in which you are invested 

What do I do if I have lost my password?

Your password can be reset using the reset password form

What should I do if I have a complaint?

In the first instance please contact the Balmain Private Investments Team by calling 1800 138 231 or by writing or emailing the Responsible Entity at 

Mail: Balmain Fund Administration Limited
Attn: The Compliance Officer
Level 14, 60 Castlereagh Street 
Sydney NSW 2000

Telephone: 1800 138 231

Email: info@balmainprivate.com.au

The Responsible entity will acknowledge your concern, investigate it and report back to you.

 

What should I do if the Responsible Entity does not resolve my complaint?

If your complaint is not resolved to your satisfaction or is not resolved within 45 days you may refer it to the Credit Ombudsman Service Ltd (COSL) an external dispute resolution scheme, of which the Responsible Entity is a member. COSL’s details are: 

Mail: Credit Ombudsman Service PO Box A252 Sydney South NSW 1235

Telephone: 1800 138 422

Fax: (02) 9273 8440

Email: complaints@cosl.com.au 

What do I need before I complete the application?

In order for us to verify your identity, you will be required to provide some basic personal information such as your name, date of birth, address, drivers licence number and bank account details.

How do I make payment for my investment?

Money can be transferred via Bpay, EFT or Cheque.  The correct details will be provided once you have completed the online application form.

Is there a cooling off period?

If after applying for Cash Units in the Trust you decide the investment is not appropriate and you notify us in writing within 14 days we will repay the money to you. On repayment we will make adjustments for market movements up or down as well as any tax and reasonable costs. This is a regulated requirement that all fund managers must adhere to. However, as the investment in Cash Unit can be withdrawn within 7 Business Days, all you need to do is to request a redemption via the ICC.

In the case of Loan Units, once you have submitted a Transfer Request to convert your Cash Units into a class of Loan Units you do not have a statutory right to a “cooling off” under the Corporations Act 2001. Once submitted your Transfer Request is irrevocable. 

What should I do if I am an overseas investor?

If you do not reside in Australia and you are thinking of investing in the Trust please contact us via email on info@balmainprivate.com.au

Do I have to use the Investor Control Console to manage my Investor Account?

Yes. The Balmain Discrete Mortgage Income Trusts is an online product.