Investment in Source Capital Limited is only available to wholesale investors as defined in the Financial Markets Conduct Act 2013.
Investment Summary
Source Capital Limited (Source Capital) is a wholesale finance company based in Auckland, New Zealand, formed to raise funds for property development projects undertaken by Source Group Limited. Investment in Source Capital is available to wholesale investors who receive a fixed 12% per annum return, backed by the directors’ Owners Equity, a guarantee, and property security.
Investment in Source Capital Limited is open to qualifying wholesale investors who meet one or more of the following criteria:
- investors who invest at least $750,000 in the fund, or;
- investors who are relatives of the director/s of Source Capital Limited, or;
- investors who are close business associates of Source Capital Limited, or its director/s or senior manager/s or;
- investors who are investment businesses, or;
- large investors with net assets or a consolidated turnover of more than $5 million over the last two financial years (“large” investors) or;
- Investors who otherwise qualify under an exclusion in Schedule 1 of the Financial Markets Conduct Act 2013.
Still not sure of your eligibility?
If your investment is $750,000 then you are automatically eligible.
If you’re looking to invest between $250,000 and $750,000, and are unsure of your eligibility then get in touch and we can assist you.
The definition of a Wholesale Investor as per the Act.
Source Capital distributions are made every three months on the 10th March, 10th June, 10th September and 10th December of each year.
Personal Guarantee – the director of Source Capital will provide a limited personal guarantee equal to $1,000,000 in respect of Source Capital’s obligations to Class A Shareholders.
Owners Equity – the director of Source Capital will at any given time, have invested $500,000 which ranks below the rights of investor funds.
Capital raised will be advanced to Source Group (or Source Group SPV) for the purposes of financing property development projects.
Funds can be applied to all stages of the development process including the development, acquisition, consenting, marketing, and administrative activities.
Investors in Source Capital Limited are not charged an additional fund management fee. Running costs are covered by Source Group Limited.
Source Capital Limited will deduct taxes payable by you on dividends on your behalf. You will need to provide the Company with your IRD number and any other information required by the Company.
A Source Group Fund
Source Capital is a financial vehicle that helps fund the site acquisition and project development undertaken by Source Group.
The Source Group Edge
We consider ourselves to be risk averse developers. Our brand is named ‘Source Group’ for good reason as sourcing viable and profitable development deals is what we do best. The typical site we secure goes through extensive investigations and feasibility tests before we go unconditional on the contract.
Our acquisitions are mostly conducted off-market which usually allows for longer due diligence periods and contract conditions that protect the groups’ interests. We have full-time employees dedicated to site sourcing and negotiation as we like to develop the very best opportunities.
Source Group is a boutique developer and we plan to keep it that way. Our business model does not rely on high volumes but rather on carefully considered acquisitions, meticulous planning, and tightly controlled project management.
From a profitability perspective, for a project to meet our criteria, it first must pass our financial tests. The majority of sites we investigate don’t meet our hurdle rate expectations. We set a high financial benchmark and measure risks carefully, seeking alpha in each project. We believe the best projects are not always the most profitable in dollar terms, but more importantly, offer the best risk-adjusted return.
The majority of our land acquisitions include deferred/delayed settlements. Often we negotiate settlement dates between 6-12 months in the future. Delayed settlements suit our development model allowing us to maximise return and minimise risk.
In many cases, by the time we settle the land, we will already have an approved resource consent, approved building consent, and be 50-100% pre-sold. This is not the typical development model for most developers, but for us, it means we can substantially de-risk the project early, and reduce holding periods and interest costs. This is just one of the risk mitigating strategies we employ throughout the development process.
Hamish Anderson
Managing Director
Tom Naylor
Chief Financial Officer
Luke Bailey
Development Manager
Tess Marshall
Administrative
Rebecca Goddard
Acquisitions
Deborah Anderson
Analyst
Norline Stamper
Accounts
Our Team
Our boutique team offer a diverse range of experience and skills. From initial site sourcing & acquisition through the development and delivery of our new build homes, our dedicated team all play a role in the process.
As the group’s director, Hamish has over 15 years’ experience in the property industry, with vast experience in land sourcing, project marketing, capital raising, property sales, and development.
Hamish holds a Master’s degree in Property Development and Investment and also holds a designation as a Certified Hedge Fund Professional.
Security Offered
- The directors ‘Class B’ shares rank below the investors’ redeemable ‘Class A’ preference shares
- A personal guarantee of $1,000,000 from the company’s director.
- When funding a project, the total funding from Source Capital Limited and any other bank or lender(s) will not exceed 70% of the completed project valuation for the development.
- Before construction finance can be drawn down from the fund, the project must have pre-sold at least 70% of the proposed lots/homes.
- A standardised draw-down table will be created before project funding is released.
- The directors’ equity (Class B Shares) will not be withdrawn from the Company until the company has redeemed all investors’ Class A Shares.
Source Capital will take the best available security for its lending which may include:
- When funding a project before land settlement has taken place, a deed of assignment over the key contracts including the Sale and Purchase Agreement for the land and any pre-sale contracts.
- When funding a project after land settlement has taken place, first mortgage security will be held by Source Capital where there is no primary funder.
- If there is a primary funder, Source Capital Limited will have second mortgage security, with the primary funder taking first mortgage security and first assignment right of key contracts.
- In any scenario, Source Capital will take the best security and guarantees available.
Our Partners
