Investor Presentaiton
Investec
Australia Property Fund
Proposal to internalise management and acquire third party funds management platform
Overview
Terms agreed
Benefits/
Financial
Outcomes
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As announced to the ASX and the JSE on 10 June 2020, the Responsible Entity established a Board sub-committee comprising Richard Longes, Sally
Herman, Hugh Martin and Georgina Lynch (the "Independent Directors") to commence discussions with respect to internalising the management of IAPF
These discussions resulted in IAPF entering into the Implementation Deed with the Investec Group in relation to an internalisation proposal (the "Proposal"), 1
which includes:
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the acquisition of the management rights of IAPF (along with the current management team);
the acquisition of the investment and asset management rights of Templewater Australia Property I, L.P. and its sub-trusts ("TAP Fund”), a third-party
fund with a broad mandate to invest in opportunistic transactions in the Australian and New Zealand real estate markets; and
a commitment by IAPF II to invest up to $30 million in the TAP Fund (the "TAP Commitment")
IAPF's existing management team will continue to serve as the management of IAPF. Key Management comprises Graeme Katz (Executive Director and
Chief Executive Officer), Zach McHerron (Fund Manager) and Kristie Lenton (Chief Financial Officer)
IAPF II will pay $40m² to the Investec Group to acquire the management rights of IAPF and the TAP Fund ("Total Consideration"). This represents a 9.0
times IAPF II annualised forecast FY21 EBIT multiple
The Total Consideration will be funded by drawing on existing IAPF debt facilities
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The Proposal provides significant strategic and corporate governance benefits for Unitholders
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Expected to deliver 0.1% Funds From Operations ("FFO") accretion and 4.8% Adjusted Funds From Operations ("AFFO") accretion for FY21 on a pro forma
basis³
The Proposal is expected to result in a FY21 pro forma distribution of 8.85cps
Establishes a third-party funds management platform by way of the management rights to the TAP Fund and the provision of asset management services in
relation to certain assets in which the Investec Group retains an interest
Unanimous
recommendation
and Independent
Expert opinion
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The Independent Directors unanimously recommend the Proposal, in the absence of a Superior Proposal
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The Independent Expert has concluded the Proposal is fair and reasonable to, and in the best interests of, Unitholders not associated with the Investec Group
1. As announced to the ASX and the JSE on 15 October 2020. 2. Subject to certain adjustments as described in Section 11.1 of the Explanatory Memorandum. 3. See Section 6 and Annexure B of the Explanatory Memorandum for details of
the basis of preparation, details of the FFO and AFFO calculations and the underlying assumptions.
Investec Australia Property Fund | Internalisation and funds management proposal
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