360 Capital Reit · ASX:TOT
360 Capital Reit — 360 Capital Total Return Fund — Investor Presentation (April 2017)
42 slides from 360 Capital Reit's investor presentation, Apr 11, 2017
Slide 1: Capital Raising Presentation
360 Capital For personal use only G r o u p 360 Capital Total Return Fund (ASX: TOT) Capital Raising Presentation April 2017 JOINT LEAD MANAGERS NOT FOR RELEASE IN THE UNITED STATES
Slide 2: Disclaimer
Disclaimer 360 Capital G r o u p This presentation has been prepared by 360 Capital FM Limited (ACN 090 644 396, AFSL 221974) as responsible entity of the 360 Capital Total Return Fund (comprising 360 Capital Total Return Passive Fund ARSN 602 304 432 and 360 Capital Total Return Active Fund ARSN 60
Slide 3: Disclaimer
Disclaimer 360 Capital G r o u p Forward Statements are by their nature subject to significant known and unknown risk, uncertainties and contingencies and other factors which are outside the control of 360 Capital Group, that may cause actual future results to differ materially from those expressed
Slide 4: Table of contents
Table of contents 360 Capital G r o u p For personal use only Section 1 Transaction Overview 5 2 The Investments 13 3 Capital Raising 17 4 Financial Information 21 5 About TGP 24 Appendix A Key Risks 34 B Glossary 39 4 I TOT April 2017 Capital Raising Presentation 360 Capital Total Return Fund
Slide 5: 1. Transaction Overview
360 Capital For personal use only G r o u p 1. Transaction Overview 5 I TOT April 2017 Capital Raising Presentation 360 Capital Total Return Fund
Slide 6: TOT's investment mandate
TOT’s investment mandate 360 Capital G r o u p TOT TGP For personal use only “TOT is well positioned to take advantage of “TOT is TGP’s flagship ASX listed volatility in real estate and capital markets… “ managed fund” Equity investing Debt investing • TGP’s strategy is to remain capital light Direc
Slide 7: Transaction overview
Transaction overview 360 Capital G r o u p • 360 Capital Total Return Fund (“TOT” or “Fund”) has entered into agreements for two major For personal use only transactions o $74.0m equity investment1 − 20% cornerstone stake in the 360 Capital 2017 Private Equity Real Estate Fund (“360CPEREF”). This wi
Slide 8: Transaction overview (cont'd)
Transaction overview (cont’d) 360 Capital G r o u p • The Offer Price will be $1.15 per Stapled Unit (representing a 3.3% discount to the 5-day VWAP) For personal use only • Moelis Australia Advisory Pty Limited (“Moelis”) and Morgans Corporate Limited (“Morgans”) have been appointed as Joint Lead M
Slide 9: Key highlights
Key highlights 1 360 Capital G r o u p EARNINGS 5.1% increase in FY17 EPS to 8.4 cps1 (7.3% yield at Offer Price) For personal use only DISTRIBUTIONS 6.6% increase in FY17 DPS to 8.1 cps1 (7.0% yield at Offer Price) MARKET CAP 115.0% increase in the market capitalisation of TOT to $75.8m2 Introducti
Slide 10: Key offer matrix
Key offer matrix 360 Capital G r o u p Offer Price $1.15 per Stapled Unit For personal use only Total Offer amount $40.6m Institutional Placement1 $5.3m 1 for 1 Entitlement Offer1 $35.3m Forecast FY17 EPS / operating earnings yield1 8.4 cents / 7.3% Forecast FY17 DPS / distribution yield1 8.1 cents
Slide 11: TOT's underlying investment returns to date
TOT’s underlying investment returns to date 360 Capital G r o u p • TOT accumulated a $54.8m1 investment in Industria REIT (“IDR”) (a 15.3% ownership stake For personal use only holding 24.9m IDR units) IRR on investment o Average entry price of $2.07 per IDR unit verses a trading price of $2.20 per
Slide 12: Transaction structure
Transaction structure 360 Capital G r o u p Passive returns Active returns in For personal use only from investment form of fee in debt and revenue equity 360 Capital Total Return Passive 360 Capital Total Return Active Fund (ARSN 602 304 432) Fund (ARSN 602 303 613) $5.0m equity commitment 50.0% in
Slide 13: 2. The Investments
360 Capital For personal use only G r o u p 2. The Investments 13 I TOT April 2017 Capital Raising Presentation 360 Capital Total Return Fund
Slide 14: Investment in 360CPEREF
Investment in 360CPEREF 360 Capital G r o u p • $74.0m investment in 360CPEREF1, funded through the following: For personal use only TOT’s investment o $40.5m from the sale of IDR units to 360CPEREF at $2.20 per unit o $33.5m in cash • 360 Capital Group has established 360CPEREF as the first of a po
Slide 15: Investment in 360 Capital 2017 PERE Pty Limited
Investment in 360 Capital 2017 PERE Pty Limited 360 Capital G r o u p • 25% interest acquired for nominal consideration For personal use only TOT’s investment • Pre-emptive right allowing TGP to acquire TOT’s interest for nominal consideration where TOT is subject to a change of control Company • 36
Slide 16: Allocation to mezzanine finance transactions
Allocation to mezzanine finance transactions 360 Capital G r o u p • Identified an opportunity to incorporate a specialised finance provider, Australian Mezzanine Finance Pty For personal use only Limited, to focus on structured capital solutions for high quality real estate projects and operators R
Slide 17: 3. Capital Raising
360 Capital For personal use only G r o u p 3. Capital Raising 17 I TOT April 2017 Capital Raising Presentation 360 Capital Total Return Fund
Slide 18: Sources and applications
Sources and applications 360 Capital G r o u p • $74.0m for investment in 360CPEREF and $5.0m allocation to mezzanine finance transactions For personal use only • Capital raising at $1.15 per Stapled Unit to be structured as follows: o Institutional Placement of $5.3m o 1 for 1 Entitlement Offer to
Slide 19: Entitlement Offer details
Entitlement Offer details 360 Capital G r o u p • 1 for 1 non-renounceable Entitlement Offer resulting in the issuance of 30.7m New Securities to Eligible For personal use only Unitholders, raising $35.3m1. The Entitlement Offer is comprised of the following components: Entitlement Offer o an accele
Slide 20: Indicative capital raising timetable
Indicative capital raising timetable 360 Capital G r o u p Enter trading halt Monday, 10 April 2017 For personal use only Announcement of Institutional Placement, Institutional Entitlement Offer and Retail Entitlement Offer Tuesday, 11 April 2017 Trading resumes Thursday, 13 April 2017 Record Date f
Slide 21: 4. Financial Information
360 Capital For personal use only G r o u p 4. Financial Information 21 I TOT April 2017 Capital Raising Presentation 360 Capital Total Return Fund
Slide 22: Pro-forma balance sheet
Pro-forma balance sheet 360 Capital G r o u p TOT pro-forma balance sheet1 360CPEREF pro-forma balance sheet For personal use only Pro-forma 31-Dec-16 Transaction Pro-forma 31-Dec-16 Pro-forma ($m) ($m) (post balance date adj.) adjustments (post Offer) Post Offer Cash 1.5 0.8 2.3 Cash 19.26 Receivab
Slide 23: Forecast operating income statement
Forecast operating income statement 360 Capital G r o u p Transaction For personal use only ($m) FY17 forecast FY17 reforecast adjustments Distribution income – listed 2.9 (1.5)1 1.4 Distribution income – 360CPEREF - 2.22 2.2 Finance investments - - - Finance income - - - Total revenue 2.9 0.7 3.6 M
Slide 24: 5. About TGP – Board, Management and Track Record
360 Capital For personal use only G r o u p 5. About TGP – Board, Management and Track Record 24 I TOT April 2017 Capital Raising Presentation 360 Capital Total Return Fund
Slide 25: TOT's manager
TOT’s manager 360 Capital G r o u p For personal use only Market cap. ~$200m Free cash1 • Founded in 2006 as an Australian property investment and funds management company ~$140m • Focused solely on Australian property markets • Philosophy of co-investing alongside our partners/investors • Debt free
Slide 26: 360 Capital board of directors
360 Capital board of directors 360 Capital G r o u p DAVID VAN AANHOLT, CHAIRMAN & INDEPENDENT DIRECTOR For personal use only David has over 25 years of experience in the property and funds management industry. Prior to establishing his own property group in 2007, David was the Chief Executive Offic
Slide 27: Key management team
Key management team 360 Capital G r o u p TONY PITT, MANAGING DIRECTOR For personal use only Tony is a founding Director of 360 Capital and has worked in the property and property funds management industries for over 15 years. As Managing Director, Tony is responsible for the performance of 360 Capi
Slide 28: Track record – years of corporate real estate
Track record – 10 years of corporate real estate 360 Capital G r o u p 2006 2007 2009 2010 2011 For personal use only Established 360 Capital Group in 2006 $30.0m $10.5m $9.0m $12.5m $5.5m $2.0m ($1.1bn FUM) Sale of 78% of 360 Capital Acquisition and disposal Sale of 1% of MREIT Acquisition of Marin
Slide 29: Case study: 360 Capital Industrial Fund
Case study: 360 Capital Industrial Fund (ASX:CIP) 360 Capital G r o u p Co-investment returns to TGP For personal use only • Total purchases: $59.2m (2010-15) • Sold: $82.9m (2016) • Distributions over 6 years: $21.2m Co-investment IRR p.a. $0.22 $0.20 23% $0.18 $0.16 Acquired as part of Becton Po
Slide 30: Case study: 360 Capital Office Fund
Case study: 360 Capital Office Fund (ASX:CUA) 360 Capital G r o u p Co-investment returns to TGP For personal use only • Total purchases: $37.2m (2012-13) • Sold: $47.4m (2016) • Distributions over 6 years: $13.6m $0.20 $0.15 $0.10 Acquired as part of Becton Portfolio in 2010 $0.05 Co-investment I
Slide 31: Case study: St Georges Terrace Property Trust
Case study: 360 Capital 111 St Georges Terrace Property Trust 360 Capital G r o u p Co-investment returns to TGP For personal use only • Total purchases: $21.0m (2010-15) • Sold: $30.5m (2016) • Distributions over 6 years: $14.4m $0.35 $0.25 Co-investment IRR p.a. $0.15 FY11 FY12 FY13 FY14 FY15 Dist
Slide 32: Case study: Subiaco Square Shopping Centre Trust
Case study: 360 Capital Subiaco Square Shopping Centre Trust 360 Capital G r o u p Co-investment returns to TGP For personal use only • Total purchases: $4.5m (2010-15) • Sold: $9.4m (2016) • Distributions over 6 years: $1.7m ` $0.15 Co-investment IRR p.a. $0.10 $0.05 22% $0 FY11 FY12 FY13 FY14 FY15
Slide 33: Case study: Takeover of Australian Industrial REIT
Case study: Takeover of Australian Industrial REIT (ASX:ANI) 360 Capital G r o u p ANI run sheet For personal use only Gross assets • TGP approached ANI management with proposal to buy $330m management rights – November 2014 (proposal was rejected by ANI) • TGP bought 12.9% stake in December 2014 ($
Slide 34: Appendix A: Key Risks
360 Capital For personal use only G r o u p Appendix A: Key Risks 34 I TOT April 2017 Capital Raising Presentation 360 Capital Total Return Fund
Slide 35: Key risks (cont'd)
Key risks (cont’d) 360 Capital G r o u p For personal use only • Capital values: The ongoing value of an investment is influenced by changes in market conditions including supply, demand, capitalisation rates and rentals. There is no guarantee that an investment will achieve a capital gain on its sa
Slide 36: Key risks (cont'd)
Key risks (cont’d) 360 Capital G r o u p For personal use only • Due diligence: Some investments may be made based on limited due diligence conducted only in respect of publicly available information. This may increase the risk of individual investments and could lead to material adverse effects on
Slide 37: Key risks (cont'd)
Key risks (cont’d) 360 Capital G r o u p • Dilution: Future capital raisings and equity-funded acquisitions made by the Fund may dilute the holdings of Stapled For personal use only Unitholders. In the normal course of managing the Fund the Responsible Entity is seeking to increase distribution inco
Slide 38: Key risks (cont'd)
Key risks (cont’d) 360 Capital G r o u p For personal use only • Economy and market conditions: There is the risk that changes in economic and market conditions may affect asset returns and values and may decrease the Unit price. The overall performance of Units may be affected by changing economic
Slide 39: Appendix B: Glossary
360 Capital For personal use only G r o u p Appendix B: Glossary 39 I TOT April 2017 Capital Raising Presentation 360 Capital Total Return Fund
Slide 40: Glossary
Key risks (cont’d) 360 Capital G r o u p Term Definition For personal use only 360 Capital Group means TGP and each of its subsidiaries 360CPEREF means 360 Capital 2017 Private Equity Real Estate Fund 360 Capital 2017 PERE Pty Limited means the investment manager of 360CPEREF, 360 Capital 2017 PERE
Slide 41: Glossary
Key risks (cont’d) 360 Capital G r o u p Term Definition For personal use only Institutional Placement means the placement to Institutional Investors to raise $5.3m as described in this presentation Investment Manager means the investment manager of 360CPEREF, 360 Capital 2017 PERE Pty Limited IPO m
Slide 42: Glossary
Key risks (cont’d) 360 Capital G r o u p Term Definition For personal use only means the stapled entity comprising 360 Capital Group Limited (ACN 113 569 136) and 360 Capital TGP Investment Trust (ARSN 104 552 598) (ASX: TGP) means the stapled entity comprising 360 Capital Total Return Passive Fund
360 Capital Total Return Fund — Investor Presentation (April 2017) on 6ix