Private Credit — Residential Construction
The Royal Oak Preferred Equity Unit Trust 1
RealisedA closed-ended, single-asset fund providing a preferred-equity investment in a medium-density residential development in the Perth metropolitan area. The twelve-month facility was repaid in ten months, delivering a realised 15.19% return on equity — an annualised IRR of 18.49% p.a.
Fund overview
The Royal Oak Preferred Equity Unit Trust 1 provided a preferred-equity position supporting the construction of a medium-density residential development in the Perth metropolitan area — private credit structured to sit between the senior facility and the developer's equity, with capital protection engineered into the position ahead of upside.
The facility ran to a twelve-month term and was repaid in ten — the outcome private-credit investors most want to see: capital returned early, in full, with the return delivered as underwritten.
Consistent with the nature of a private-credit facility, the borrower and the specific project remain confidential.
Strategy & thesis
Residential construction credit rewards lenders who can price delivery risk from direct development experience. The position was underwritten with a developer's understanding of cost, program and completion risk — and structured so the exit did not depend on a perfect market.
Early repayment is the quiet proof of underwriting discipline: the project performed, the sponsor refinanced as expected, and investors' capital came back ahead of schedule.
Illustrative imagery
The images below are illustrative of the asset class only. They do not depict this trust's underlying project, which remains confidential.
The asset
- Investment type
- Private credit — preferred equity
- Asset class
- Medium-density residential development
- Location
- Perth metropolitan area
- Facility term
- 12 months
- Repaid
- In 10 months — two months early
- Confidentiality
- The borrower and specific project remain confidential, consistent with the nature of the facility
Term & structure
- Structure
- Closed-ended, single-asset wholesale unit trust, offered by Information Memorandum
- Term
- 12-month loan term, repaid in 10 months
- Equity raised
- $3.3 million
- Minimum investment
- $250,000 AUD
- Eligibility
- Wholesale, sophisticated and professional investors only
Returns
Private Credit — Residential Construction
Realised15.19%
Realised ROE
Return on equity over the life of the investment — a ten-month facility, not an annual rate.
Private Credit — Residential Construction
Realised18.49% p.a.
Realised IRR
The annualised equivalent of the 15.19% return on equity delivered over ten months.
Royal Oak Asset Management Pty Ltd (CAR No. 1297058) and Alex Gismondi (AR No. 1297050) are authorised representatives of Wholesale Securities Pty Ltd (ABN 89 601 790 470, AFSL No. 466877).