Aura Core Income Fund by Montgomery

For many Australian investors today, small steel fabricators can be just as interesting as BHP. Here’s why. 

These Aussie businesses are not afraid of hard work. When customers need fabricated steel for residential and industrial construction, they don’t sit around talking, they start cutting and loading.  

I love that. I also love their financials because, often, the only thing holding them back is working capital. The cash flow to buy more raw materials and meet growing demand.

This steel fab outfit I know is just one of thousands of Aussie businesses Montgomery investors are able to support, while receiving a monthly return, through the Aura Core Income Fund. 

The fund generates monthly cash income, while providing the short-term financing many Australian enterprises need.

Like any investment, no one can guarantee performance, but I can tell you the older fund that the Aura Private Credit team manages has generated only positive returns every month, for over five years. From its inception in August 2017, to 28 February 2023, it has delivered a 9.52% per annum net return to investors, after expenses and assuming reinvestment of distributions11.

And they’re bringing a similar discipline and process to the Aura Core Income Fund. The set aim of the Aura Core Income Fund is to achieve a target return of +3.5%–5.5% per annum above the Reserve Bank of Australia’s Cash Rate; all net of fees and costs, right through the economic cycle. 

I am personally enthusiastic about helping smart, hard-working Australian businesses grow, while Aura’s track record and the Core Income Fund’s structure give me comfort.

I believe thousands of Australian businesses could grow faster and support more employment if they could access the working capital they need. Sadly, the banks have been pulling out of financing these businesses. It’s just too expensive for them to assess loans, and they often take too long to process applications.

I know lots of investors are looking to back some serious, hardworking Australian businesses this year. If that includes you, I suggest you – and your trusted adviser – take a look at the Aura Core Income information pack we’ve just released here.

Diversification through private credit, and confidence in Aura in particular, led us to partner with them. It’s part of the commitment to the Australian investor community Montgomery was founded on: to provide sound, risk adjusted, quality-based, investment solutions. And yes, I intend to invest with Aura myself. 

Private credit is well established around the world and has long been the exclusive preserve of high-net-worth individuals and their family offices here in Australia. 

The category is undergoing something of a renaissance here in Australia as private finance providers fill the gap left by the banks.  

Private credit is connecting with new opportunities in the Australian business community. The places where smart, hardworking, skilled hands know how to create value. 

So where are those high-quality, hard-working business leaders today? 

A lot of these leaders are outside the stock market, and they're leading businesses into strong growth. They’re found across all sectors of the economy, steel fabricators, sheet metal manufacturers, high-end food producers, car mechanics, home builders and farm suppliers. And farmers too.

Plenty of these businesses are expanding. And, incidentally, no matter how miserable the narrative of some economists may be—the Australian economy is growing.

The good restaurants are full. Reputable tradies are booked up months in advance. After the floods, fires and an epidemic, there are Australian businesses hiring workers and making plans to grow.

One thing, however, holds many of them back. They simply need finance, often for a very short time, to expand. To buy inventory and raw materials. To repair a harvester. To invest in the IT they need to serve their growing database of customers faster.    

And these companies could expand faster if they were able to secure finance the banks might take six weeks or more to approve. 

And as they approach their growth tipping point, I know many investors, and you may be one, are at a point of frustration. 

Financial crises, fires, floods and pandemics forced interest rates lower, and undermined cash income returns. Now, even as rates rise, the full extent of the increases aren’t being passed on to investors desperate for income. 

With frustrated investors on the one hand, and a band of Aussie businesses who need short-term finance on the other — just as banks pull back on their participation — I see two unmet needs. 

It’s a need that Aura Core Income Fund is ready to meet. The fund may solve several challenges for Australian businesses. All while helping Australian investors gain access to income returns. 

There are literally thousands of these businesses, many are ready to expand, and I will be sharing the stories of some of them in the weeks ahead. 

You’ll learn more about this investment opportunity, and the careful thinking behind it in the Aura Core Income information document here.

11 Past performance is not a reliable indicator of future performance.

You should read the relevant Product Disclosure Statement (PDS) or Information Memorandum (IM) before deciding to acquire any investment products.

Past performance is not an indicator of future performance. Returns are not guaranteed and so the value of an investment may rise or fall.

This information is provided by Montgomery Investment Management Pty Ltd (ACN 139 161 701 | AFSL 354564) (Montgomery) as authorised distributor of the Aura Core Income Fund (ARSN 658 462 652) (Fund). As authorised distributor, Montgomery is entitled to earn distribution fees paid by the investment manager and, subject to certain conditions being met, may be issued equity in the investment manager or entities associated with the investment manager.

The Aura Core Income Fund (ARSN 658 462 652)(Fund) is issued by One Managed Investment Funds Limited (ACN 117 400 987 | AFSL 297042) (OMIFL) as responsible entity for the Fund. Aura Credit Holdings Pty Ltd (ACN 656 261 200) (ACH) is the investment manager of the Fund and operates as a Corporate Authorised Representative (CAR 1297296) of Aura Capital Pty Ltd (ACN 143 700 887 | AFSL 366230). 

You should obtain and carefully consider the Product Disclosure Statement (PDS) and Target Market Determination (TMD) for the Aura Core Income Fund before making any decision about whether to acquire or continue to hold an interest in the Fund. Applications for units in the Fund can only be made through a valid paper or online application form accompanying the PDS. The PDS, TMD, continuous disclosure notices and relevant application form may be obtained from www.oneinvestment.com.au/auracoreincomefund or from Montgomery.

The Aura High Yield SME Fund is an unregistered managed investment scheme for wholesale clients only and is issued under an Information Memorandum by Aura Funds Management Pty Ltd (ABN 96 607 158 814, Authorised Representative No. 1233893 of Aura Capital Pty Ltd AFSL No. 366 230, ABN 48 143 700 887).

Any financial product advice given is of a general nature only. The information has been provided without taking into account the investment objectives, financial situation or needs of any particular investor. Therefore, before acting on the information contained in this report you should seek professional advice and consider whether the information is appropriate in light of your objectives, financial situation and needs.  

Montgomery, ACH and OMIFL do not guarantee the performance of the Fund, the repayment of any capital or any rate of return. Investing in any financial product is subject to investment risk including possible loss. Past performance is not a reliable indicator of future performance. Information in this report may be based on information provided by third parties that may not have been verified.