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    Pallas Short Term Fund

    Australia & New Zealand

    Target Return

    4.75% + BBSW

    Minimum

    $100,000

    Term

    Open-ended

    Executive Summary

    The Pallas Short Term Fund is an open-ended Australian wholesale unit trust that funds a warehouse facility investing in short-term commercial real estate loans, each secured by a registered first mortgage over property in Australia or New Zealand. Income is paid monthly in arrears at 4.75% per annum above the 1-month BBSW, a rate the Trustee may vary on three months' written notice. Every investment must involve an underlying loan expiring within eight months of the Fund making the investment, or an irrevocable commitment from a third party acceptable to the Trustee to purchase the investment within eight months. Units are redeemable on the last Business Day of any month on three months' written notice. If the Trustee notifies a Unitholder that it is unable to redeem Units on a valid notice, or that the redemption would prejudice other Unitholders or the operation of the Fund, those Units are not redeemed on that notice and the distribution rate on them rises to 10% per annum until they are redeemed; the Trustee may also suspend redemptions in certain circumstances. The Fund invests through lending vehicles owned, controlled or managed by the Pallas Group, and those vehicles may lend to related parties of the Pallas Group; as at 31 March 2026 approximately 90.8% of the Fund's funds under management were in related-party loans. Returns and distributions are not guaranteed. Wholesale investors only. Issued by Pallas Funds Pty. Limited (AFSL 473475) as trustee, managed by Pallas Capital Pty. Limited. The platform minimum investment is $100,000; the Information Memorandum does not state a minimum subscription.

    Investment Highlights

    • Income distribution rate of 4.75% per annum above the 1-month BBSW, paid monthly in arrears within the first 10 Business Days of the following month. The Trustee may vary the rate at its absolute discretion on three months' prior written notice. Not guaranteed.
    • Every underlying loan is secured by a registered first mortgage over real property in Australia or New Zealand, and is generally supported by personal guarantees from the sponsors behind the borrower. The Fund holds these loans indirectly, through SPV Lenders and Pool Lenders.
    • Short-term by design: the Fund only makes an investment where the underlying loan expires within eight months of the Fund making that investment, or a third party acceptable to the Trustee has irrevocably committed to purchase the investment from the Fund within eight months.
    • Qualifying loans are limited to a maximum loan-to-value ratio of 65% (for a construction loan, measured on the as-if-completed value of the project excluding GST), or 70% for investment loans secured over commercial, retail or industrial property that does or could produce income in its current form, supported by a valuation from a Pallas Capital panel valuer dated no more than three months before the lender commits to the loan, with a loan term of no more than 24 months.
    • Open-ended fund with no fixed end date. Units are redeemable on the last Business Day of any month once at least three months' written notice has been given. Redemptions are generally funded only from monies the Fund receives on its investments. If the Trustee notifies a Unitholder that it is unable to redeem Units on a valid notice, or that the redemption would prejudice other Unitholders or the operation of the Fund, those Units are not redeemed on that notice and the distribution rate on them rises to 10% per annum until they are redeemed; the Trustee may also suspend redemptions in certain circumstances.
    • Initial Target Issue Size of $150 million (150,000,000 Units of $1.00 each). The Fund is open-ended and the Trustee may increase or decrease the Issue Size at any time. As at 31 March 2026 the Fund had $98.4 million on issue across 14 investments.
    • Diversification limits: the largest single investment is capped at $10 million or 35% of the Issue Size, whichever is greater; where a single investment exceeds $5 million or 25% of the Issue Size, whichever is greater, the Fund must sell down part of it within 120 days to bring it within that limit. Investments in Pool Lenders that maintain substantially similar diversification requirements are exempt. These limits apply once the Issue Size reaches $25 million.
    • The Fund invests through SPV Lenders and Pool Lenders owned, controlled or managed by the Pallas Group, and may invest where a loan is made to a related party of the Pallas Group, including Fortis Development Group, on arm's length terms guaranteed by that related party. As at 31 March 2026, related-party loans represented approximately 90.8% of the Fund's funds under management.
    • The IM states the Manager is typically remunerated in two ways: it charges borrowers an upfront loan establishment fee of 1.0% to 1.5% of the maximum loan value, and it is paid by the Fund a management fee equal to the balance of the Fund's net income remaining after all Unitholder distributions, monthly in arrears. No distributions of any kind are made to Pallas Capital while any amount due on a Unit is in arrears or while the Fund is in breach of a material provision of the Trust Deed or the Information Memorandum.
    • Issued by Pallas Funds Pty. Limited (AFSL 473475) as trustee, with Pallas Capital Pty. Limited (ACN 616 130 913), its Corporate Authorised Representative (No. 001257625), as Manager. Wholesale investors only. The Fund is an unregistered managed investment scheme; the Information Memorandum is not a prospectus or product disclosure statement, and the same disclosures and levels of investor protection as under a retail offer are not available.

    Source: Pallas Short Term Fund Information Memorandum (31 October 2022); portfolio figures from the Performance Update for the quarter ending 31 March 2026. Minimum investment is platform-set; the IM does not state a minimum subscription.

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    Licence Notice: Managed Investment Scheme (AFSL 416956)

    This is general advice only. Content relating to this managed investment scheme is prepared by Figure 8 Capital Pty Ltd ABN 49 681 113 100 (operating Investing Platform), a Corporate Authorised Representative (No. 001311723) of Alpha Node Advisors Pty Ltd (ACN 154 320 000, AFSL 416956), and is available exclusively to wholesale clients and sophisticated investors within the meaning of sections 761G and 761GA of the Corporations Act 2001 (Cth). Investing Platform receives an upfront fee from the issuer on amounts invested, as well as an ongoing fee for the duration of your investment. These fees are paid by the issuer and are not charged to you directly. Read the Website Disclaimer for the full dual-licence explanation.