Real Asset Management Healthcare Opportunity Fund
Target Return (IRR)
12-14% p.a.
Minimum
$50,000
Term
4+ years
Executive Summary
The RAM Australia Healthcare Opportunity Fund (ARSN 671 345 252) is a wholesale, open-ended unlisted property fund investing in Australian healthcare real estate. Its Information Memorandum, dated 19 April 2024, records two settled seed assets in Queensland: the Cleveland Medical Hub, an integrated medical hub under development anchored by ASX-listed Ramsay Health Care, and a 20% joint-venture interest in the Nundah Medical Hub, proposed to be anchored by a private hospital operated by iMH. The fund is issued by Equity Trustees Limited as responsible entity and managed by RAM Healthcare Property Investment Management, and is open only to wholesale and sophisticated investors, with a minimum investment of $50,000 and a minimum suggested investment time frame of four or more years.
Investment Highlights
- Target internal rate of return to investors of 12-14% per annum before fees and taxes. Target only, not a forecast, not guaranteed and may be lower. An investment may result in capital loss.
- Target distribution of 4-6% per annum gross of fees after the three-year Investment Period, generally paid quarterly. Returns during that period are expected to be weighted to capital rather than income. Not guaranteed and may not be paid in a given period.
- The fund intends to target Australian healthcare property deriving at least 75% of its income from medical operators, including private hospitals, day surgeries, medical specialists, general practice clinics and allied health operators.
- Two settled seed assets in Queensland as at the Information Memorandum (19 April 2024). Cleveland 5,441 sqm with a proposed estimated on-completion valuation of $56.25 million, Nundah 11,736 sqm and $97.6 million proposed. Combined weighted average lease expiry of approximately 15.9 years. Indicative figures only, not a guarantee.
- Cleveland Medical Hub: a 100%-owned integrated medical hub under development, anchored by ASX-listed Ramsay Health Care, which has pre-committed to a ~1,400 sqm day surgery on a 25-year lease.
- Nundah Medical Hub: a 20% joint-venture interest in an asset purchased for $51.25 million, held alongside the RAM Group founders with 5% and the joint-venture investor with 75%, and proposed to be anchored by a private hospital operated by iMH.
- The joint-venture investor holds significant approval or veto rights over joint-venture investment decisions, can remove and replace the investment manager, and can drag the fund's interest into a sale. The fund is committed to the joint venture for six years.
- Target fund equity of $250 million and target fund size of $600 million including gearing. RAM is committed to limiting gearing to a maximum of 50% on an asset-by-asset basis beyond the Investment Period, but may elect targeted maximums of 60% at portfolio level and 75% on an individual asset through the development phase, and JV assets may be geared to a higher level during the Investment Period.
- Investment management fee of 1.00% per annum of the market value of consolidated gross assets, a responsible entity fee of up to 0.05% per annum, and a performance fee of 20% of excess performance above a benchmark return of 8%. Other fees and costs apply. See Section 7 of the Information Memorandum.
- Liquidity is expected to be limited. Quarterly withdrawals are proposed after the Investment Period, subject to a rolling quarterly cap of 2.5% of the fund's NAV when NAV is $100 million or less, or $2.5 million when NAV exceeds $100 million, and may be scaled back, delayed or suspended.
- Responsible entity and issuer: Equity Trustees Limited (ACN 004 031 298, AFSL 240975). Investment manager: RAM Healthcare Property Investment Management Pty Ltd (ACN 667 163 788), authorised representative of Real Asset Management Pty Ltd (ACN 162 123 408, AFSL 484263).
- Open to wholesale and sophisticated investors only (sections 761G and 761GA of the Corporations Act). Minimum investment $50,000. Minimum suggested investment time frame of 4 or more years.
Source: RAM Australia Healthcare Opportunity Fund Information Memorandum (19 April 2024).
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