Additonal Benefits
We strive to provide an expanding list of additional benefits to our fund investors, including:
Investment Decisions & Management
While many SMVCF investors might want to make many of the investment decisions we provide tools and analysis of potential and current investments to share with investors, supporting their own processes.
Reporting
Our internal monitoring and extensive investment analysis is compiled into our regular investment reports and deseminated to investors. Lellco separately provides focussed reports into aligned investments of SMVCFs.
SME Equity Platform
Lellco will deliver a dedicated operating platform to SMVCF investors to aid them in their investment decisions, monitoring, and administration.
Fee Structure
We pride ourselves on the simplisity and economic value our fee structure represents to the investor.
Management Fee
Our management fee is broken into two stages;
- managed phase (years 1 to 5 of investment) at 2% per annum; and
- monitored phase (years 6 on) at 1% per annum.
The first 5 years of the managed phase management fees are applied and reserved in the fund at the time of investment settlement and dispersed to the manager as required.
Monitored phase management fee is deducted from the returns of the investments of the fund.
Carried Interest
A carried interest fee is applied to all dividends and capital gains of the investments of the fund, and prior to distribution of returns to investors.
Our carried interest fee is only 10% (or 5% for superannuation investments) of investment returns (meaning investors retain up to 35% more of their investment return), that is 50% to 75% lower than the industry standard 20% carried interest fee.
Investor Limits
While we pride ourselves on our ability to pursue our first objective of “increasing levels of SME investment capital in Australia” there are limitations on the investors we can accept into our funds.
Wholesale Investors
We have found it necessary to limit our funds to only accept investment from ‘Wholesale’ investors.
The determination of a wholesale investor is given in the Corporations Act 2001 section 761G, which regulates fundraising and financial products.
For the definition we recommend you refer to your accountant or the Government’s Moneysmart site, but it includes persons with:
- a gross income of $250,000 or more per year in each of the previous two years, or
- net assets of at least $2.5 million.
Fund Ownership Limits
Another limitation applied by the government scheme is intended to ensure a fund is not utilised solely for the benefit of only one or two parties.
As such, if you seek to make a large investment we may have to restrict the amount of that investment temporarily, but we do have provisions to be able to progressively increase your investment along with the growth of the fund. However, the maximum SMVCF investment into a single fund can be no more than $60M, although we do not restrict the one investor from splitting their SMVCF over two or more funds as those funds become available.
Other Investors
Where we would like to make investment available for even more people to support SME investment, while gaining the many benefits we offer, the compliance cost in doing so renders it impractical for us at this time.