Augusta collects $2.7 million from syndication, fund offers

Thursday 31st March 2016

Augusta Capital says it generated fees totalling $2.7 million after successfully completing separate syndication and property fund offers.

The Auckland-based company's $17 million syndicate to buy and redevelop Oji Fibre Solutions' Penrose premises was fully subscribed, meaning Augusta didn't need to take up any underwritten amount, it said in a statement. Separately, it closed a $60 million offer for Augusta Value Add Fund No 1, housing property assets worth $112 million, taking up $9.51 million. Augusta plans to onsell $3.51 million of that stake to investors who hadn't been able to meet the April 1 settlement date, due to anti-money laundering due diligence or being unable to transfer funds.

Augusta receives offeror and underwriting fees of about $1.4 million from the Oji syndication deal, plus a further $300,000 project management fee payable once the site is developed, while the fees generated from the Value Add fund's offer and underwrite amount to almost $1.4 million. Augusta will also attract an annual management fee of 1.25 percent from the fund, worth $1.4 million at the fund's current assets, reducing by 25 basis points on the sale of each property, with a base management fee of $400,000, plus a performance fee of 20 percent when the pre-tax internal rate of return beats an annual 8 percent.

Funds management generated net revenue of about $4.6 million in Augusta's first half, ahead of the $3.3 million from investment property. The company diversified into funds management away from pure property ownership as a means to generate more income from its investments.

The shares rose 1 percent to $1.04 and have gained 3 percent this year.

(BusinessDesk)

BusinessDesk.co.nz

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