First Mortgage Investment
This strategy focuses on the provision of first mortgage loans, backed by Australian property. There are many different factors that go into measuring the risk of a transaction, however for like-for-like loans a common measure is what is known as a Loan-To-Value Ratio (LVR); the lower the ratio the more secure the investment.
Dorado will assess many aspects of a development to determine an appropriate LVR for that specific loan; generally speaking a first mortgage loan LVR will range between 45% and 65%. First Mortgage investments will typically have 6 - 12 month terms, and generate returns of between 8% and 10% p.a., depending on the loan.
Subordinate Finance Investment
This strategy focuses on the provision of subordinate debt and structured equity investments to development projects in Australia. These investments are considered higher risk than a first mortgage investment, as its rights and security are generally subordinated to those of the first mortgage lender, with the LVR ranging up to 75-80%.
These types of investments will typically run over 12 - 24 months, and generate returns of between 14% and 25% p.a., depending on the security package and LVR of the investment.
Direct Investment
This strategy focuses on acquiring undervalued property in strategic locations around Australia. The Direct Investment team place a strong emphasis on downside protection and superior management of assets to deliver strong absolute returns through a combination of income and capital growth.
Dorado invests across the spectrum from core strategies (low risk-profile with long duration, secure cash flows) to value-add (higher risk with the potential to generate outsized returns through active management including refurbishment, re-leasing and change of use). Direct investments typically run over 5 - 7 years, and generate returns of 10% - 15% p.a.
