Secured Mortgage Income Fund Are your investments secured and - - PowerPoint PPT Presentation

Secured Mortgage Income Fund

Are your investments secured and predictable?

Fund Mandate

u To provide investors with consistent monthly income

secured by real property mortgages that are prudently written to safeguard capital.

u Statesman Capital and its affiliates will always have at

least $3 million of their own capital invested directly along with you thereby ensuring a continued alignment

• f our interests with yours.

Fund Description

u The Statesman Capital Secured Mortgage Income Fund

(“SMIF”) is a pool of capital that provides loans secured by short-term first and second mortgages of residential and commercial real estate.

u The SMIF generates

predictable and secured monthly income because its borrowers make monthly interest payments which we distribute to you on a monthly basis.

BEST RISKY LESS RISKY WORST

Risk (%) 10 30 100 3 6 9 12 ? Potential Return (%) SMIF

GOC GIC Aggressive Growth Money Markets Bond Funds Balanced Funds Large Cap Stock Funds Derivatives

Fund Objectives

u High yields: The SMIF outperforms bonds and GICs.

We target net yields in the range of 6% to 7% per year.

u Security: Unlike stocks and bonds, the SMIF's income

and capital is secured by real property. The loan portfolio is also diversified across several markets and types of mortgages.

u Predictable income: We distribute income monthly.

Fund Objectives

u Liquidity: You may access your capital early in the

event you need it*; your investment is not tied to the maturity date of individual mortgages owned by the SMIF.

u Wealth preservation: Mortgages can preserve your

wealth because they have a low correlation with traditional assets such as volatile stocks and bonds.

u Low volatility: Our mortgages are short term (typically

6 to 18 months) which acts as a hedge against interest- rate risk and real estate market conditions.

* Typical investment term is 1 year minimum, see Redemp6on Sec6on of LP Agreement for full details

What We Do: Statesman Capital

u Statesman Capital underwrites and manages all of the

mortgages in the SMIF.

u Statesman Capital and its affiliates have been involved

in real estate development, management, construction and business enterprises for over 30 years. Our extensive real estate and business experience provides us with a thorough understanding of the markets into which we lend.

What We Do: Statesman Capital

u Over the past 20 years we have been directly and

actively involved in over $150 million of real estate development, investment and financing transactions. More importantly, each was and remains profitable for

• urselves and our investors.

u Statesman and its affiliates currently administer

approximately $20 million of first and second mortgage loans and development financing.

Fund Performance

* 2011 returns include the first 10 months as a syndicate and not a Limited Partnership ** 2014 results and onward assume par6cipa6on in the Distribu6on Reinvestment Plan *** Statesman Data is net of fees and Annualized, as fund started in 2011 **** All Data (other than SMIF) provided by MoneyCentral.com

• 15
• 10
• 5

5 10 15 20 25

2011* 2012 2013 2014 2015 2016 SMIF 1 YR GIC 1 YR GOC Bond S&P/TSX

The SMIF delivered predictable and consistent net returns of 8.42%, 8.43% , 8.54%, 7.84%, 6.87% and 6.78% from 2011 to 2016, respectively

Fund Performance

* 2011 returns include the first 10 months as a syndicate and not a Limited Partnership ** 2014 results and onward assume par6cipa6on in the Distribu6on Reinvestment Plan *** Statesman Data is net of fees and Annualized, as fund started in 2011 **** All Data (other than SMIF) provided by MoneyCentral.com

$- $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 $160,000 $180,000

2010 2011* 2012 2013 2014 2015 2016 SMIF 1 YR GIC 1 YR GOC Bond S&P/TSX

Value of $100,000 invested in SMIF, GIC, GOC Bond and S&P/TSX

Fund Distribution

u The fund distributes income every

month based on 5% per annum (0.4167 cents per unit per month), with 100% of the balance distributed by way of a top-up upon completion of the annual audit.

u The top-up is based on a weighted average return

to Unitholders. The top-up shown in the table (next page) is an estimate of the average top-up distribution paid. Unitholders invested less than a full one year period will receive a prorated allocation.

a $100,000 investment in the SMIF currently yields $416.67 per month. In 2016, you would have received an annual top-up payment of $1,780.00 given the net annualized return of 6.78%.

INVESTMENT EXAMPLE

Fund Distribution (per Unit)

Year January February March April May June July August September October November December Total Monthly Top Up Total Annual 2011* .6¢ .6¢ .6¢ .6¢ .6¢ .6¢ .6¢ .6¢ .6¢ .6¢ .6¢ .6¢ 7.2¢ 1.20¢ 8.42¢ 2012 .6¢ .6¢ .6¢ .6¢ .6¢ .6¢ .6¢ .6¢ .6¢ .6¢ .6¢ .6¢ 7.2¢ 1.20¢ 8.42¢ 2013 .6¢ .6¢ .6¢ .6¢ .6¢ .6¢ .6¢ .6¢ .6¢ .6¢ .6¢ .6¢ 7.2¢ 1.34¢ 8.54¢ 2014 .6¢ .6¢ .6¢ .6¢ .6¢ .6¢ .6¢ .6¢ .6¢ .6¢ .6¢ .6¢ 7.2¢ 0.64¢ 7.84¢ 2015 .5¢ .5¢ .5¢ .5¢ .5¢ .5¢ .5¢ .5¢ .5¢ .5¢ .5¢ .5¢ 6.0¢ 1.84¢ 6.87¢ 2016 .416¢ .416¢ .416¢ .416¢ .416¢ .416¢ .416¢ .416¢ .416¢ .416¢ .416¢ .416¢ 5.0¢ 1.78¢ 6.78¢ 2017 .416¢ .416¢ .416¢ .416¢ .416¢ .416¢ .416¢ .416¢ .416¢ .416¢ .416¢ .416¢ 5.0¢ 1.50¢ 6.50¢

All figures based on proforma of fund payment schedule, as detailed in this presenta6on. * Prior to November 2011, the fund operated as a syndica6on. ** 2017 November – December are predic6ons *** Beginning in 2014, Total Annual Return is based on par6cipa6on in the Distribu6on Reinvestment Plan

Fund Recent Transactions

• $1,550,000 loan secured by a first mortgage on a building

site in Vancouver which is to developed into 2 strata-titled townhouse units. Monthly interest payments.

• $625,000 loan secured by a first mortgage on an existing

commercial strata unit and residential strata unit in Victoria. Monthly interest payments.

• $1,300,000 loan secured by a first mortgage on an existing

single family house in Vancouver which is being purchased. Monthly interest payments.

• $575,000 construction loan secured by a first mortgage on a

new single family house in Duncan. Interest payments received from an interest reserve.

Fund Recent Transactions

• $1,080,000 loan secured a by a first mortgage on a new

townhouse in Burnaby which is being purchased. Monthly interest payments.

• $1,400,000 loan secured by a first mortgage on a residential

subdivision in South Surrey. Monthly interest payments.

• $625,000 loan secured by a first mortgage on an existing

apartment building in Nanaimo which is being purchased. Monthly interest payments.

• $435,000 construction loan secured by a first mortgage on a

new single family house in Victoria. Interest payments received from an interest reserve.

Fund Recent Transactions

• $200,000 loan secured by an inter alia second mortgage on 2

existing single family houses in North Vancouver. Monthly interest payments.

• $970,000 loan secured by a first mortgage on an existing

house in West Vancouver which is being purchased and

• renovated. Monthly interest payments.
• $1,400,000 construction loan secured by a first mortgage on

a new single family house in Vancouver. Interest payments received from an interest reserve.

• $1,670,000 construction loan secured by a first mortgage on

a new single family house in Vancouver. Interest payments received from an interest reserve.

About Us – Daniel Lipetz

u

Daniel Lipetz's daily responsibilities at Statesman Capital include researching, negotiating and approving all new loans. Over the past fifteen years, Mr. Lipetz has structured and managed a variety of real estate financings, acquisitions and dispositions. One of Mr. Lipetz's notable transactions was the purchase, development planning, subdivision and subsequent sale of a 17.5 acre portion of the 43 acre Canfor Eburne Saw Mill site in Vancouver, BC to the Greater Vancouver Transportation Authority.

u

• Mr. Lipetz is a graduate of the University of British Columbia with a

Bachelor of Laws and also studied at the UBC Faculty of Commerce, Department of Urban Land Economics. Mr. Lipetz practiced income tax litigation with McCarthy Tetrault prior to embarking on his business career.

About Us – Christopher Kape

u

Christopher Kape’s daily responsibilities at Statesman Capital include all aspects of regulatory compliance, investor communications, fund raising and maintenance of subscriber

• records. Over the past 20 years, Mr. Kape has been actively

involved in numerous private and publicly traded businesses. As a result, and as testimony to his track record, Mr. Kape maintains numerous officer and director positions with private and public firms engaged in a cross section of industries.

u

• Mr. Kape holds a Diplome d’Etudes Collegiales in Commerce from

Marianopolis College, a Bachelor of Arts in Administrative and Commercial Studies from the University of Western Ontario and a Master’s in Business Administration from the John Molson School of

• Business. He further holds securities designations such as the

Canadian Securities Course, Exempt Market Products Course, Options Licensing Course, Officers’, Partners’, and Directors’ Course and Conduct and Practices.

About Us

u

Statesman Capital employs an additional staff of 4 experienced back

• ffice personnel who are responsible for administrative, sales and

mortgage brokering functions.

Fund Facts

Managed By Statesman Capital Corpora6on Asset Class Mortgage Fund Incep6on Date November 2011 Net Asset Value $1 per Limited Partnership Unit Purchase $1 per Limited Partnership Unit. Closings may occur from 6me to 6me as subscrip6ons are received Minimum Investment 50,000 Units ($50,000) Redemp6on Rights Redemp6on is available on demand (with 60 days no6ce) subject to a penalty of 2% during the first 12 months invested. See Limited Partnership Agreement for full details of Redemp6on Rights Tax Consequence Distribu6ons are taxed as interest income from CDN sources Management Fee The manager receives a monthly asset management fee of 1/12

• f 1.0% of the average monthly capital plus an incen6ve fee of

10% of the SMIF's net income (plus applicable sales taxes)

Contact Us

For further information please contact: 304- 2902 West Broadway Vancouver, BC V6K 2G8 www.statesmancapital.ca facebook.com/StatesmanCap @StatesmanCap Christopher Kape Phone: 778 688 9194 Fax: 604 608 5570 Email: ckape@statesmancapital.ca Daniel Lipetz Phone: 604 230 1012 Fax: 604 734 7726 Email: dlipetz@statesmancapital.ca

Disclaimer

This presentation does not constitute an offer to sell or a solicitation of an offer to purchase securities of Statesman Capital Secured Mortgage Income Fund Limited Partnership (the SMIF”) and is qualified entirely by the information contained in the limited partnership agreement relating to the SMIF and the management agreement between the SMIF and Statesman Capital Corporation. The information in this presentation is confidential and may be used by the recipient for the sole purpose of considering an investment in the SMIF. By accepting these materials, the recipient agrees with the terms of this disclaimer and agrees not to reproduce or distribute these materials to any other person except for the recipient’s professional advisors. This presentation contains forward-looking statements within the meaning of applicable securities laws. For this purpose, any statements in this presentation that are not statements of historical fact may be deemed to be forward looking statements. Without limitation, the words “expects”, “anticipates”, “intends”, “estimates”, “projects”, and similar expressions are intended to identify forward looking statements. Forward looking statements are based on estimates and assumptions made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors that we believe are appropriate in the circumstances. The SMIF is subject to risks and uncertainties which may cause the actual results, performance or achievements of the SMIF to be materially different from historical results or any future results, performance or achievements expressed or implied in any forward-looking statements. Such risk factors include, but are not limited to, risks associated with interest rates, borrower liquidity and other risks associated with mortgage ownership and mortgage lending, availability and terms

• f debt and equity financing, no market for the transfer of the units of the SMIF and restrictions on transfer, limited

redemption rights, potential conflicts of interest, reliance on key personnel, changes in legislation, changes in taxes and potential dilution. There can be no assurance that actual results will be consistent with historical results or any forward-looking statement and the SMIF assumes no obligation to update or revise such forward-looking statements to reflect actual events or new circumstances.