There are a number of risk factors that could impact on the financial performance of the Fund and, accordingly, the Distributions Which Investors are forecast to receive.
The Fund is exposed to general market movements, including, but not limited to, trends in international and domestic tourism money and share markets, fixed income, commodities, real estate and property, which may all be affected by a wide range of factors, some of which may behave irrationally. These events may include changes in economic, fiscal, social, technological, political, legal or accounting conditions, investor confidence and forces majeure.
Neither the performance of the Fund nor the security of your business capital is guaranteed. The investment strategy is to be executed on a best endeavours basis only.
The Manager does not promise that you will earn any return on your investment or that your investment will gain or retain its value. It is impossible in a document of this type to take into account the investment objectives, financial situation and particular needs of each potential investor, or to describe all of the possible risks that could impact your investment. Nothing in this Information Memorandum should be construed as a recommendation by the Manager or any other person concerning an investment in the Fund.
Prospective investors should examine the full content of this Information Memorandum and consult their professional advisors prior to any investment.
Investors should be aware that the Fund is at least a medium term investment. The investment considerations and risks of investment in the Fund are similar to the considerations and risks which would apply in their own right. Investors should be aware that the income to the Fund could be materially influenced by a number of factors, including those outside the control of the Manager.
Major investment considerations and risks include:
- any downturn in the economy in general may slow the growth in tourism spending and the growth in income from the hotels;
- an investment in the Fund should be viewed as an illiquid investment;
- there is no guarantee that a capital gain will be achieved and a capital loss is possible;
- interest rate variations may affect the forecast returns;
- neither the Manager, the Trustee, nor ASIC guarantee in any way the performance of an investment in the Fund or the repayment of any monies subscribed for that purpose;
- Hotel revenue may be affected by changes in tourism patterns, currency, exchange rates or the behaviour of competing hotels;
- the forecast income from an investment in the Fund is partially dependent on the ability of the Operators to run the hotels on a profitable basis;
- any amendments to statutes or regulations adversely affecting the Hotel or the impact of taxes, may affect the value of the Hotel, the distributions from the Fund or the tax position of Investors
- While the Manager is confident of arranging proper insurance for all risks associated with ownership of the Hotels which are normally insured, there is no certainty that such insurance will continue to be available or that premiums will not rise and this may affect the forecast income from the Hotels.