DomaCom has announced its partnership with La Trobe Financial, under which investors will be able to use A$50 million credit facility.
The initial facility provided by La Trobe would allow investors to buy approximately A$100 million of leveraged property through the DomaCom fund, the firm said.
The facility would additionally provide up to 60 per cent leverage for investors and self-managed super funds (SMSFs) at 5.99 per cent per annum.
According to DomaCom, the opportunity for investors to lend when purchasing investment property would help it triple its funds under management to $150 million.
“This is a significant development for the Australia property investment market as financial advisers can now leverage their clients’ investment properties at a click of a button,” DomaCom’s chief executive, Arthur Naoumidis, said.
“The availability of this initial $50 million debt facility has cleared the remaining obstacle for DomaCom. After many patient years we are now well placed to take our platform to financial advisers and the SMSF sector, with available debt and legacy certainty.”
Chris Andrews, La Trobe’s chief investment officer, said that the company specialised in SMSF lending and currently expected that SMSFs had a significant influence in the overall growth of the $2.3 trillion Australian superannuation industry.
Andrews added that SMSF assets grew by $319.7 billion (55 per cent) in the five years to December, 2018, with the industry now standing at $726.46 billion in assets under management (AUM).
“So with this in mind, we can expect this sector to continue to have an important role in asset allocation debates in the retirement industry,” he said.
“The majority of the 587,092 SMSFs are formed by self-employed business people who are astute and understand investment risk - having often run their own businesses.
“They have a bias towards asset classes with low volatility and assets that have longer term (10+ year) investment horizons and to this end property is eminently recognisable and understandable for SMSF investors. Currently there is only $42.85 billion of limited recourse borrowings (5.9% of total SMSF Assets).”