PMG Funds Brochure

PMG Funds

For those seeking an investment partner, not just an investment product.

ABOUT PMG FUNDS

For those seeking an investment partner, not just an investment product.

PMG Property Funds Management Limited (PMG) is one of the most established unlisted property funds managers in New Zealand, dedicated to delivering exceptional value to our investors.

PMG is licensed under the Financial Markets Conduct Act 2013 (FMCA) to manage Managed Investment Schemes (excluding managed funds). Our property portfolio includes large scale industrial parks to NABERSNZ-rated office buildings and largeformat retail properties, nationwide.

With a track record of stability, continuity and performance, we value growing relationships as much as we value growing returns. We actively engage in the oversight and strategic direction of our investments, employing handson expertise to enhance value for our investors. Through proactive asset management, diligent risk mitigation, and targeted value-add strategies, we optimise the performance of our portfolio.

PMG is led by a highly experienced Board, chaired by the respected Dr Wayne Beilby and an executive team with more than 100 years’ combined experience in property and finance. Our directors and staff are personally invested in our funds and our business.

Retail Fund Overview

We manage a growing portfolio of strategically selected commercial property funds aimed at retail (public) investors. These properties span industrial, office and large format retail property assets diversified by geography, sector and tenant.

Our retail funds are actively managed to provide regular returns to astute investors. The funds’ have continued to deliver sustainable returns to investors year on year.

As both fund manager and property manager, PMG is focused on supporting the needs and expectations of its tenants and its investors through these changing economic environments.

We’ve long employed a strategy of hedging and conservative borrowing that has managed the funds’ exposure to interest rate fluctuations. This has enabled the funds to be more resilient as interest rates and the economy have changed over time.

At PMG, we believe in the value of diversification. Being able to spread risk across a diverse portfolio, rather than have all your eggs in the one basket, makes it easier to absorb temporary challenges.

Due to the PIE status of PMG’s retail funds, there are potential tax benefits available to investors which can greatly improve the net cash return from an investment in our funds.

For investors taking a long-term view, the potential to pay less tax over time can provide immediate appeal to those considering commercial property relative to other investment classes.

Pacific Property Fund Limited (PPF)

Pacific Property Fund Limited is our largest and most diversified fund by property, region and sector. The Fund delivers regular returns to investors alongside compelling unrealised capital growth.

Fund Strategy

To target sound and well-located industrial, office, and retail properties across major metropolitan and regional centres of New Zealand, that offer sustainable returns.

Goal

To develop a resilient, diversified portfolio of quality industrial, office and retail properties across New Zealand with the robustness of scale that can deliver sustainable cash distribution returns and growth in value over time.

Fund Highlights1

99% Occupancy rate

6.2 YEARS

Weighted average lease term

SECTOR DIVERSE

Industrial, large format retail and office

GEOGRAPHICALLY DIVERSE

Properties in Auckland, Tauranga, Hamilton, Christchurch, Wellington, Palmerston North, Whangārei

Gloucester Street, Christchurch

Dominion Road, Auckland

Arthur Porter Drive, Te Rapa, Hamilton

Truman Lane, Mount Maunganui

Robert St, Whangārei

Spring Street, Tauranga

1Metrics as at 30 June 2023.

RETAIL FUND OVERVIEW

PMG Generation Fund

PMG Generation Fund has swiftly scaled to become our second largest fund, continuing to increase in diversity by property, region and sector, while also having the largest number of tenants across any of our funds.

The PMG Reinvestment Plan, which enables investors to invest their distributions from PMG’s funds into PMG Generation Fund also continues to grow in popularity.

The Fund owns the highest value property in the PMG portfolio, Bethlehem Town Centre in Tauranga, with a dedicated on-site centre manager to ensure tenant and investor interests are actively looked after.

Following a change in the scope of PMG’s Managed Investment Scheme (MIS) licence in 2022, the Fund can also invest in commercial property through investments in other property schemes, enabling more efficient diversification of the Fund to support improved resilience and value for money for PMG investors.

Fund Strategy

To invest and grow a portfolio of strategically selected direct and indirectly held commercial property assets across New Zealand, which provide building, tenant, geographic and sector diversification.

Goal

To provide ease of access to commercial property investment for more New Zealanders, so they can enjoy the benefits of regular income with the potential for capital growth over time.

Fund Highlights1

99% Occupancy rate

5.5 YEARS

Weighted average lease term

SECTOR DIVERSE

Large format retail, industrial and office

Properties in Tauranga, Hamilton, Hastings, Wellington, Christchurch

Jamaica Drive, Wellington

Vickerys Road, Christchurch

Bethlehem Town Centre, Tauranga

Gough Street, Wellington

Bethlehem Town Centre, Tauranga

1Metrics as at 30 June 2023.

RETAIL FUND OVERVIEW

PMG Direct Office Fund

PMG Direct Office Fund, one of our sector-specific funds, owns quality office properties in main metropolitan areas across New Zealand, offering excellent capital growth potential, through proactive management focused on building refurbishment and leasing. In 2022, The fund was the first of PMG’s funds top obtain a NABERSNZ rating for the sustainable nature of our head office tenancy.

Fund Strategy

To target sound, well-located office properties in main metropolitan areas in New Zealand, which provide the opportunity to add value through leasing vacant space and proactive asset management.

Goal

To grow a portfolio of quality office properties delivering sustainable cash distribution returns and growth in value over time.

Fund Highlights1

99% Occupancy rate

4.6 YEARS

Weighted average lease term

SECTOR SPECIFIC Office

GEOGRAPHICALLY DIVERSE

Properties in Auckland, Hamilton, Christchurch

Fanshawe Street, Auckland

Fanshawe Street, Auckland

Tuam Street, Christchurch

Tuam Street, Christchurch

RETAIL FUND OVERVIEW

PMG Direct Childcare Fund

PMG Direct Childcare Fund is another sector-specific fund, which acquires quality early childhood education properties in key strategic locations throughout New Zealand. We closely monitor the performance of each Early Childhood Education (ECE) centre, including child attendance rates and the development of the local area compared to our expectations when developing or purchasing a centre.

Fund Strategy

To hold and grow a portfolio of ECE properties, diversified by region and tenant, to achieve greater resilience of income with scale.

Goal

To create long-term sustainable value for our investors and the best start for the children in our communities, through the provision of quality, fit for-purpose ECE centres across New Zealand.

Fund Highlights1

80% Occupancy rate

11.5 YEARS

Weighted average lease term

SECTOR SPECIFIC ECE

GEOGRAPHICALLY DIVERSE

Properties in Auckland, Hamilton, Wellington, Blenheim, Christchurch, Invercargill

Ormiston Road, Auckland

Merfield Street Auckland

Merfield Street Auckland

Ormiston Road, Auckland

Dynes Road, Christchurch

Spitfire Drive, Blenheim

1Metrics as at 30 June 2023.

Wholesale Fund Overview

We understand that market cycles present unique opportunities. We leverage our in-depth knowledge and experience to identify promising investment opportunities.

Our wholesale funds provide a unique investment opportunity for discerning investors seeking to capitalise on strategic investments in the commercial real estate sector. Through these funds, PMG identifies strategic investment opportunities to unlock hidden value within the commercial property sector. Our expert team conducts extensive due diligence, ensuring that every investment aligns with our rigorous standards for long-term growth and sustainability.

By deploying capital during market downturns towards strategic acquisitions, we aim to generate returns by leveraging our asset and fund management expertise to capitalise on undervalued assets and grow value for investors.

PMG Capital Fund

PMG Capital Fund is a wholesale fund, which facilitates the acquisition of quality real estate into any one of PMG’s funds, while generating a strong return.

Fund Strategy

To facilitate the acquisition of quality real estate by PMG investment funds after adding value, or through providing financing arrangements on a short-term basis.

Goal

To deliver investors an internal rate of return of 10% per annum on capital contributions while enabling other PMG investment funds to raise capital and acquire real estate.

PMG Peregrine Fund

PMG Peregrine Fund makes opportunistic investments in strategically selected commercial property to deliver competitive total returns to investors.

Fund Strategy

Make counter-cyclical investments in strategically selected New Zealand commercial property opportunities capable of delivering competitive total returns to investors through:

• A focus on smart timing of acquisition origination and execution Active investment, project and asset management to grow income and value over time

Goal

Deliver Limited Partners a pre-tax compounded annual rate of return of 12% per annum on Capital Contributions per annum over the Fund’s life.

Special purpose vehicles (SPVs)

As the economic environment changes, we’re seeing several opportunities coming to the market where values have softened, but where our in-house experts have identified potential to add value and achieve long-term growth.

In cases where we identify such opportunities, we use special purpose vehicles (SPVs) and present investors with unique off-market opportunities. PMG uses these SPVs to purchase the property and generate short-term investor returns during the repositioning of the property. Typically, the partnership will then dispose of the property to one of PMG’s retail funds.

The strategy of SPVs is most often to add value through repositioning, greenifying or redevelopment to realise the property’s value.

Our bespoke products are open to eligible wholesale investors only. Learn more about wholesale investing and our special vehicle products at PMG by reaching out to our Investor Relationships team at invest@pmgfunds.co.nz or 0800 219 476.

What our investors say

Not only has PMG provided us with consistent income, but we have not had to worry about managing a thing, and it has allowed us to retire stress free and spend more time doing the things we love like caravanning and biking.

- Karen

Investing in PMG’s funds has supported our lifestyle since we joined Pacific Property Fund and provided us access to high quality commercial property.

- Peter

What stood out for us were their personalities, not just the product. We got a sense that PMG’s philosophy and approach to business was really similar to our own, which helped build our confidence that we could grow with the organisation.

- Craig

I needed an investment that could supplement my income, was tax efficient to preserve my retirement savings as much as possible. It was clear the team had carefully forecast the market and are smart enough to take advantage of opportunities.

- Wayne

Having an in-house property team who know their properties and tenants has made all the difference to the success of our investments over the years.

- Dave

Get in Touch

Contact our Investor Relationships team about current or upcoming investment opportunities.

0800 219 476

invest@pmgfunds.co.nz

Matt McHardy

matt.mchardy@pmgfunds.co.nz

Matt joined PMG in April 2015 to develop the sales and investor relationships team for the business. He has extensive experience in business development and relationship management, finance and compliance after a banking career for BNZ.

Matt holds a Bachelor of Commerce and Administration from Victoria University, and holds a New Zealand Certificate in Financial Services and a New Zealand Certificate in Real Estate. Matt also sits on the board of Enterprise Angels and is a member of the Institute of Directors NZ.

Alongside the wider Investor Relationships Team, Matt has a passion and commitment to ensuring the team provides a best in market service to PMG’s clients and professional partners.

Rory Diver

rory.diver@pmgfunds.co.nz

Rory joined PMG in November 2019 after returning from London where he worked as a Real Estate Fund Accountant for a NYSE listed Asset Manager before joining Lloyds Development Capital as an Investment Data Analyst. He brings considerable financial services experience having previously worked for KPMG as an Auditor and BNZ in Commercial Banking.

Rory is a qualified Chartered Accountant. He completed his Bachelor of Management Studies (Hons) in 2011 and works with his clients to help them achieve their investment goals with PMG.

GM Investor Relationships

Investor Relationships Manager (Upper North Island)

Ben cant Investor Relationships Manager (South Island)

ben.cant@pmgfunds.co.nz

Joining PMG in January 2020, after working at ANZ for four and a half years, Ben attributes much of his business acumen and success in management to the skills he learnt on the field, both coaching and playing semi-professional cricket in NZ and the UK.

Ben has a strong, long-term connection to the Canterbury and Otago regions. He grew up in Dunedin and Oamaru before moving to Christchurch to study a Bachelor of Commerce at Lincoln University, majoring in accounting and minoring in international business.

matt.topham@pmgfunds.co.nz

Matt’s key responsibilities encompass organisational customer service and communications support to the Investor Relationships team. With academic knowledge of property finance and investment, alongside experience in relationship management in both the private and public sectors, Matt brings a unique lens to the team while ensuring the smooth day-to-day running of investment services for the investors of PMG.

After receiving a Bachelor of Property from The University of Auckland, Matt went into a Property Management administration role at a private hotel and commercial property investment company in Auckland. Prior to joining PMG in 2021, Matt was a Property Manager at CBRE Australia and part of a team managing the Sydney Harbour Foreshore (Circular Quay, The Rocks, and Darling Harbour) portfolio of over 150 tenants.

Kay Karl Investor Relationships Support

kay.karl@pmgfunds.co.nz

With an extensive administrative and secretarial background, Kay is an integral part of the PMG Investor Relationships Team. She takes an attentive approach to her responsibilities in supporting the wider team, onboarding new investors, administration of offer applications and the secondary market, and ensuring all investors receive the best service. She also manages and updates the PMG Investor Portal, all while ensuring compliance requirements are met.

Before joining PMG, Kay was a Senior Legal Assistant at Cooney Lees Morgan and over the past 17 years has worked predominantly in the law sector.

Matt Topham Investor Relationships Associate (Central North Island)

Frequently Asked Questions

We understand that investing is complex and that you may have some additional questions before getting in touch. See some of our frequently asked questions below. You can learn more about PMG Funds (the manager), how to invest in our individual funds and our management approach on our website at pmgfunds.co.nz/faq

Why invest in a professionally managed property fund?

There are several reasons to consider investing in a commercial property fund. A diversified commercial property fund can provide investors with the benefits of investing alongside a pool of other investors across multiple properties with a mix of tenants. This means investors’ risk is feasibly spread across more properties and tenants than if they owned a single property.

As with PMG, diversification of properties, tenants and locations can provide investors with improved income sustainability. Should a single tenant or property not perform as expected, the other properties and tenants in the fund may help reduce the impact on the overall portfolio’s returns. As a result of having multiple investors in a property fund (compared to single property syndication), there are more investors who may wish to sell shares or units, or buy shares or units, should an investor’s circumstances change. PMG Investor Relationship Managers facilitates the buying and selling of the investments via a matching service. The time it takes for PMG to assist with the sale and purchase of investments can vary, and we would always encourage investors to take a long term view when investing with PMG.

Who manages our investments?

PMG Property Funds Management Limited (PMG). Dating back to 1992, PMG is one of the most established and most trusted licensed property funds managers in New Zealand.

PMG (the Manager) is licensed under the Financial Markets Conduct Act 2013 to manage Managed Investment Schemes (excluding managed funds), which invest in, or own, real property in New Zealand.

What fees will I pay for investing with PMG?

All projected and forecasted gross cash returns quoted to investors are stated net of ongoing fees and expenses charged to the fund but before taxation. Ongoing fees and expenses paid by a fund to PMG will typically include a Property Management Fee payable to PMG (based on the fund’s total rental income) and a Fund Management Fee (based on the total value of the property investments under management). These fees are directly linked to investors’ key drivers of financial returns – helping ensure that investors and PMG’s interests are aligned. We invest alongside our clients, sharing both the risks and returns, so our directors and team have skin in the game too.

For investment-specific information, please see the relevant fund’s Product Disclosure Statement or contact our Investor Relationships Team.

As with PMG, dive How long do I need to invest for?

There is no minimum timeframe for investments made with PMG. However, PMG (as the manager of the funds) is a long-term value investor. This means we identify and invest in commercial property that potentially presents the opportunity to grow value for investors over the long term. Therefore, any investment decision is best made with a long-term investment horizon.

How do I get my money out?

Thanks to PMG’s extensive database of investors, we facilitate a secondary market or matching service, where you can either buy or sell your PMG shares and units to other eligible PMG investors.

The time it takes to find another investor to acquire your shares or units can vary depending on the number of investors who are looking to buy shares or units at any point in time. From time to time, PMG may also offer redemptions for the applicable funds – this will be dependent on the specific fund and is offered at PMG’s discretion.

What is an eligible wholesale investor?

Investment in some of PMG’s funds is only open to persons who meet the legal criteria of a wholesale investor under the Financial Markets Conduct Act 2013 (FMC Act), which includes “eligible wholesale investors”.

An eligible wholesale investor is a person who has sufficient knowledge and experience dealing in financial products, enabling them to sufficiently assess the merits of a transaction, their information needs in relation to the transaction, and the adequacy of the information provided in relation to the transaction. To be an eligible wholesale investor under the FMC Act, a person must, before making an investment, certify in writing that they are an eligible investor. The certification must be confirmed by a Financial Advice Provider, lawyer or chartered accountant.

What is the difference between listed and unlisted property funds?

New Zealand listed and unlisted property funds are governed by the applicable laws including the Financial Markets Conduct Act 2013 (FMCA) and regulated by the Financial Markets Authority (FMA).

Listed property funds (or sometimes known as Listed Property Vehicles) are quoted on stock exchanges such as the NZX, allowing investors to purchase shares/units in that fund through a broker or investment platform. Shares/units in listed property funds can be traded when the market is open. Market sentiment and demand for a fund can quickly influence share/unit prices, which can result in the fund trading below its true value (or the value of its underlying property assets).

Unlisted property funds issue shares or units and are not quoted on a listed exchange (such as the NZX). To sell shares or units in an unlisted property fund, the Managers typically offer over the counter matching service, facilitating the matching of buyers with sellers or, where it is permitted, private transfers may be arranged by buyers and sellers between themselves. Sometimes, unlisted property funds may also have ‘redemption’ periods available, which allows investors to ‘redeem’ their shares or units. The value of the shares or units is updated regularly with a prescribed valuation methodology as set out in the Fund’s establishment deeds. The value of shares or units in unlisted property funds are valued annually by an independent registered valuer (or more frequently as required), so the unit price generally reflects the actual value of the underlying property assets rather than the regular fluctuations of market or investor emotion and sentiment.

Is PMG licensed?

Yes. PMG was one of the first unlisted property funds managers licensed by the Financial Markets Conduct Act 2013 to manage Managed Investment Schemes (excluding managed funds), which invest in, or own, real property in New Zealand.

What is the reinvestment plan?

PMG’s reinvestment plan was originally a feature of PMG Generation Fund. Since the Fund launched in March 2020, the focus has been on providing everyday New Zealanders with greater accessibility to commercial property investment.

Today, the Reinvestment Plan allows all PMG investors, in any of our funds, to reinvest their

returns into PMG Generation Fund. It is a fantastic opportunity for those investors that want to see their passive income work even harder, achieving greater financial freedom. It also means New Zealanders can invest small amounts often in quality, unlisted commercial property.