DHA Investment Management Limited (DHA IML)
With approval from the Minister for Finance, DHA IML was established as a wholly-owned subsidiary of DHA in 2012. DHA IML holds an Australian Financial Services Licence to conduct a financial services business and operates as the responsible entity for DHA Residential Property Fund No.1 (the Fund).
In September 2013, units were issued and the Fund was established. In total, 47.1 million units with an initial investment value of $47.1 million were issued. All units were issued to the Centric DHA Residential Property Fund, a fund managed by Centric Limited (Centric). DHA sold the Fund property valued at $44.1 million on leaseback terms. The Fund was intended to have a life of 10 years.
In July 2015, Centric requested the realisation of their investment in the Fund, based on their view that the Sydney (NSW) and Melbourne (VIC) residential property markets had peaked. DHA IML remained the responsible entity and managed the sell down process. The Fund will be wound up in 2016–17.
Governance structure
DHA IML has its own governance structure, including:
Manager
DHA IML is responsible for the operation and management of the Fund. It must perform its duties as Responsible Entity of the Fund under relevant legislation (including the Corporations Act 2001), the Fund's Constitution and the Fund's Compliance Plan. Among other duties, the Manager must act honestly, with care and diligence, and in the best interests of investors.
Board of Directors
Three Directors are accountable for the proper and efficient performance of DHA IML's functions, as well as making decisions on direction and strategy. Mr Martin Brady AO (Chair) and Ms Jan Mason are also DHA Board Directors. Mr Jon Brocklehurst, DHA IML Responsible Manager, is the third Director.
Compliance Committee
The committee monitors DHA IML's compliance with its Compliance Plan, its Constitution and relevant legislation. The committee comprises Mr Jon Brocklehurst (DHA IML Responsible Manager) and two independent members, including the Chair.
External providers
External providers deliver registry and accounting services, and act as custodian of the Fund.
Performance
For the period ending 30 June 2016, DHA IML incurred an operating loss of $103,000 against a budget of $106,000. Net assets were $750,000 and the company complied with capital adequacy obligations.
The Fund commenced paying monthly distributions, as opposed to quarterly distributions, in March 2016. In 2015–16, $50.6 million was distributed, largely consisting of property sale proceeds.
Future property funds
Ministerial approval must be given before DHA (or DHA IML) may pursue any other fund arrangements. We will consider this in 2016–17 as part of a review of our capital management strategy and ownership options, and seek the necessary approvals as required.
