• The NB MIT is a compelling alternative to existing yield focussed investments, with a forecast distribution of 6% p.a. paid monthly, along with an objective to deliver a stable and moderately accretive NTA.
• The product offers income diversification for clients with a concentrated exposure to Australian assets and those that are overweight risk assets.
• It is managed by Neuberger Berman, a highly regarded global asset manager that is 100% employee owned and presently manages ~A$320bn in FUM globally, ~A$140m in fixed income and ~A$10bn in closed end funds.

The NB Monthly Income Trust is a newly constituted managed investment scheme, which has been registered with ASIC. Following completion of the Offer, it is proposed that the Fund will be listed on the ASX as an investment entity.

The Fund will provide investors with exposure to the U.S. home loan market through its investment in, as the sole limited partner of, the U.S. Residential Property Income Fund I LP (the “Underlying Fund”), a limited partnership formed in the state of Delaware in the United States. The Fund will subscribe for Australian denominated limited partnership interests in the Underlying Fund.

The Fund’s investment objective is to provide its Unitholders with consistent monthly distributions while maintaining a stable and moderately accretive NTA per Unit over the long term.

For the first full Australian tax year of the Fund commencing on 1 July 2016 and ending on 30 June 2017 (the “Forecast Period”), the forecast annual distribution amount per Unit, which will be paid monthly by the Fund, is 6% (net of fees and expenses) on the Subscription Price (the “Forecast Distribution”).

• Income: A Forecast Distribution of 6% p.a. (net of fees and expenses) on the Subscription Price, paid monthly over the Forecast Period[2]
• Stability: The Fund’s objective of maintaining a stable and moderately accretive NTA per Unit over the long term
• Diversification:  Exposure to the U.S. home loan market, thereby diversifying beyond Australian listed equities and Australian fixed income products
• Risk management: Credit, currency and interest rate risks managed and mitigated actively
• Security: Investments secured against US real estate assets
• Experience: Access to an experienced investment team

[2] This Forecast Financial Information is based on assumptions and accounting policies set out in Section 6 of the PDS, and is subject to the risks including those set out in Section 8. There is no guarantee that the Forecast Distribution can or will be achieved. If the actual outcome differs from the assumptions, the actual return may not be as forecast. The forecast is not indicative of the return before and after the Forecast Period.

The Fund provides Unitholders with the opportunity to diversify their investment portfolios beyond Australian listed equities and Australian fixed income securities by gaining exposure to the U.S. home loan market and associated real estate-related investments through the Fund’s investment in Australian dollar denominated limited partnership interests issued by the Underlying Fund.

During the initial Forecast Period of 1 July 2016 to 30 June 2017, the Investment Manager proposes to invest the Underlying Fund in Home Loans and Residential Mortgage-Backed Securities (“RMBS”) (together the “Proposed Portfolio”). 

It is anticipated that it will take the Investment Manager approximately three months to fully construct the Proposed Portfolio and initially the Investment Manager will invest in short-term fixed income securities[3] while constructing the Proposed Portfolio.

[3] 30-day term deposits with the Underlying Fund's custodian, U.S. Treasury Securities and short term debt issued by the Federal National Mortgage Association ("Fannie Mae") and the Federal Home Loan Mortgage Corporation ("Freddie Mac").

Neuberger Berman have indicated that it is intended that a number of entities within the Neuberger Berman group, including the Manager, and entities managed by Neuberger Berman will invest up to A$35 million under the Offer.

0.75%

As noted, both the Manager of the Fund and the Investment Manager of the Underlying Fund are members of the Neuberger Berman group of companies (“Neuberger Berman”).

Founded in 1939, Neuberger Berman is one of the world’s leading independent, private, employee-owned asset management groups and partners with institutions, intermediaries and individuals worldwide to customise solutions that address their needs for income, growth and capital preservation.

Neuberger Berman provides a broad range of global investment solutions across equities, fixed income and alternative investment strategies to investors through customised separately managed accounts and managed funds. As of 31 December 2015, Neuberger Berman’s assets under management were approximately US$240 billion.

The investments of the Underlying Fund will be managed by an experienced team of financial professionals of the Investment Manager, of which I am the Senior Portfolio Manager, focused on the analysis of, investment in and management of U.S. Home Loan and real-estate-related assets (the “Investment Team”). The team is a part of Neuberger Berman’s Global Fixed Income team, which comprises over 100 money managers, research analysts and associates, and supports the Investment Team.