FAQ
Sunstone Capital Fund II is an alternative asset investment opportunity available to individuals, companies, trusts, and pension funds. The Fund purchases a portfolio of movable assets and rents them out for fixed monthly payments, resulting in an exceptional above-average return.
To own and operate a portfolio of high-yielding movable assets and distribute the rental income returns to our investors.
Individuals, trusts, and companies can invest in the Fund. Pension Funds are also permitted to invest in the Fund as governed by Regulation 28 (as amended) of the Pension Fund Act.
Investors can exit their investment with 3 months notice. A discount may apply if their notice period is less than 3 months.
At the end of the 5-year Fund term, the portfolio of movable rental assets will be sold to a secondary market at fair market value to enhance investor returns. The Fund term may be extended for a further two years, at the discretion of the Fund Manager.
The Internal Rate of Return (projected IRR): 14% (net of fees).
Distribution policy: Investors will receive bi-annual dividend income distributions from the rental income of the movable assets, in February and August each year.
Average annual dividend distribution: 10% per annum.
The income generated from the rental of the movable assets, net of costs, is distributed to investors bi-annually in February and August.
The IRR is a metric used to estimate the return on the investment having taken into account the time value of money.
A typical money market bank account will offer you 6-9%. Sunstone will offer you an IRR of 14% net of fees.
The investment risk profile is low to moderate. The funds will be deployed into a diversified portfolio of movable assets. Each rental contract will be bound by a long-term lease which sets out the amount of income to be earned.
Yes, it is regulated by the Financial Sector Conduct Authority (FSCA) and the Financial Intelligence Centre (FIC). The Fund is further regulated by the Information Regulator in South Africa in respect of:
- Protection of Personal Information Act, 4 of 2013 which promotes the protection of personal information by public and private bodies.
- Promotion of Access to Information Act, 2 of 2002 which provides for the right of access to information held by public and private bodies when such information is requested for the exercise or protection of any rights.
The Fund is administered by Grovest, the pioneers of fresh thinking and investment products in alternative investing, and one of the largest small-cap administrators in South Africa, with R3.6 billion in assets under administration.
Yes, it is. This amount is determined at the time of exit based on the selling price of the portfolio.
Capital raising fee:
A fee of 1.5% (once off) of capital raised is paid to the Manager.
Management fee:
An annual management fee of 2% of the invested amount is paid to the Manager. This fee is paid quarterly in arrears.
Performance fee:
The Manager will earn a performance fee of 20% on all distributions after first achieving a 6% hurdle rate. The hurdle rate is the minimum rate of return that the Manager must achieve before they can earn a performance fee.
All Investments are approved by an experienced Investment Committee before they are implemented. The Investment Committee will select a diversified portfolio of investment opportunities to spread out the risk.
The Investment Committee will consider investments based on the following:
- The borrower must be credit-worthy with a good credit history and will need to pass an extensive due diligence process.
- The borrower must enter into a long-term lease agreement and provide adequate collateral and surety.
The Fund will be investing primarily in the lucrative medical lending space and there are approximately R70 million of these deals in the pipeline.
The minimum investment is R50,000. There is no maximum investment amount.
