Trilogy Funds acts as the Fund Manager, in a Responsible Entity (RE) capacity, for all its investment offerings. Trilogy Funds has held the Australian Financial Services Licence number 261425 since 2004 and, prior to gaining an AFS licence, it was a licensed securities dealer since 11 March 1998 (prior to the Financial Services Regulation).
We offer specialist governance, structuring and compliance services as part of our RE services, sharing more than a decade’s worth of experience in investment management administration. Parties interested in our RE services can contact us on 1800 230 099.
REs must be Australian public companies with a prescribed level of net tangible assets, depending on the value of the scheme’s assets, among other things. REs must also hold an Australian Financial Services Licence authorising it to act as a responsible entity and meet strict requirements concerning cash flow, dispute resolution and compensation arrangements. Trilogy Funds can also be appointed RE for other managed investment schemes.
As a Responsible Entity, we must:
- Register schemes (trusts/funds) with the Australian Securities and Investments Commission (ASIC)
- Write and lodge the Constitution of the Scheme with ASIC
- Issue disclosure documents i.e. Product Disclosure Document or PDS
- Establish compliance plans and monitor against regulatory and legislative requirements
- Appoint a compliance committee
- Appoint and monitor external service providers (Audit, Custody and Administration).
When acting on behalf of an investment scheme, an RE must:
- Act in the best interests of members
- Act honestly
- Exercise a reasonable degree of care and diligence
- Treat all investment scheme members of the same class equally and members of different classes fairly.
A Responsible Entity, or RE, was a concept created by the Managed Investments Act 1998 and is unique to the Australian financial services sector. It replaced the ‘Manager’ and ‘Trustee’ role that had previously existed for managed investment schemes. The RE has the dual role of trustee and manager of an investment scheme, and must be appointed if an investment scheme needs to be registered. An RE can either be owned by the same group as the fund manager, i.e. an “internal” RE, or alternatively be run separate to the fund manager, i.e. an “external” RE. Where the RE is external, the RE, on behalf of the investment scheme, typically enters into a management agreement with the fund manager.
Investors in managed investment schemes can replace the existing RE through a vote. Trilogy Funds has replaced other REs and in so doing has taken over management of a number of distressed property and mortgage trusts with receivers involved. In these circumstances it is our role to act in the best interests of the investors and try to maximise their ultimate return.
We have become replacement RE for the Pacific First Mortgage Fund (formerly City Pacific First Mortgage Fund) valued at $521 million; the LM Wholesale First Mortgage Trust valued at $58.7 million and a number of the Australian Property Growth Fund property trusts valued at $60 million (values stated were at the time Trilogy Funds became RE of the Fund).