The last 20 years investing with Augusta
I would like to record a few thoughts of our experiences over the last 20 years investing with Augusta Funds Management (previously KCL).
Our first investment with Augusta was in 1997 with an investment in a Brisbane syndicate, this was at the same time that we set up our own business. Over the last 20 years we have now invested in a total of 22 syndicates, several of which have been sold. We have been very pleased with the overall performance of our portfolio of investment properties, this period covered the time the world experienced the GFC which had a major impact on many investments. It was in these difficult times that the identification of properties that have excellent location, building type, quality of tenant and good lease profiles proved essential.
I believe that Augusta has a very high regard for the interests of investors, and works in the best interests of the investor. I also consider that individual investors do have the ability to have a say on how the investment is managed.
I consider that Augusta very carefully mange three distinct areas. Namely:
1. Identifying property opportunities and securing strong tenants.
2. On-going professional management of the properties and tenants.
3. Managing and reporting to investors.
The option of syndicated commercial properties as an investment class, gives smaller investors the opportunity to invest in medium to larger sized properties with typically larger and normally more secure tenants, that would not otherwise be available to an individual. It also enables investors to spread the risk of investment over a number of properties with different location, property type and investment profile. The Augusta investment model allows individual investors a level of involvement not available in other types of investment. I believe the size of the Augusta operation is a good mix of large enough to get good opportunities but not too big for investors to be just another number.
The recent implementation of the secondary market where investors are able to buy and sell units has given the investments a much greater level of liquidity and mitigates one of the previous concerns for investors who wish to exit from their investment for any reason or change in circumstance.
I am more than happy to discuss with any potential investor who wishes to contact me who may wish to discuss investing with Augusta (in general terms).
John Kilpatrick, New Plymouth
No surprises approach!
We have been investing in commercial property, initially with KCL, now Augusta, since 2007. These properties are part of a larger portfolio of investments which allow us to diversify our holdings both in New Zealand and in Australia .
We have always been very impressed with the briefings that KCL and now Augusta have given to prospective investors; detailing risks, rewards, and costs that occur with such investments. While we appreciate that Augusta’s commissions charged are not small, we also understand and appreciate the expertise, knowledge and management skills that Augusta bring to the investments. We have also been impressed with the quarterly reporting that occurs giving us a “no surprises” knowledge situation reporting on the state of the properties, and relevant tenant and financial information.
The monthly distributions allow us to accumulate funds for further investments to secure our retirement and our next generations’ future.
At an investment seminar Bryce Barnett once said to the group that we should always have some fun with our investments. Augusta certainly go that extra mile to ensure their investors have some fun.
The added benefits of social gatherings of many investors during AGM times give a chance to meet investors in many walks of life and see old friends again. The dinners, entertainment and interesting guest speakers all add to the value of this investment group. We do enjoy being part of the Augusta investment family.
Ian & Judith Armstrong, Taranaki
A long relationship with Augusta
I have had a long relationship with Augusta, or KCL as I first knew them. Well over a decade ago, my husband and I initially invested with KCL, as I had personally known Bryce Barnett from mid 1970 and had always found him to be upfront and a tell-it-like-it-is person. So my husband and I bought into just one unit initially, to see how things went, and were very happy with the flow of communication, our questions always professionally and efficiently answered, and were very happy how our investment continued.
Over the years we diversified by buying into different units on offer, both in NZ and Australia, and have had the confidence to purchase even multiple units within the same offering, and have honestly never had any issues on any level. Whilst I fully understand that no-one has a crystal ball, I personally have not experienced any need for concern whilst dealing with KCL/Augusta.
I have attended Augusta's Annual Meetings over the years, both in New Plymouth and Auckland, and always found them to be a welcoming, all-inclusive event, with investors from all walks of life attending which made me feel quite at home as a non-corporate type of person. The annual dinner was a good time for me to hear from other investors in a relaxed setting, as to how well they had enjoyed their relationship with Augusta.
For me personally, what I appreciate most is having a regular monthly flow of income from Augusta, so that I do not need to tap into other investments. I also enjoy reading through the very clear Quarterly Updates and communications from Augusta.
I will absolutely continue investing with Augusta as I am very happy with the way things have panned out for me personally and I always know that if I have any questions, they are always answered to my satisfaction by one of Augusta's friendly staff.
I invest with Augusta as part of my commercial property strategy
I invest with Augusta as part of my commercial property strategy. This includes a portfolio of properties we own and manage ourselves and investments with various syndication companies.
I made my first investments with Augusta (originally via KCL property) around 8 years ago. At the time I was in my late 20’s and was looking for a way to diversify my own commercial property investments. As my own property portfolio grew and the amount of time needed to manage tenants, negotiate leases, maintain the buildings increased I was looking for other avenues for long term, direct property investments.
I have a preference for investments that pay regular income and require minimal management. The main problem with investing directly in commercial property is that you do need specialist knowledge of geographical locations you invest in, a strong understanding of what drives growth in those areas and what appropriate rental rates , cap rates should be. Even for the most straight forward leases and quality new buildings there is more work associated with owning a property directly than investing as part of a syndicate. For myself I wanted to get exposure to quality investments outside of the provincial areas of NZ where I felt comfortable investing in, without having to take the time and risk associated with learning how to invest in cities that were outside my area of specialist knowledge.
I think often people who own their own commercial properties dismiss investing in syndicates, primarily due to the fees charged by the syndicator. I was no different.
I was interested however to compare how the returns over the long run would compare to what I could achieve in my own buildings. I started slowly, but over the 8 year period have continued to invest in many additional Augusta offers, as my confidence in the company grew. I weigh up the fees charged by the following advantages / savings which I can not achieve in my own right. Namely these are, access to higher quality investment properties, monthly cash flow (verses investing in a listed property fund) zero hands on management (verses managing my own tenants) gaining exposure into cities or in the case of their Australian offers another country which allows me to get some non NZD based monthly income. Exposure to lease terms and tenant profiles that I could not achieve in my own holdings. I also feel the fact that Augusta consistently beat my own loan rates by around a full 100 basis points is reason enough to justify part of their management fee.
Having invested with other syndication companies some who have lower fees than Augusta, the main reasons I continue to invest with Augusta other than those outlined above are; Excellent reporting, I always feel I know what is going on with the property and great imparting of their considerable knowledge. I have been impressed that when the time has been right to wind up a syndicate Augusta have not hesitated to recommend this. Rather than just continue to clip the ticket they have pushed for a sale and to date have achieved good returns for me personally in that process.
Re-Sale. Augusta has one of the largest databases of syndicate investors in the country. Syndicates are not a liquid investment, however with Augusta Re-sale of units is a fairly straight forward process. That being said I never really invest with the intention of re-selling in the short term as I see any commercial property investment as a long term plan.
They are a team we respect and trust
As a prudent investor we have always included Commercial property in our investment portfolio. We, for some time, purchased and managed our own properties but our decision to sell and invest with KCL and now Augusta has been a major benefit to us, in both financial and reduced management input.
Investing with Augusta has enabled us to spread the risk with our funds now in a number of buildings and all of these investments would not have been available to us as a small investor. Due to the management skills, knowledge and contacts, Augusta are able to source investments in buildings with tenants that we could only dream about.
Quarterly reporting keeps us informed of our investments and addresses any issues that have arisen. The Augusta Team is always looking for new opportunities and also is continually assessing the existing investments to ensure we are advised of any market changes.
They are a team we respect and trust with our investment funds.
Ron & Judy Keucke