Auctus Investment Group signs joint venture with US student housing firm, launches $72m multi-asset fund

Auctus Investment Group ASX AVC Student Quarters US student housing Gophr
Auctus has established a joint venture with US student housing asset manager, Student Quarters.

Auctus Investment Group (ASX: AVC) has announced it will launch a $72 million multi-asset fund following the signing of a joint venture agreement with top-tier US student housing manager Student Quarters LLC.

The agreement adds Student Quarters as a third asset management partner to the Auctus platform for the provision of institutional-grade assets and investment expertise to high net worth, family office and wholesale investors across the Asia-Pacific.

The fund will invest in “value-add and opportunistic deals” to build a portfolio of $360 million over three years and will see Student Quarters co-invest up to 10% alignment capital into each asset.

Auctus said the fund would aim to deliver a total asset backed net initial rate of return of 15% per annum including an anticipated yield to investors of approximately 6% per annum, payable quarterly.

High-quality assets

Managing director Campbell McComb said the current environment would allow investors to acquire “high-quality assets” on favourable terms over several years.

“Our company is pleased to add a third asset management partner to our platform,” he said.

“We feel both businesses are aligned in our conviction in the opportunities over the coming years in what is a large and scalable US student housing sector.”

Student Quarters was established in 2013 to acquire, reposition and manage existing student housing assets in the US and is believed to be one of the most active and vertically-integrated operators in the industry.

The company counts numerous global institutional investors as limited partners and has completed in excess of 56 student housing deals, totalling more than 28,000 beds with a total transaction value of more than of $2.02 billion.

Gophr results

Earlier this month, Auctus announced strong results for its UK-based investment vehicle and same-day courier service Gophr.

For the six months to June 2020, Gophr posted approximately $5.46 million in unaudited revenue, and looks set to eclipse the 2019 full-year revenue of $6.55 million.

The company also achieved positive earnings before interest, tax, depreciation and amortisation (EBITDA) for April, May and June.

Given revenues are traditionally skewed towards the second half of the year due to delivery demand around the Christmas period, Gophr said it is “well positioned” to grow its 2020 full-year revenue to over $10.9 million.

Auctus shareholding

Auctus Investment Holdings has a 25% shareholding in Gophr, together with a $1.45 million convertible note, and vendor loans to the founders totalling $2.13 million.

Auctus is currently re-negotiating the convertible note, which will expire at end July.

Gophr is a same-day courier marketplace in the UK, utilising external couriers to optimise delivery solutions for customers.

Auctus said the potential scalability of the business model puts Gophr in a “prime position” to tackle a market estimated to be worth more than $2.73 billion per annum.

In morning trade, shares in Auctus Investment Group were trading 42.59% higher at $0.385.

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