DaVinci
The Alternative Income Fund is an alternative to traditional income and equity funds. The Fund invests outside the public markets with the objective of offering higher returns while maintaining lower levels of volatility. The Fund is made up of private mortgages and cash flow generating real estate. The Fund’s objectives are to earn moderate rates of return while minimizing volatility, and have a low or zero correlation with stock and bond markets.
Fund strategy Highlights
Opportunistic
Approach
Latitude to invest in debt or equity, across real estate sectors, in Canada and the U.S., and occasionally, outside of North America.
High IRR
Identify and model assets which can generate 12%–18% IRRs over a period of 3 to 5 years.
| QUICK FACTS | |
|---|---|
| F Class Purchase Code | GCC102 |
| NAV | Monthly |
| Distributions | 6% Annually / Paid Quarterly |
| Redemptions | Monthly |
| Notice Period | 90 Days |
| Structure | Mutual Fund Trust |
| Eligibility | RRSP, TFSA, RESP & RRIF |
Smaller
Property Size
Market inefficiency exists in properties under $100 million dollars, often overlooked by large institutions, yet generally too big for high net worth individuals.
Strong
Demographics
Identify geographic areas with significant demographic and
economic growth.
Examples: Texas post 2008, Florida in 2014, Cleveland in 2017, Nevada in 2019.
“Value Add”
Component
Looking for solid business plans to increase net operating income (NOI) via properties with rents below local market rates, replacing property managers, minor unit upgrades, etc.
No Construction/
Development Risk
Only buy cash producing assets; we do not take on development or construction risk.
Quality Operators
Partner with best of breed real estate operators with local teams on the ground that specialize in the targeted geography and asset type.
Why Alternative income fund?
Davinci’s Unique Investment Strategy
- Actively managed, opportunistic approach
- Cash flowing opportunities with near term distributions
- No development projects
- Focus on “value add” projects
- Diversified by asset class, sector & geography
- Proven partner relationships
- No Additional leverage at fund level
WHY PRIVATE REAL ESTATE?
- An alternative source of income and returns
- Lower volatility than public REITs
- Low correlation to other asset classes
Portfolio Details
Top Ten Holdings by Property
GROWTH OF $150,000
RISK RETURN
| RETURNS & RISK SUMMARY (NET OF FEES AND EXPENSES) | |
|---|---|
| Return Since Inception (June 30, 2010) | 268.51% |
| Annualized Monthly Return Since Inception | 10.34% |
| Sharpe Ratio | 2.67 |
| Sortino Ratio | 7.44 |
| Down-Market Capture Ratio | -30.38% |
STRATEGY PERFORMANCE
Inception June 30, 2010. For periods ending September 30, 2023
Property by Classification
- Multi Residential 84%
- Retail 5%
- Self Storage 3%
- Healthcare 4%
- Office 4%
Property by location
- US 74%
- Europe 8%
- Canada 15%
- Brazil 3%
feature Holdings
Secure Self Storage
Location: Oakville, Ontario
Sector: Multi-family residential
Investment Type: Debt | Mezzanine | Equity
| Opportunistic | Purchased from 3 elderly partners who were motivated to go their own ways | |
| Smaller Size | At $8.2 mil, much too small for most institutional investors | |
| Demographics | Located near the the QEW and Hwy 403, the area continues to grow | |
| High Target IRR | 20%+ targeted IRR over 5 years | |
| No Developments | Existing cash flowing property, no development risk | |
| Value Add | Replace property managers, new signage, marketing, solar panels on rooftops. | |
| Quality Operators | Specialists in self storage. Davinci has worked with the operators for over 9 years |
HERMITAGE APARTMENTS
Location: St. Petersburg, Florida
Sector: Multi-family residential
Investment Type: Debt | Mezzanine | Equity
| Opportunistic | Off market opportunity to acquire large property in a great market (St. Petersburg) | |
| Smaller Size | $50M USD, too large for individuals, too small for most institutions | |
| Demographics | In the heart of downtown St. Petersburg/Tampa, Florida | |
| High Target IRR | 10-21% IRR targeted over 5 years | |
| No Developments | only existing cash flow generating real estate | |
| Value Add | Family property manager replaced with professional property management firm; Unit renovations; rate increases; some common area improvements | |
| Quality Operators | An operator well known to Davinci |
THE LUCKMAN
Location: Cleveland, Ohio
Sector: Apartment Buildings
Investment Type: Debt | Mezzanine | Equity
| Opportunistic | A Cleveland renaissance since 2017, resulting in high residential demand In the downtown core | |
| Smaller Size | $37.6 mil USD, too small for most instituonal investors | |
| Demographics | Almost no vacancy in downtown core, given strong demand for residential space | |
| High Target IRR | 18%-20% net targeted over 5 years | |
| No Developments | only existing cash flow generating real estate | |
| Value Add | Replaced property manager; Unit renovation program; reconfiguring space to add additional units; upgrade of common areas. | |
| Quality Operators | Have successfully invested in several prior projects with this operator |
PRISM MULTI FAMILY APARTMENTS
Location: Las Vegas, Nevada
Sector: Multi Family Residential
Investment Type: Debt | Mezzanine | Equity
| Opportunistic | Very good submarket with high occupany but below market rents | |
| Smaller Size | $56M USD, too large for individuals, too small for most institutions | |
| Demographics | High demand for work-force housing; strong net migration into Nevada | |
| High Target IRR | 19% IRR targeted over 5 years | |
| No Developments | only existing cash flow generating real estate | |
| Value Add | Replace property managers; unit renovation program | |
| Quality Operators | Have worked with the Operator since 2013. |