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Aura High Yield SME Fund: Letter to investors 26 September 2022

Aura High Yield SME Fund

Aura High Yield SME Fund: Letter to investors 26 September 2022

The Reserve Bank of Australia has released a renewed paper reviewing how small to medium enterprises (SMEs) access funding. This report comes off the back of a July meeting with the Small Business Finance Advisory Panel, providing an update on the current state of the SME finance market.

This week, we have prepared a short report providing insights on how the RBA’s findings reinforce the thesis of the Aura High Yield SME Fund.

Product offerings to small businesses from banks no longer suit the requirements of small businesses and their owners. This can be traced back to a shift in the regulatory treatment of small business loans. Inevitably, this shift led to a funding gap in the SME sector, estimated at approximtely $213.6 billion according to the 2021 Judo SME Banking Insights Report.

We focus on funding Australian businesses because they employ over 70% of the Australian workforce. In our view, there are several foregone opportunities within the Australian SME lending market due to a lack of capital availability.

Read the report: Reinforcement of the Aura High Yield SME Fund thesis

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Brett Craig is responsible for portfolio management and asset origination for the Aura High Yield SME Fund and the Aura Core Income Fund. Prior to joining Aura Group, Brett held a number of roles at Macquarie Group over an 11 year period including Vice President within the Debt Markets business where he focused on originating, structuring and distributing debt products primarily in the Australian market.

This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.

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