1st November 2007

Dear Investor,

As an investor in our Mortgage Fund, you may have wondered about other services that La Trobe offers, so we have compiled a list of questions many investors like you have been asking.

Is La Trobe a bank?

No. La Trobe is a non-bank financial institution and the Fund is one aspect of our overall business operations. We also operate our national lending division, which reviews over $2 billion of loan applications annually. Unlike many of today’s mortgage operators, La Trobe does not act as an agent or broker for another party. When borrowers deal with La Trobe, they are dealing with us as the lender and decision maker.

How does La Trobe raise the funds in order to be able to provide loans?

Our funding is raised directly from institutional and private investors, which has been the platform for our success since 1952. Our institutional investors include a number of major banks, both local and international, second tier banks, insurance and other financial organisations. We also hold an Australian Financial Services Licence, so private retail investors like you can also invest in our Mortgage Fund, providing tailored investment options.

Are there any other non-banks in Australia with a similar business model?

Not to our knowledge, and particularly not one of our size. La Trobe is unique in that we offer a total menu of loan products to suit the varying needs of our borrowing customers. These include commercial loans with our flexible on-the-spot loan approval capabilities, combined with an investment management process which allows direct contact by the borrowers with key decision makers at La Trobe. We also manage the custodial process, as we hold the security deeds to our mortgages. Over the past 55 years of operation we have developed a prudent but flexible lending policy used to screen individual loan applications that fit our chosen risk appetite for mortgages across Australia.

Does La Trobe seek to compete directly with the banks? How does it differentiate its products and services?

There is an old adage, "When elephants fight, the grass gets trampled.", so we attempt to focus on lending markets that are under-served by the more traditional lenders. What we endeavour to do is to provide a full range of niche mortgage lending products with a bias towards speed of approval and creating a clear path towards settlement. We focus on lending niche products against residential properties, and also write a limited number of construction loans, and loans secured on commercial premises. Our execution of loan applications for brokers and third party referrers is how we finally differentiate ourselves.

How does La Trobe react to additional competition?

The advent of new securitised mortgage lenders really only challenged the more traditional lenders and forced the major banks in the later 1990s to re-think their customer proposition as to the amount of margin they could charge for standard home loan business. It appeared that the newer 'kids on the block' securitised lenders were also very good at self promotion to the borrowing consumer. However during this period we at La Trobe "stuck to our knitting" as a specialist non-bank lender and our loan volumes just kept increasing. We knew that we had a clear point of difference in the market with which our borrowing customers felt comfortable. Previously we had outlived many onslaughts by other non-bank competitors such as insurance companies and building societies, particularly during the 1960s & 1970s in our chosen lending sectors. In meeting these challenges over many years, we have become stronger and have developed a winning culture that focuses on what we do best, rather than trying to spend too much of our time on being over focused on others.

What are the implications today of having so many players in such a fragmented lending market?

We can see no substantial negative implications for the borrowing consumer in having such robust competition. This mature consumer market has resulted from the intensive commoditisation of the underlying product – a mortgage. At last count, according to Cannex, there were some 300 entities calling themselves lenders in Australia, offering over 1258 home loan products. This fragmentation on the whole has served the Australian borrowing public very well, with a higher level of consumer convenience than previously was the case.

Which distribution channels does La Trobe use to source its loans – branches, brokers etc.

We have nationally appointed State and relationship Managers in the capital cities. Our Head Office is in Melbourne with our National Administration Office in Traralgon, Victoria and we are currently scoping the possibility of opening offices in Sydney and Brisbane. We also use many of the major mortgage aggregating groups and individual mortgage brokers to distribute our loans.

How has La Trobe’s acceptance in the market as a non-bank lender progressed?

With a track record going back to 1952, when La Trobe was established, we are well known in the marketplace nationally by the other bank and non-bank financial institutions, and this has filtered down to individual mortgage brokers and borrower consumers. We don’t have bricks and mortar offices in every suburb in every town, or franchised offices on every corner, so we’re not quite a household name in that respect. However, in a service driven industry, it all comes back to the quality of service provided by our 140 staff who have an unrelenting approach to providing complete customer satisfaction. When it comes to our people, one of our main values has always been to recruit and retain the very best the industry has to offer. For all of us at La Trobe, it is not just a job… it's our vocation and profession, we love it and deeply believe that La Trobe is the way investing should be.

La Trobe’s position in summary

La Trobe, as a focused non-bank financial institution, is committed to providing excellent products and services to both its investor customers and borrower customers, coupled with a high level of personalised service that is rarely delivered by the major banks.

Best regards,
Chris Andrews


> Home
> About Us
> PDS - Want to invest?
> FAQs
> Subscribe Free
> Independent Ratings
> Mortgage Shopping List

Chris Andrews
Head of Funds Management

t  +61 3 8610 2811
e  candrews@latrobefinancial.com.au

Chris Andrews is the Head of Funds Management for the La Trobe Group and has responsibility for the La Trobe Australian Mortgage Fund.
Read full profile here.

La Trobe is one of Australia's leading independent specialist mortgage Financiers. Its business includes residential mortgages, commercial mortgages, and investment services operating one of Australia's largest Mortgage Funds under AFSL 222213. It employs over 115 staff and has raised over AUD$10Billion to assist over 100,000 customers since inception in 1952.

Copyright 2010 La Trobe Financial. All rights reserved. No portion of this may be reproduced, copied, or in any way reused without written permission from La Trobe Financial. Disclaimer

* La Trobe Financial Asset Management Limited ABN: 27 007 332 363 and AFSL No: 222213 is the issuer and manager of the La Trobe Australian Mortgage Fund. It is important for you to read the Product Disclosure Statement for the Fund before you make any investment decision. You can get a copy of the PDS by calling 1800 818 818. You should consider carefully whether or not investing in the Fund is appropriate for you.
(1) The rates of return from the Fund are not guaranteed and are determined by future revenue of the Fund, and may achieve lower than expected returns. Past performance is no guarantee of future performance. Investors risk losing some or all of their principal investment.
(2) Withdrawal rights are subject to liquidity and may be delayed or suspended.
(3) As at 30/11/10 the La Trobe Australian Mortgage Fund had received a Morningstar RatingTM of 5 stars. The Morningstar Rating is an assessment of a fund's past performance - based on both return and risk - which shows how similar investments compare with their competitors. A high rating alone is insufficient basis for an investment decision. © 2010 Morningstar, Inc. All rights reserved. Neither Morningstar, nor its affiliates nor their content providers guarantee the above data or content to be accurate, complete or timely nor will they have any liability for its use or distribution. Any general advice has been prepared by Morningstar Australasia Pty Ltd ABN: 95 090 665 544, AFSL: 240892 (a subsidiary of Morningstar, Inc.), without reference to your objectives, financial situation or needs. You should consider the advice in light of these matters and, if applicable, the relevant product disclosure statement, before making any decision. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/fsg.pdf
(4) 3.75 star rating out of a possible 5 star rating indicates that Adviser Edge believes that La Trobe has performed in line with its peers and exceeded its peers on some fronts.
(5) The Standard and Poors rating of 4 out of 5 stars indicates that S + P has high conviction that La Trobe Financial will consistently generate risk-adjusted fund returns in excess of its relevant investment objectives and relative to its peers.
(6) The award was given to the La Trobe Australian Mortgage Fund, Pooled Mortgages Option.
Research Ratings are subject to change. To view the latest research information please visit www.adviseredge.com.au or www.standardandpoors.com.au. Ratings issued by Adviser Edge Investment Research AFS Licence No. 236783 and Standard & Poors Information Services (Australia) Pty Ltd AFS Licence No. 258896 are solely statements of opinion and not statements of fact or recommendations to purchase, hold, or sell any securities or make any other investment decisions. The ratings are only one factor to be taken into account in deciding to invest. Research Houses receive a fee from La Trobe for rating the product. The Adviser Edge rating is generally a measure of the rated entity's capacity to meet its repayment obligations in all market circumstances.
IMPORTANT: This message, together with the La Trobe Financial website (www.latrobefinancial.com.au) and all its contents have been prepared for general information only and should not be taken as legal or financial advice, and as such the specific needs, investment objectives or financial situation of any particular user have not been taken into consideration. Individuals should therefore talk with their financial planner or advisor before acting on any information present on this message or the La Trobe website.