25th June 2008

Dear Investor,

What is Private Lending?

Private lending is commonly referred to as "the oldest form of mortgage lending". It is a type of financial intermediation where the borrower and the investors have a more direct relationship than usually applies with a bank or similar financial institutions. In the usual banking relationship, the investor deposits funds with the bank and the borrower obtains finance from the bank. The investor is paid a conservative rate of return and has no knowledge of the particular loans that the deposit is funding.

Traditionally, private lending has operated in a non-bank environment, where individual investors provide the capital for specific loans. And in its simplest form, there may be one investor providing the capital for one borrower.

Both private lending and traditional banking are regulated prudentially in Australia, but by different government regulators. Private lending is regulated by the Australian Securities & Investments Commission ("ASIC"), while the banks are regulated by the Australian Prudential Regulation Authority ("APRA").

How do these investors and borrowers come together?

The La Trobe Australian Mortgage Fund ("the Fund") operates as a catalyst for investors and borrowers by bringing them together in an appropriately structured legal vehicle - a managed investment scheme, registered under the Corporations Act. This private lending is facilitated predominantly through the Fund's Select and Special Situation Mortgages Options.

Why do borrowers use this type of lending?

Funds sourced though private lending offer a particular and efficient method of borrowing. This form of lending offers the borrower quick decision-making by the lender and allows the transaction to be tailored to suit the borrower's situation. La Trobe as a non-bank lender offers services like speed, flexibility, diversification and privacy. By taking a flexible approach to lending, the Fund is able to process loans more efficiently. A good example of this is with borrowers who are self employed, as they can often find it difficult to obtain finance from a bank due to restrictive guidelines that do not accommodate the needs of the self employed. La Trobe aims to provide an equal playing ground for all borrowers.

Why do investors use this type of investment?

Private lending is suited to investors who are seeking a higher fixed interest type return, and who recognise that this may involve a higher risk. Investors wishing to obtain a higher return than offered by traditional bank deposit utilise private lending to achieve higher fixed returns while mitigating risk. This is because every investment offered through the Fund has the benefit of being secured by a registered mortgage over real property. The Fund's Select and Special Situation Mortgages Options provide investors with the ability to choose the individual mortgages they want to invest in. This also gives investors the ability to create a diversified portfolio of mortgages. By selecting their own investments, investors have the ability to decide what areas they would like to be exposed to and the amount of risk they are willing to undertake. For those investors who like the benefit of a diversified portfolio of mortgages but who do not wish to create their own, they can invest in the Fund's Pooled Mortgages Option.

The Fund provides an ideal vehicle for astute investors who are seeking both higher fixed interest returns and the ability to take an active part in the investment process.

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.