Transcript:

Karen: Hello and welcome to our Sydney Proactive Studio. Joining me today is Arthur Naoumidis. He’s the CEO of the fractional investment platform, DomaCom Ltd. Hi Arthur. How are you today?

Arthur: Hi Karen. I’m very good. Thanks for having me.

Karen: Lovely to see you and nice to have you up from Melbourne today in our Sydney studio. So tell us a bit about DomaCom for our new viewers. Tell us, first of all, what your main business is before we move on to a new venture that you’re actually working on.

Arthur: Well, look, as the name suggests, fractional investing, so we’re a platform that is, effectively, a modern form of syndication using managed fund legal structure, so it’s quite a scaleable platform. Our core business is fractionalizing property, in other words, crowdfunding or syndicating property investments. But we obviously syndicate other assets, and obviously, the wind farm is the latest one.

Karen: Yeah, moving onto that wind farm, a very different type of venture. Tell us about it. How does it work? And what’s on offer, basically?

Arthur: Well, firstly, it’s a great idea, so as a lot of Australians have seen now, there’s wind farms popping up everywhere, and it’s causing a bit of community anger or angst in that a lot of the…the farmers themselves, they’re quite happy. They get compensated for having the turbine on the land, but the neighbors don’t, okay? And all the neighbors have to put up with the eyesore of these big turbines in their face. So what Sapphire Wind Farms have done is to say, “Well, how can we engage with the community and give them some value out of having the wind farms in their eyes?” And so what they’ve done is created the venture, marketed just to the locals, and it’s been great. So as you see, the investors make a good return.

Karen: So how’s it going? Like are they feeling a bit more ownership and getting, as you say, something back from a project now, so rather than viewing it from a distance, they’re more embracing it?

Arthur: Well, clearly 84 of the locals are. They’ve invested in it, and I haven’t spoken to them individually to see how they feel about it, but I think in this current environment, the interest rates that they’re getting are very attractive, so they must be happy when they’re driving down the road and seeing the wind farm in the horizon.

Karen: How unique is it? Is there anything else like this in the world? And also, what sort of potential can it offer its investors?

Arthur: Well, look, I don’t know about the world. I know in Australia this is its first, and it’s a very attractive return for investors. So what they’ve done, the recipi-renewables, is credit a venture for 9 1/2 years and the investors get 6% return and secured by the assets of the wind farm, so it’s a very attractive return. So at the moment, you’re lucky to get 1% or 2%, say, 2% for a term deposit. Here people are getting 6%, so as they’re driving down the road, and they’re seeing that turbine turn around, they’re saying, “Six percent, 6%.” So it’s a very attractive return, and it’s a very mixed bag of investors that have invested.

Karen: Yeah, that’s a good point. Like it is a higher interest, right, in returns. But also you mentioned investors. There’s a big range in age in interest in wind.

Arthur: Yes, 84 investors. The youngest was 21 years old. The oldest was 91. I mean, I liked that person, so 91 years old invested into a 9-year term deposit, effectively, and they’re getting a very attractive return, so yeah, well done.

Karen: Sounds really interesting. So what else is happening in your company? Is there any other news flow to comment on at this point?

Arthur: Well, as it’s close to the market, there are two, sort of big product events for DomaCom. The first is that for many years we’ve been working on a sole purpose test matter with the ITO, going as far as the full federal quarter at 12 months ago. So we’re very close to having an invested declaration, and so I’m hoping in the next month or so that we’ll be able to go to market with that finally sorted and people will be able to co-invest with their super funds into sub-funds and under certain conditions, rent it. So that’s a big, big item that’s coming. The other one is our core product line which is senior equity release. It’s now live in the market and we’re having advisers start going through the accreditation program. Over the next little while, we’ll see our first dealer groups put us on the approved product list. And so we’re hoping for some really good news flow coming from that product line, so it’ll be a very good next 12 months for us.

Karen: Sounds very exciting, especially that super initiative. Look forward to hearing more about that because I think it’ll impact a lot of people in Australia. Won’t it, really?

Arthur: Oh, definitely, definitely. Thanks, Karen.

Karen: Lovely to see you, Arthur. That’s Arthur Naoumidis from DomaCom Ltd.