Savings & Loans launch Second Innovative ‘Kauri Units’ Product
Savings & Loans has announced the offer of the Kauri Income Units and Kauri Growth Units to follow up the success of their first
innovative Kauri Notes Offer.
Kauri Income Units and Kauri Growth Units are invested in Permal Multi-manager funds that generate high returns with the
benefit of 100% capital protection and the expertise and track record of the Permal Group; one of only two independent
entities in the ten leading global fund-of funds managers. Both Kauri Units are PIE compliant.
Savings & Loans Director Don Cowie said, “The immediate success of Kauri Notes suggested there is a strong latent demand in New
Zealand for a product that provides a unique combination of high security, high performance and liquidity. We have
responded to that demand with Kauri Income Units, for investors seeking security, regular income and competitive
returns, we believe it is the only product of its kind in New Zealand.”
The Kauri Notes already on issue are currently achieving approximately a 20% annualised return during what has been a
volatile time in financial markets. This is a good demonstration of the expertise of Permal Group to which investors
Kauri Growth Units have also been introduced for those investors seeking after-tax capital growth in their investments.
These are also invested in 6 Permal multi-manager funds. The Kauri Growth Units are targeted to achieve an annual return
of 5% above the bank bill rate. They also enjoy the same secondary market liquidity of Kauri Income Units.
Unlike investments in shares or “indexes” where investors rely on share markets to go up in order to achieve investment
gains (“directional” securities) “Kauri Units are “non-directional” instruments, which means that they are likely to out
perform other investments during volatile times.
Cowie said, “While we are understandably delighted at the initial performance of Kauri Notes, it is early days and we
well understand this rate of returns may not continue, but it is important to note that Kauri Income Units are primarily
designed to deliver regular returns above market rate, whatever the phase of the market cycle. The Savings & Loans Kauri Notes have demonstrated this can be done, even during a time of low investor confidence and with the
continued global ripples from the US sub-prime market to contend with”.
The Kauri Income Units are a security intended to provide investors with a quarterly coupon at a market return of 9.50%
and the potential of even greater returns upon redemption.
Kauri Income Units also feature a guarantee of interest on the first eight coupons.
Kauri Growth Units which have achieved an annualised return of 18.7% over the last 2 years, are a leveraged investment
in 6 Permal multi-manager funds, Kauri Growth Units also have a capital guarantee feature.
Savings & Loans Director Maurizio Piglia, a professional funds management and treasury operations manager with lengthy European
experience, has been instrumental in the development of the Kauri Units.
Mr Piglia said, “The inevitable cycle of investment and financial markets mean that in downturns and bear markets many
so-called ‘secure’ products that have ridden the upward cycle are exposed to losses. We have worked hard to develop
Kauri Units, which are not susceptible to the volatilities of the market yet will still deliver returns above market’s
averages in any circumstance, independent of the direction of these markets. Kauri Units can compare favourably against
anything currently distributed in New Zealand.”
The Kauri Units offer opened on 17 December 2007, with Funds being invested in Permal Funds each two months. The sixth
subscription will close on 28 October 2008.