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Babcock & Brown Direct Investment Fund
Limited (DIF) will deliver a diversified
portfolio of unlisted alternative assets to institutional
superannuation funds, with an ease of
access/exit and liquidity not normally
associated with unlisted mandates.
DIF has been established to provide enhanced investor access to
unlisted alternative assets. DIF is the Trustee, Responsible Entity and Management Company for discrete, unitised trusts
designed to hold a portfolio of Direct Investment assets diversified by geography, sector, and maturity profile.
These assets are sourced by DIF primarily, though not exclusively, through its preferred access to the Babcock &
Brown (B&B) global deal stream.
Table: Business structure
| Parent Company | Babcock & Brown Pty Limited | B&B | |
| Responsible Entity | Babcock & Brown Direct Investment Fund Limited | DIF | 224315 |
| Brand | Babcock & Brown Direct Investment Fund | Fund | |
| Constituent Trusts | DIF I Direct Investment Fund Equity Trust | DIF I | 103 310 407 |
| | DIF II Direct Investment Fund Mezzanine Debt Trust | DIF II | 103 309 780 |
| | DIF III Global CoInvestment Fund | DIF III | Cayman GP |
DIF is a partnership investor in global situational anomalies from which B&B/DIF have
identified ways of extracting value that may not have been immediately obvious to other
institutional investors. Accordingly, DIF will not be restricted to any narrowly defined
alternative investment sub-category such as venture capital, private equity assets, infrastructure
or direct property. DIF is open to investing across the full spectrum of unlisted asset opportunity ... as long as the proposed asset is expected to deliver 'private equity like' returns.
DIF has preferred access to the broad range of B&B's principal investment activity globally. This access has effectively overcome the long-standing private equity problem of slow draw-down on committed monies.
Under all circumstances, the final investment decision always lies with DIF's
Chief Investment Officers and Investment Committee. Note that DIF has also adopted a number of unique Unit Holder protection mechanisms:
- DIF management will focus on the delivery of constructed liquidity deriving from diversification
across geography, asset category sub-sectors, and maturity profile.
- DIF will drive all investment analysis and
decision making, including deal sourcing, credit analysis, portfolio construction and
management, diversification and liquidity management.
- DIF's Compliance Committee will apply a veto to any asset acquisition proposals that present conflict-of-interest risk.
- Assets will be re-valued at least once annually under the terms of a valuation
contract, currently assigned to KPMG Corporate Finance.
- Currency exposure in DIF I and DIF II will be hedged as fully as practicable back to $A. Derivatives are likely to be used to hedge currency and interest rate risks (subject to provisions of DIF's Risk Management Statement).
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