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SMSF Awards 2016: Innovator winner

Employing a multiple portfolio approach to property investment has allowed fractional investment platform DomaCom to present a unique alternative for advisers and trustees seeking to gain access to Australia’s property market.

By fractionalising the ownership, DomaCom’s platform allows multiple investors to purchase a property, enjoy a share of the rental income and the future capital value in proportion to the amount they contribute towards the purchase price.

“We’re providing the financial advice and SMSF community a method to effectively deliver asset allocation for direct property in a way they would normally do with equities,” DomaCom chief executive Arthur Naoumidis explains.

Naoumidis believes one of the key strengths of the platform over the past 12 months has been its licensing, particularly as a lot more advisers start to use DomaCom across the country to deliver direct property exposure to their clients.

“Some of the innovations we’ve had over the last 12 months include portfolio book-builds,” he says.

“That’s a good example of where the advisers are creating a portfolio of properties, tracking different strategies and acquiring more growth.”

A significant milestone for DomaCom was its successful crowdfunding campaign regarding the ownership of Kidman Station, an agricultural asset and the largest private land holding in Australia.

The bid attracted initial interest from 5000 local retail investors and more than $70 million was pledged in the space of three months.

This was followed by a crowdfunding campaign for the renovated properties of reality television show The Block in August.

“While we provide an advice solution for advisers, we’ve now switched off the general advice licence within DomaCom and we will look at directly participating in more public crowdfunding campaigns like Kidman Station in the near future,” Naoumidis says.

While the group’s current focus is its core product of fractional property investing, DomaCom has been looking to diversify its overall suite and has been collaborating with ASIC over the past three years on a small home equity release.

The new offering will be aimed primarily at baby boomers seeking to supplement their income by taking out a fraction of the equity within their home.

“It’s effectively solving the demographic problem of that age group running out of capital, but at the same time providing the next generation with exposure to direct property by allowing them to have that equity release,” Naoumidis says.

DomaCom will also look to introduce institutional corporate bonds to its core suite over the next 12 to 18 months via a model portfolio that will adopt a similar fractional investing approach.

“Our whole core model is really about fractionalising digital assets. Property was essentially the first asset class for us and the second one is corporate bonds,” Naoumidis says.

“The reason why we think it will be attractive to our clients is that most of our advisers that use DomaCom are equities advisers. Before it was only available to sophisticated investors or private high net wealth individuals, now everyone can have a corporate bond portfolio.”

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