# Calling all Macquarie Equinox Asia & Asia 2 investors…



## Herbie Hancock (26 March 2013)

Macquarie still has redemption suspensions in place on both Trusts due to “illiquid assets,” yet according to the December 2012 Quarterly Report the “illiquid assets” make up only 3 – 4% of the total assets of these two assets. 
On top of this, both Trusts have unit prices of around $1.15.
Macquarie is well overdue to offer liquidity to investors in these Trusts or at a minimum a material distribution. They are probably dragging their feet because of the interest they are receiving on the big loan book attached to these Trusts as most people geared into them. 
The March Quarterly will be out soon. If the number are positive again investors should demand liquidity in June!


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## TheShakerMaker (27 March 2013)

The problem with this investment and others like it is the capital protected nature of the investment. During periods of volatility where the NAV may fall under the issue price is that Macquarie will divert funds into cash so they are not exposed to making up the shortfall. 

So in this case the Macq Equincox Asia product has 62% of funds invested in cash. Thats right only 38% of funds are invested in the underlying hedge funds with exposure to ASIA. The remaiming would be sitting in Macquarie inhouse treasury accounts. There is no incentive for Macquarie to change this as they continue to earn lucrative management fees and earn money off the loan book that they advanced investors. Would hate to see how many Macq Wealth Advisers have tipped their clients into these products. And we all know Macq Wealths track record with compliance and ASIC.

Avoid such capital protected products like the plague. You will get better returns from a term deposit.


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## Unhappy (12 April 2013)

Herbie - you are exactly right. Macquarie has no incentive to offer liquidity on these funds when it has geared investors locked in paying 7.5%. I've been trying to get out since 2008 and it is outrageous that they can keep investors locked in and paying interest for almost 5 years now, particularly when such a small percentage of the underlying funds are still illiquid.

I haven't paid the interest for two years now and they're chasing me for it. Is anyone else out there feeling my pain? Is this class action law suit material?


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## TheShakerMaker (15 April 2013)

Unhappy said:


> Herbie - you are exactly right. Macquarie has no incentive to offer liquidity on these funds when it has geared investors locked in paying 7.5%. I've been trying to get out since 2008 and it is outrageous that they can keep investors locked in and paying interest for almost 5 years now, particularly when such a small percentage of the underlying funds are still illiquid.
> 
> I haven't paid the interest for two years now and they're chasing me for it. Is anyone else out there feeling my pain? Is this class action law suit material?




Have Macq threatened any debt collection proceedings due to your non payment of interest? Also have you had much dialogue with them about redeeming out?


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## TheShakerMaker (15 April 2013)

Unhappy said:


> Herbie - you are exactly right. Macquarie has no incentive to offer liquidity on these funds when it has geared investors locked in paying 7.5%. I've been trying to get out since 2008 and it is outrageous that they can keep investors locked in and paying interest for almost 5 years now, particularly when such a small percentage of the underlying funds are still illiquid.
> 
> I haven't paid the interest for two years now and they're chasing me for it. Is anyone else out there feeling my pain? Is this class action law suit material?




Whats also criminal is that while several asian markets are going gangbusters the fund is mostly invested in cash. The product should be called the Equinox Cash Fund bcuase most of the money is parked in Macq treasury accounts. 

I am in the middle of robust communication with them. Question is has the RE breached its fiducary duty in the way the funds have been managed. Anyone on the forum an expert in this area?


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## Big Mal (16 April 2013)

I am also a long suffering unitholder in this fund since inception sucked into it as shareholder of Macquarie. They won't properly deal with complaints I've raised plenty about lack of updated information , the NAV value wasn;t updated on the web site since December 2012 now we have the March value but nothing in between.
I've written to ASIC who are useless and recently tried to get a response by the auditor that they actually validate the claims of the RE relating to illiquid investments, they firstly refused but relented.
The problem I see is the unitholders have no rights, the RE was asked to hold a unitholder meeting to put it to the investors that the fund be closed early as most of the funds were in cash, needless to say they wouldn't tell me where they were held or what interest rate we were attracting. My recent contact asked if advisors were still receiving trailing commissions which they are even though it is frozen so maybe ask your advisor for a rebate.
As for a class action I'd love to get some advice but am not sure where to turn, the regulators don't care and come time to redeem these units in 2014 I'm concerned all we'll achieve is the capital protected component as I notice one of there other funds recently did this. My area of complaint is the PDS does not outline much at all about illiquidity, the RE does not comply with the record keeping required in the PDS relating to reporting, I even pointed out on one occasion that the rate of illiquidity they quoted was incorrect being later amended.
The other issue is the inbred nature of this fund with all entities MQG related from banker to risk advisor to RE, trustee the list goes on, in view of the hardship we have all experienced we should be getting better service than this. The previous partial release also severely disadvantaged MQG borrowers as they applied penalties to the fund to participate which was not disclosed in the lending document.


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## Unhappy (17 April 2013)

TheShakerMaker said:


> Have Macq threatened any debt collection proceedings due to your non payment of interest? Also have you had much dialogue with them about redeeming out?




Totally agree. Yes I have had plenty of dialogue with them about trying to get out, and they have been threatening collection proceedings for the interest. I've also had a frustrating dialogue with the Financial Ombudsman which I'd be happy to fill you in on. I'm now in the process of getting some class action advice.

I agree with Big Mal below that the illiquidity warnings in the PDS are pathetically inadequate - in fact that is my main gripe and I think the main thing that Macquarie has to answer for. Another amazing fact that I found out recently is that under the terms of the deferred purchase agreement between the fund and Macquarie (the mechanism which enables them to give the capital protection), they are not allowed to allow ANY redemptions as long as ANY of the underlying funds are illiquid. So even if only 1% of the underlying investments are illiquid (which is not far from where Asia 2 is with 4% illiquid), investors are locked in. Where the hell is that disclosed in the PDS?

Great to hear there are some others out there going through the same frustrations I am - would be happy to put our heads together to work out how best to benefit from our respective dealings with them. Would anyone be interested in getting in touch?


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## Herbie Hancock (17 April 2013)

Shaker, Mal, Unhappy - thanks for your comments. I have some experience with these matters in relation to Responsible Entity Law, ASIC, the Financial Ombudsman Service and Class Actions. 

ASIC - don't even bother with them. As you have found Mal they do not have the required expertise to even work out what is going on inside the product and therefore there is no hope of them coming to the aid of investors. They always shut once the horse has bolted. 

There are numerous potential violations by the RE (who is supposed to act in the best interests of investors) in relation to disclosure and its pathetic management of the abundant conflicts between the related Macquarie entities.  The challenge is making the RE accountable. Any individual litigant would be sent broke trying to get justice given Macquarie's financial and legal resources. A class action also seems difficult to me. Most of the Litigation funders won't get out of bed unless there is a $30million claim and then they will take 30 - 40% of any compensation. Also what is our loss? At this stage is just interest paid. It would be difficult to get their interest. 

I have heard of some success with the Financial Ombusman - UNhappy please share your experience  

So in my view the best way out is to demand  liquidity in June. THe problem that needs to be solved is the illiquid components. This can be solved in two ways 1) Macquarie to get of their **** and sell the illiquid funds at a discount on international markets to a vulture fund. There will be a minimal loss to investors here because the illiquid components are so small. 2) Macquarie to buy the illiquid funds and hold them on their balance sheet until maturity. Least they can do for the disaster which they have subjected us to.

Either 1 or 2 will remove the illiquid funds and allow for liquidity and redemptions in June (Unhappy they will get all the interest owed plus penalties out of the redemption proceeds). Mal, Unhapy, Shaker please strongly  consider  formally writing to macquarie asap and demanding 1 & 2 happen by June. THe more pressure the better.

I think the only way home is to redeem asap to stop paying the interest. Any other angle looks to have limited changes of success. We will just have to redeem, take our medicine and know not to deal with this organisation again.


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## Herbie Hancock (17 April 2013)

Also regarding the request for liquidity from Macquarie - it must be for all investors to redeem not just us. The law prevents the RE from offering liquidity to some investors and not all investors at the same time. There will be no success trying to get one off liquidity agreements so we must seek it on behalf of all investors in June!!


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## Unhappy (18 April 2013)

Thanks Herbie. I'm totally on board with writing to them demanding liquidity in June. And I agree with the two options you state as ways for MQG to get investors out of this mess - both of which I would have thought would be palatable to Macquarie - particularly compared to the brand damage to them if a big fuss was made over this through the courts etc. I just don't know if a few letters from investors will be enough to convince them to do it in the absence of a more co-ordinated approach.

You may be right with your assessment of the challenges of class actions, but I'm already talking to a class action firm who, at least from first pass, think it could have legs, although admittedly without yet having an idea of total size of claim. You're right though, I assume our loss would be limited to the interest that we've had to pay since we've wanted to get out, which in my case is basically from the time redemptions were suspended. I assume that would add up to a reasonable claim size though across all locked in investors across all Equinox funds - 5 years at 7.5%pa. At least enough to make Macquarie think seriously about doing something to solve the remaining underlying illiquidity issue. For the record, without going into detail, the lawyer is aware of other litigation being commenced against Macquarie over this and/or similar funds.

The Ombudsman was useless. I prepared detailed analyses of the PDS requirements under the Corps Law and ASIC Policy Statements, going line by line through the requirements and discussing why the Equinox PDS did not comply. I got, in my view, in ill-considered and generic ruling basically saying that I should have sought my own financial advice rather than relying on my interpretation of the PDS. It contained no discussion of whether and how the PDS complied with the law and ASIC policy statement - very frustrating. Unfortunately, at the time i wasn't aware of the fact that MQG can suspend all redemptions as long as there's ANY underlying illiquidity, (again, where was that disclosed?) so I did not include that in my case to the Ombudsman. And now that they've ruled, there's no right of review/addendum/further discussion.

So to summarise, i don't disagree with anything that you've said, but think it might be worth getting a read from a couple of class action firms on their preparedness to run something.


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## Big Mal (18 April 2013)

Herbie Hancock said:


> Also regarding the request for liquidity from Macquarie - it must be for all investors to redeem not just us. The law prevents the RE from offering liquidity to some investors and not all investors at the same time. There will be no success trying to get one off liquidity agreements so we must seek it on behalf of all investors in June!!




We should also seek a dividend or distribution from the profit component held in the fund as promised in the original PDS as illiquidity doesn't preclude this, it appears once they declare an "illiquidity component" with ASIC there are protections for the RE to protect them form action for freezing the fund it also seems that there is no follow up from ASIC to confirm this on an ongoing basis which is wrong and something I was trying to get the auditor involved in as their auditing statement for 30/6/2012 makes no mention of any illiquidity validation, in short we're at the mercy of the RE and MQG. Any class action would need to show a defective PDS, conflicted interests of the various MQG interests involved in this mess also noting the reason why the RE was changed not long after the fund was established was never truly identified to us, our loss at not being able to use these funds elsewhere and being locked into investment loans that we don't want to remain in due to the lack of performance of the fund which is abysmal and certianly not reflective of what the PDS outlined.
The other issue I canvassed with the RE without luck was for them to call a unitholder meeting which they declined, I could buy the unitholder client contact base and seek a meeting myself as I contemplated asking for the RE to be replaced due to the conflicts of interest which is our right. I'll assist with any class action and confirm again that ASIC and the Financial Ombudsmans Office are useless they only ever want to mediate an issue between parties and cannot provide compensation above very small amounts, they are also funded by, you guessed it the very people that are complained about. The only way for change is bad publicity or class actions, I wrote to Stephen Mayne who wrote about this fund some years ago, it was interesting he had a similar issue with the Macquare Fortress Fund maybe he can do an update that might flush out some more unhappy campers as I don't believe they will do anything unless hundreds if not thousands make it an issue, that said there are more than just this fund that are frozen and poorly performed have a look at the web site it must involve hundreds of millions of $ if not more, it could hurt them big time.


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## Herbie Hancock (23 April 2013)

yes a dividend or distribution at a minimum or at best full liquidity in June. i think writing to them demanding liquidity with the threat of a class action or other legal action in the background should see some type of movement from Macquarie. I have started some dialogue with Mac demanding liquidity in June or further legal action will be taken. I have given them the two options - either sell illiquid funds to a vulture fund or mac buy the funds themselves. this will provide total liquidity in june. They replied that they are investigating a sale to a vulture fund with their lawyers and will update in two weeks. A couple more letters in with the same flavour (liquidity in june or legal action) may get this over the line. Once we are out and no longer paying interest we can assess legal action further.


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## Big Mal (3 May 2013)

Herbie Hancock said:


> yes a dividend or distribution at a minimum or at best full liquidity in June. i think writing to them demanding liquidity with the threat of a class action or other legal action in the background should see some type of movement from Macquarie. I have started some dialogue with Mac demanding liquidity in June or further legal action will be taken. I have given them the two options - either sell illiquid funds to a vulture fund or mac buy the funds themselves. this will provide total liquidity in june. They replied that they are investigating a sale to a vulture fund with their lawyers and will update in two weeks. A couple more letters in with the same flavour (liquidity in june or legal action) may get this over the line. Once we are out and no longer paying interest we can assess legal action further.




I've now written to Macquarie requesting a dividend reiterating that there is growing unease amongst unitholders at how this fund has been managed and how we have been collectively treated contemplating further action, see what happens.


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## Big Mal (13 May 2013)

Big Mal said:


> I've now written to Macquarie requesting a dividend reiterating that there is growing unease amongst unitholders at how this fund has been managed and how we have been collectively treated contemplating further action, see what happens.




Has anyone seen the removal of suspension notice on the web site dated 3/5/2013 to take effect 28/6/2013, any thoughts would be appreciated.


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## Herbie Hancock (15 May 2013)

Big Mal said:


> Has anyone seen the removal of suspension notice on the web site dated 3/5/2013 to take effect 28/6/2013, any thoughts would be appreciated.




yes myself and another unit holder have been pressuring them too. Now that liquidity is on hand i am getting out asap. I will submit my redemption request immediately. Note cut for the redemption is 21st of May so need to get forms in asap.


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## TheShakerMaker (15 May 2013)

Herbie Hancock said:


> yes myself and another unit holder have been pressuring them too. Now that liquidity is on hand i am getting out asap. I will submit my redemption request immediately. Note cut for the redemption is 21st of May so need to get forms in asap.




I have been in some heated dialogue with them for the last few weeks. After presenting them with some soul searching questions they had been advising that their legal team were in the middle of deciding on redemption options. They advised they would have an answer for me within two weeks which was around now.

I followed them up today and low and behold they advised that a redemption letter had been sent in the mail and provided me with a copy. I have since moved from the address they had registered so I didnt receive it via snail mail.

As Herbie Hancock mentioned, I will be filling out and submitting ASAP.


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## Bort (15 May 2013)

I've just finished Greg Smith's why I left Wall Street. One of his comments was the more complicated, protected and the more guarantees and investment had the less likely there would be s good result for the investors. Looks like another one of these 'guaranteed' products has struck again. Good luck!


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## Big Mal (2 July 2013)

TheShakerMaker said:


> I have been in some heated dialogue with them for the last few weeks. After presenting them with some soul searching questions they had been advising that their legal team were in the middle of deciding on redemption options. They advised they would have an answer for me within two weeks which was around now.
> 
> I followed them up today and low and behold they advised that a redemption letter had been sent in the mail and provided me with a copy. I have since moved from the address they had registered so I didnt receive it via snail mail.
> 
> As Herbie Hancock mentioned, I will be filling out and submitting ASAP.




Is anybody else confused by Macquarie now saying funds are still 6 weeks away even though the written advice conflicts this?


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## TDGDESIGN (30 September 2013)

Hello. We have had the same problems as you have outlined above. 
We have recently accepted the redemption offer but Macquarie accidentally overpaid us by around $4K. We don't want to pay it back. We have taken the matter to the FOS. I consider it ample compensation for a pathetic fund, badly managed and badly communicated. the only money made was by Macquarie Bank.
Like most here, we were fully geared and it cost us well over $27K to get back just over $5K.

They have just called me and said I need to take action against the Adviser (Freeman Fox) not Macquarie.

They still want the money back.

Does anyone have any advice?


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## thematictrader (30 October 2013)

Herbie Hancock said:


> yes a dividend or distribution at a minimum or at best full liquidity in June. i think writing to them demanding liquidity with the threat of a class action or other legal action in the background should see some type of movement from Macquarie. I have started some dialogue with Mac demanding liquidity in June or further legal action will be taken. I have given them the two options - either sell illiquid funds to a vulture fund or mac buy the funds themselves. this will provide total liquidity in june. They replied that they are investigating a sale to a vulture fund with their lawyers and will update in two weeks. A couple more letters in with the same flavour (liquidity in june or legal action) may get this over the line. Once we are out and no longer paying interest we can assess legal action further.




Hi its october...was wandering if anyone has started or wants to join in legal action.

They did many things wrong

1) sold a product with about 14% annual breakeven ( 7.75 + 4-5% fees + 2-4% hedge fund fees etc etc)

2) did not try and offset cash amounts with loans to reduce borrowers interest as an offset account

3) Harbinger hedge fund was in trouble at launch. Wander if they got kickbacks from them

4) They did not declare underlying hedge fund fees clearly

5) They should have allowed partial redemptions. Even mortgage funds that could not sell buildings like colonial
    offered liquidity within 2 years
6) ASIC found 80% of their private bankers non compliant and are on an undertaking

Have spoken to two class action firms and they are interested if big enough group. Please advise how many interested


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## Big Mal (14 January 2014)

thematictrader said:


> Hi its october...was wandering if anyone has started or wants to join in legal action.
> 
> They did many things wrong
> 
> ...



Yes I am more than interested in joining any legal action, these funds were sold initially to me as a shareholder of Macquarie and when it got difficult Macquarie backed away, there has been so many things that have affected these funds such as the inbred nature of Macquarie controlling every aspect of the fund from RE right down to trustee and banker, when they converted the funds to cash and placed them on term deposit I requested details of where they were placed and at what rate, they declined saying it was "in confidence" how do we know they weren't propping up their treasury at a super low rate?
I also tried to get confirmation from the auditor that they tested the illiquidity claims made by Macquarie which was the initial basis that secured them relief from ASIC in 2007/8, they have refused to co operate so there is a bigger story here, I to was overpaid by about a $1000 I told them to jump and haven't heard back.


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## Unhappy (3 April 2014)

Big Mal said:


> Yes I am more than interested in joining any legal action, these funds were sold initially to me as a shareholder of Macquarie and when it got difficult Macquarie backed away, there has been so many things that have affected these funds such as the inbred nature of Macquarie controlling every aspect of the fund from RE right down to trustee and banker, when they converted the funds to cash and placed them on term deposit I requested details of where they were placed and at what rate, they declined saying it was "in confidence" how do we know they weren't propping up their treasury at a super low rate?
> I also tried to get confirmation from the auditor that they tested the illiquidity claims made by Macquarie which was the initial basis that secured them relief from ASIC in 2007/8, they have refused to co operate so there is a bigger story here, I to was overpaid by about a $1000 I told them to jump and haven't heard back.




Has anyone progressed anything on this front? I'm currently getting some legal advice from the firm running the case discussed in the attached article in the SMH earlier this week. Another Macquarie fund, another example of a very high (but not clearly disclosed) break even point.

http://www.smh.com.au/business/west...ial-advice-debate-to-mind-20140330-35rsy.html 

Please let me know if anyone is interested in potentially joining a legal action.


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## Nice Guy (22 August 2014)

I was wondering if anyone has taken legal action or has had any further corrsepondence with Macquarie regarding the Equniox funds?


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