McIvor's Landsolve turns white knight to Equititrust
McIvor's Landsolve turns white knight to Equititrust
Colin Kruger
Sydney Morning Herald
July 4, 2011
AILING Gold Coast mortgage fund operator, Equititrust, appears to have
found a novel solution to the
cash crisis that has left its flagship fund at the
mercy of its bankers.
Equititrust stands to be the beneficiary of a $200 million raising by a company that is
so closely aligned it shares Equititrust's address,
telephone number, and
founder,
Mark McIvor.
The McIvor-founded Landsolve Partners, which describes itself as a ''multi-disciplined finance and property funds management group'', plans to raise
$200 million via the
Landsolve Capital Solutions Fund.
''Our objective is to enable investors to
'live life to the fullest', through higher yield,'' Mr
McIvor says in the marketing blurb for Landsolve. ''The Landsolve Capital Solutions Fund aims to provide investors with competitive monthly income, together with capital stability,'' it says in the document.
The information memorandum for the Landsolve fund reports that investors' money will be invested in
''loans to managed investment schemes, including those
managed by the trustee,
the licensee …'' - a reference to Landsolve Partners and
Equititrust respectively.
Landsolve does
not hold an
Australian financial services licence, so
Equititrust will also
handle applications for the Landsolve fund,
mind the money, and
issue units on Landsolve's behalf.
Earlier this year, the Australian Securities and Investments Commission (ASIC) forced Equititrust to scuttle plans to raise $50 million to effectively bail out its flagship Equititrust Income Fund (EIF).
ASIC was concerned
about potential conflicts of interest with Equititrust representing investors on both sides of the loan.
EIF was one of $20 billion worth of investment schemes forced to freeze redemptions in 2008 after the government guaranteed bank deposits during the financial crisis.
Just weeks ago, Equititrust reported that Mr
McIvor had resigned from its board in recognition that there could be a future
''conflict of interest'' for the company acting as manager of the $240 million EIF, as well as advancing business proposals to investors.
''Mark is fully supportive of the restructured board and is excited about communicating directly with investors as to opportunities that may be available as they are formalised,'' Equititrust said at the time.
David Kennedy, who also stepped down from Equititrust's board, remains chief executive of the company and reports to the ''independent board of directors'', Equititrust says.
Neither Mr McIvor or Mr Kennedy was available for comment.
The Equititrust fund has yet to disclose the
extent of the loss to investors, who are no longer receiving income and have not been able to redeem their investment for more than two years.
Mr McIvor is managing director of Landsolve Partners and is also on the company's board. Landsolve's $200 million raising is targeting wholesale investors, with a minimum investment of $50,000. This
removes disclosure requirements that would be necessary if it were appealing to retail investors, as was the case for Equititrust's EIF.
Landsolve is also open to
using debt to inflate the fund's returns, despite
Mr McIvor being part of the management team at Equititrust that got burnt using similar leverage on EIF.
Mr
McIvor was part of the team that blamed the withdrawal of bank support for the continuing freeze on redemptions. More recently, income distributions to investors were stopped in order to pay down bank debt, which had priority.
Bank debt is one of several issues that led Equititrust's auditor to state in the company's 2010 financial accounts that there was
uncertainty regarding the group's continuation as a going concern.
http://www.smh.com.au/business/mciv...ite-knight-to-equititrust-20110703-1gxf4.html