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LM Investment Management - Lack of confidence

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This Trilogy Doc got sent to me today

Trilogy update - LM Currency Protected Australian Income Fund

With the end of the 2012 upon us, we felt it timely to provide an update in relation to the LM Currency Protected Australian Income Fund (‘Currency Protected Fund’ or ‘the Fund’) and outline the progress we have made to date in agitating for change on behalf of investors and our strategy for the New Year.

Through an Extraordinary General Meeting (the Meeting) on 1 November 2012, 69% of investors in the LM Wholesale First Mortgage Income Fund (Wholesale Fund) voted in favour of replacing LM Investment Management Limited (LM) with Trilogy Funds Management Limited (Trilogy) as Responsible Entity (RE).

Following our formal appointment on 16 November 2012, we have been working through the transition timetable set by LM as well establishing working relationships with the external auditor, the regulator and several of the investment platform providers who hold units in the Wholesale Fund on behalf of investors.

We remain committed to investors in the Currency Protected Fund

We believe that our appointment as RE of the Wholesale Fund confirms widespread investor support for a change in RE and we remain firmly committed to our strategy to bring about this change for concerned investors in the Currency Protected Fund and the LM First Mortgage Income Fund (First Mortgage Income Fund). We are currently considering our options around a suitable timeframe in the new calendar year.

It is pleasing to see that since the Meeting in November, LM has followed our lead and significantly reduced management fees for the Currency Protected Fund, Wholesale Fund and First Mortgage Income Fund. Investors in the Currency Fund will now save $3.1 million in management fees per year. LM also appears to have improved its communication with investors and advisers, providing more regular and more detailed updates.

Important issues for investors to consider
On behalf of investors in the Currency Protected Fund and Wholesale Fund, we continue to monitor LM’s management of the First Mortgage Income Fund. The recent release of the 30 June 2012 accounts for the First Mortgage Income Fund highlighted what we believe are important questions for investors to consider:

1. How did LM arrive at a unit price of 59 cents without obtaining any external independent valuations?

2. An asset held in the First Mortgage Income Fund, described as a ‘student accommodation property’ located in Cairns, was recently sold by LM for $3.85 million but we understand that the carrying value of the loan was more than $10 million. Why did LM allow the property to sell for such a huge loss?

3. It appears that the proceeds from the sale of a $40 million asset held in the First Mortgage Income Fund located near Wollongong, south of Sydney were used in part to repay loan(s) held in another LM managed investment scheme believed to be the LM Managed Performance Fund. Why was an unsecured creditor and related party repaid in priority to unpaid distributions and redemptions of investors?

4. Related scheme lending has increased to $60 million (as per the 30 June 2012 accounts for the First Mortgage Income Fund). Why has related scheme lending increased, further entangling the interests of First Mortgage Income Fund investors with other LM schemes such as the LM Managed Performance Fund?

These issues reinforce our view of the need for improved transparency in relation to the administration, management and performance of the fund. Like you we are focussed on achieving improved outcomes for investors in the Currency Protected Fund and look forward to working with you to achieve this in 2013. Until then we wish you a safe and happy Christmas.
 
Trilogy - Absolutely NO Confidence

Rodent69, thanks for that.
I haven't seen the Trilogy Doc yet, but they do take some time to get to me by post.
You can be sure it will be returned to them upon receipt, together with a short riposte. Why would they think I would be interested in a "Trilogy update - LM Currency Protected Australian Income Fund", to a fund over which they have no authority? Or is this a prelude to another attack on my already dwindling funds?

ASICK had already long ago convinced me of the folly of voting for Trilogy. Although I was quite prepared to replace LM as the RE, my voting sheet definately did not have a cross in the second box for Trilogy. I suspected that so many other CPAIF investors had shown a similar pattern, was the reason for the abandoned voting. Does the nature of the CPAIF investor profile mean that 'The Platforms' cannot swing this fund's vote and there is an inherent level of protection against the vultures waiting to pick our bones?
Does anything further need to be done to proctect the CPAIF fund, or perhaps I'm missing something here?
 
RODENT69 said:
... Until then we wish you a safe and happy Christmas.
Click to expand...

Trilogy took over the PFMF in July 2009, and for Xmas 2009, (from Trilogy), "The Board and staff of BalmainTRILOGY would like to wish you and your family a happy and safe Christmas."
(http://www.moneymagik.com/general_information.php - under the heading, "Christmas Cheer")

It was the first and LAST christmas greeting ever received from Trilogy - The fund has paid about $17m in fees to date and not even a "Merry Xmas Losers" from Trilogy.

**** Merry Xmas to ALL ****
 
Dear all -- happy new year. Guess which company has not paid the distributions before XMAS to investors that were mentioned in the recent hook up?

Also that company has a link on their website so that an investor can request a copy of the RG45 for the FMIF, I have requested it.

Also good old Trilogy has yet to advise Platforms of the new official Unit Price, nor have the posted the Audited WFMIF statements.

They did issue an updated version of their doc titled -LM Currency Protected Aust Incom Fund dated
18 Dec 2012
 
That Which is Unable to be Given

RODENT69 said:
Dear all -- happy new year. Guess which company has not paid the distributions before XMAS to investors that were mentioned in the recent hook up?

Also that company has a link on their website so that an investor can request a copy of the RG45 for the FMIF, I have requested it.

Also good old Trilogy has yet to advise Platforms of the new official Unit Price, nor have the posted the Audited WFMIF statements.

They did issue an updated version of their doc titled -LM Currency Protected Aust Incom Fund dated 18 Dec 2012
Click to expand...

*** Happy New Year ***

Rodent, I'm a little perplexed about these "distributions" - as I understand it, the "distributions" were accounted for some time ago, but as I see it, such "distributions" are only able to paid from current cash, cash which could only be described as a portion of capital, and could only be discribed as a capital return.

Correct me if I'm wrong, but the "distributions" were accounted for in a period of substantial loss, not profit, and therefore could only be described as a return of capital in any event (regardless of what term is actually used).

I'm always puzzled as to why investors hang onto the idea of receiving distributions (of profit) when there is simply no profit (regardless of whether such distributions are promised or even hinted at by a manager).

No one is able to give that which is unable to be given (and that includes Trilogy).

http://www.moneymagik.com/litigation.php
http://www.moneymagik.com/yardy_yardy_yah.php

Re: Trilogy not furnishing the 2012 Wholesale fund accounts - at a guess, I wouldn't be surprised if Trilogy blames LM - so it goes.

LM update: http://www.lmaustralia.com/Downloads/Trilogy-Article/trilogy-facts-dec-12.aspx
 
Bad News?

Bad News?

This is bad news:-http://equititrust.com.au/Pdfs/Receiver/Receivers Reports - 20130104 - 10th Report to Investors.pdf
9 November 2012, estimated unit price between $0.15 - $0.22 per unit, revised as at 31 December 2012 (less than 2 months) to between $0.11 - $0.19 per unit, "primarily due to a revision of the estimated vatues of certain property securities (based on offers received being less than the professional vatuations held) and the accrual of outstanding rates and land tax."
This is bad news too:-
http://www.moneymagik.com/yardy_yardy_yah.php - fund value dropped from $273m to $117m in one year !
 
The PFMF's security assets at Wakerley ("Woodgrove")

Seeing Trilogy is so concerned about getting to the bottom of the LM sale in Cairns, I wonder if Trilogy will be so keen to disclose to investors in the PFMF the outcome for the fund's security assets at Wakerley ("Woodgrove")?

Andrew Griffin (Information Sessions 2010/2011), "So I guess we now come to the final part which is the future of your fund. There are only limited strategies available in relation to the assets of your fund. Leaving aside Martha Cove for a moment, in respect of the other remaining assets of the fund, they can either be sold as is, which is akin to a fire sale, which we've undertaken not to, or they can be improved in value, by us, to the maximum extent possible prior to a sale to an investor or a developer. I've already discussed the types of work we do to maximize value, but let me summarise again by saying that we will improve these assets right up to the point where an investor or developer will pay the maximum possible price for each asset which returns the greatest capital value to you, the investor. Specifically, we will procure valuable rezoning or development approvals prior to the sale of vacant unimproved vacant land. We will complete developments to enable the sale of completed product rather than selling assets to developers for them to make their development profits from your fund. And finally, once complete, we will sell the finished stock to individual owners occupiers and investors to try and maximize returns to unitholders. Perhaps this slide will explain a little better what we're doing. We are taking the current assets of the fund and trying to improve them to the greatest extent possible before development would commence on the site. We are not taking them beyond that level, but as soon as we've managed to increase the value from .. rezoning or development consent. Once we've maximized the value, we will then sell the site to the open market. We are of the firm view that this is the best strategy in respect of these assets to recover the greatest value for you while minimizing additional expenses"

http://moneymagik.com/wakerley_2_sep_2009.php
http://moneymagik.com/wakerley_1_may_2010.php
http://moneymagik.com/wakerley_pictures_01_11_12.php

Read the latest at: http://www.moneymagik.com/
 
Seems a couple of small distributions have been made to investors as per advice provided in teleconference in December.

Has anyone seen an RG45 yet?
 
Irishdan said:
Seems a couple of small distributions have been made to investors as per advice provided in teleconference in December.

Has anyone seen an RG45 yet?
Click to expand...

Irish Dan I have not had any distributions yet (Asgard) I applied in writing to LM on 8th Jan for the RG45 LM says available ONLY as post to Investors, it should be here by today? will advise when I receive it
 
"An Inquiring Mind"

Irishdan said:
Seems a couple of small distributions have been made to investors as per advice provided in teleconference in December.

Has anyone seen an RG45 yet?
Click to expand...

Good morning IrishDan.

"Seems"? No money in your bank account yet?
If you don't mind, is the "distribution" taxable (as income), or is it, in fact, a capital distribution?
 
Re: "An Inquiring Mind"

ASICK said:
Good morning IrishDan.

"Seems"? No money in your bank account yet?
If you don't mind, is the "distribution" taxable (as income), or is it, in fact, a capital distribution?
Click to expand...

Hi Asick,

A client of mine received 2 distributions in Dec but I have not received copies of the statements from him yet to see how LM have classified them. In the phone hookup with LM Francene Mulder said that they were paying "catch up" distributions in Dec so I would think they will be "income" rather than a return of capital
 
Hi,,

This is my first post. I invested into the Currency Protected Fund on the advice of a NZ based financial advisor. Fortunately it wasn't enough to cripple or impact significantly on my future as it was 20% of one year's gross salary. in many ways the situation has a silver lining in the fact that I now manage all of my own investments and will never employ a financial advisor ever again: or invest in Gold Coast Property!

From reading far better informed individuals with greater understanding of investments and mortgage funds, i would like to summarize the trail.

There was a world financial crisis which affected property developments.

As borrowers were not able to repay the lent funds ,LM took over the properties in default and managed them, closed the fund, waiting for the market to improve

LM then gorged on the closed fund with high fees and used delaying tactics to keep the funds closed so they could collect the fees.

Trilogy forced LM's hand into action by attempting to take over the funds so properties are now being sold by LM to return capital to investors.

LM is bad but Trilogy is worse so it is better to stick with the devil you know.ASICK alledgedly got completely shafted by Trilogy and has informed us with his insight and knowledge of the likely turn of events based on his previous experiences.

The fund assets have been valued at a unit price of 59cents but we have to wait for the market to see what the actual price is. The recent low price for the Cairns University Hostel would imply that the 59 cent value is over inflated.

There is nothing we as investors can do but wait for the return of capital over the next 2-3 years and pray our losses aren't too great.

Is there anything else to be done?
 
For information of other investors. This is the latest Info I have received regarding the RG45

Quote from LM - Further to our telephone conversation, I have asked for an update regarding the distribution of the RG45. I have been advised they have to go via the mailhouse and we expect you will receive it in the mail next week.
 
PFMF Asset at Wakerley ("Woodgrove")

ASICK said:
http://www.moneymagik.com/yardy_yardy_yah.php
http://www.moneymagik.com/general_information.php
http://www.moneymagik.com/litigation.php

facts, dear sht4branes, facts.
Click to expand...

Well, the remainder of the PFMF's asset at Wakerley has been sold.
http://www.realestate.com.au/property-residential+land-qld-wakerley-200441151

(background:
http://moneymagik.com/wakerley_2_sep_2009.php
http://moneymagik.com/wakerley_1_may_2010.php
http://moneymagik.com/wakerley_pictures_01_11_12.php)

It must have been a real nice little earner for Trilogy & BT and the receiver for these last three years. Just sitting there idle for all that time.

Here's what the advertisement (above, and in part) had to say, "This is an ideal opportunity for a small developer or builder to take advantage of the limited supply of stock in this location"

Remember, this is what Trilogy (at the investor sessions) said it would do, ""So I guess we now come to the final part which is the future of your fund. There are only limited strategies available in relation to the assets of your fund. Leaving aside Martha Cove for a moment, in respect of the other remaining assets of the fund, they can either be sold as is, which is akin to a fire sale, which we've undertaken not to, or they can be improved in value, by us, to the maximum extent possible prior to a sale to an investor or a developer. I've already discussed the types of work we do to maximize value, but let me summarise again by saying that we will improve these assets right up to the point where an investor or developer will pay the maximum possible price for each asset which returns the greatest capital value to you, the investor. Specifically, we will procure valuable rezoning or development approvals prior to the sale of vacant unimproved vacant land. We will complete developments to enable the sale of completed product rather than selling assets to developers for them to make their development profits from your fund. And finally, once complete, we will sell the finished stock to individual owners occupiers and investors to try and maximize returns to unitholders. Perhaps this slide will explain a little better what we're doing. We are taking the current assets of the fund and trying to improve them to the greatest extent possible before development would commence on the site. We are not taking them beyond that level, but as soon as we've managed to increase the value from .. rezoning or development consent. Once we've maximized the value, we will then sell the site to the open market. We are of the firm view that this is the best strategy in respect of these assets to recover the greatest value for you while minimizing additional expenses"

Oh .. yeah ! Praise be to Trilogy !

Here's what the EOI (in part) said (http://moneymagik.com/moss_road_information_memorandum.pdf)
"Foxwood is pleased to offer for sale Lot 500 on SP 241869 on behalf of 57 Moss Road Pty Ltd (Receivers Appointed) (In Liquidation).
The offer presents the opportunity to acquire an outstanding residential site in the Brisbane suburb of Wakerley.
Prominent features of the site include:
• Located in the established and developing Brisbane residential suburb of Wakerley.
• The lot is incorporated within the ‘Woodgrove’ master-planned community.
• Existing residential use.
• Excellent connectivity to all major nearby attractions and infrastructure.
• Take advantage of substantial commencement of the estate.
• Receiver appointed, must be sold."

Geez, you'd nearly get the idea that a receiver had just been appointed, but that's be a tad misleading - a receiver was appointed years ago !

Look at all the benefits, and then also note the comment about the "limited supply of stock" in the area spoken to in the (above) advertisement.

Then go back and take a look at Griffin's spruik from the information sessions (above).

Yes, the remainer of stages 2 & 3 is in the middle of a built up area of quite attractive homes (just have a look with google street view).

And yet, the whole shooting match is rumoured to have been knocked off for just (about) $4.2m after sitting idle for THREE AND A HALF YEARS! The slabs, the weather-beaten frames, and the torn sarking - all sat there for over three and a half years while Trilogy and the receiver made $$$$$ with nothing coming to investors. For three and a half years!!!

Given Trilogy concern over sale of the small LM fund asset at Cairns, what I'd like to know is:

1. What was the loan value relating to the PFMF's asset at Wakerley (known as "Woodgrove") as at 30 June 2009, 30 June 2010, and 30 June 2011?
2. When did construction commence for the completion of stage 1 (together with a few of the houses in one of the other two stages, 2 & 3)?
3. What was the total amount recovered prior to the recent sale of what remained of stages 2 and 3?
4. What was the amount recovered from the sale of what remained of stages 2 and 3 (that is, the sale in December 2012)?
5. What the net amount (on the complete asset - stages 1, 2, and 3) recovered by the fund.
6. How much was the total amount paid to the receiver/s (from date of appointment to date of sale in December 2012).
7. How much did Trilogy draw on fees in relation to the complete loan (from July 2009 to date of sale in December 2012).

My guess is that investors in the PFMF suffered a MASSIVE loss at Wakerley - a loss which would make the loss at Cairns puny by comparison, yet Trilogy speaks not one word of it.

Hypocracy - http://en.wikipedia.org/wiki/Hypocrisy

Ah, Trilogy - you've done it again!
 
Trilogy & a Do-or-Die Pusche?

Irishdan said:
And another one...

http://www.couriermail.com.au/news/...uffer-big-losses/story-e6freonx-1226558166641
Click to expand...

Yep ... I heard about that one on the radio this afternoon - oh well, receivers (or whatever) will do well.

Now twenty-one days into the new year and no pusche from Trilogy for the LM FMIF - there's so many rumours running around that it makes a listerner's head spin.

I think Trilogy's not in a good position - the PFMF is sinking in value, ergo a falling income stream to Trilogy - at least from the LM side, there's not much of an income in the LM fund Trilogy took over (about $350k) - it really could be that if Trilogy makes a run for the LM FMIF, it just might be a do-or-die effort if Trilogy's income stream is drying up.

The harder the pusche, the higher the cost.

Is Trilogy about to fall?
 

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