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LM Investment Management - Lack of confidence

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We Can Help Each Other

RODENT69 said:
ASICK best I can do is this - on ad it says Scott Gray-Spencer 0400 222 226,
Level 32 Rialto Tower 525 Collins st Melb - Scott Callow - Mobile 0418153606 the add is under a heading , with other property's CBRE is the Estate Agent -their web site is - cbre.com.au EOI close 13 March 2013
Click to expand...

Thank you very much Rodent - a great example of inter-fund co-operation. I found the ad on CBRE's website and linked it here:
http://www.moneymagik.com/
 
Re: We Can Help Each Other

ASICK said:
Thank you very much Rodent - a great example of inter-fund co-operation. I found the ad on CBRE's website and linked it here:
http://www.moneymagik.com/
Click to expand...

That land may be a security for the CBA (re: City Pacific Limited JV with Indigo Pacific secured by Westpac) --- not sure yet. At this time it seems the land doesn't belong to the fund. I'll post any updates.
 
Re: LM - I've come in late hear

ASICK said:
That land may be a security for the CBA (re: City Pacific Limited JV with Indigo Pacific secured by Westpac) --- not sure yet. At this time it seems the land doesn't belong to the fund. I'll post any updates.
Click to expand...

ASICK said:
Thank you very much Rodent - a great example of inter-fund co-operation. I found the ad on CBRE's website and linked it here:
http://www.moneymagik.com/
Click to expand...

Sorry to proably bring up subjects that you guys may well have previously discussed but here goe
1. whats happened to the BIS shrapnel report promised in Sept - then Oct then Jan. Last I have been told is that they await a deliquent consulatnt supporting doc. seems strange.
2. with each loan secured not only by the development asset but also guarrantees from lendercompany and perhaps directors. Has LM sought legal redress against anyone on outstanding loan +interest?

Any guidance here would be appreciated
 
Re: LM - I've come in late hear

Londoner said:
Sorry to proably bring up subjects that you guys may well have previously discussed but here goe
1. whats happened to the BIS shrapnel report promised in Sept - then Oct then Jan. Last I have been told is that they await a deliquent consulatnt supporting doc. seems strange.
2. with each loan secured not only by the development asset but also guarrantees from lendercompany and perhaps directors. Has LM sought legal redress against anyone on outstanding loan +interest?

Any guidance here would be appreciated
Click to expand...

Hi Londoner, I have no idea of what's happened to the BIS Shrapnel report - keep in mind, I'm not an investor in your fund. I understood the report was to be released some time ago. I'm sure that any of the fund members on this forum would get you up to date if they had more information.

It seems LM has been quite generous with the lenders from the LMFMIF - loans in default at or beyond 90 days, and all pumped up to 100% LVR with accrued interest.

Peter Drake (himself) is a guarantor to one of the loans in default at or beyond 90 days and loaded to the hilt with acrrued interest - but I'd guess the security asset would have to be sold and a shortfall recorded before LM looks to Mr. Drake to make up the difference - ho hum.

Nevertheless, LM is a generous lender with other people's money.

I guess it won't be too long before the "bubble" necessarily has to burst.

[post made to make Londoner feel comfortable]

Good afternoon Rodent - must be well over the week you said you'd report back to the forum with some news - any news?
 
Re: LM - I've come in late hear

ASICK said:
Hi Londoner, I have no idea of what's happened to the BIS Shrapnel report - keep in mind, I'm not an investor in your fund. I understood the report was to be released some time ago. I'm sure that any of the fund members on this forum would get you up to date if they had more information.

It seems LM has been quite generous with the lenders from the LMFMIF - loans in default at or beyond 90 days, and all pumped up to 100% LVR with accrued interest.

Peter Drake (himself) is a guarantor to one of the loans in default at or beyond 90 days and loaded to the hilt with acrrued interest - but I'd guess the security asset would have to be sold and a shortfall recorded before LM looks to Mr. Drake to make up the difference - ho hum.

Nevertheless, LM is a generous lender with other people's money.

I guess it won't be too long before the "bubble" necessarily has to burst.

[post made to make Londoner feel comfortable]

Good afternoon Rodent - must be well over the week you said you'd report back to the forum with some news - any news?
Click to expand...

ASICK I am still waiting for a reply from BT re all the questions that were lodged by them to LM and I am also still chasing Trilogy re the WFMIF audited statement for 2012.

In regard to the BIS Shrapnel report, despite many promises by LM the actual report(if it actually exists) has not been made available, the only info that was made available was the two page Asset picture summary which was posted in this forum
 
ASICK I can access the Trilogy Letter via my recent Posting, so I assume you should be able to ? Just checked its not yet on their website
 

Attachments

  • LM letter to all funds_Feb 2013_FINAL.pdf
    143.8 KB · Views: 10
Dear all

As I have indicated in earlier posts I had written to ASIC, BT, and Trilogy about a number of issues relating to the RG45 and the Distributions that were reinvested,

In the case of BT they sent to LM detailed questions about the RG45. Although LM eventually replied there was little value or new learnings in the reply. However I suspect ASIC is still looking into some aspects. ASIC advised me that if any action is taken against LM then it will be published on the ASIC Website.

A recent comment from Trilogy relating to the distributions is very interesting QUOTE -

"The latest from LM regarding the distributions (not paid) to the LM Wholesale Fund is as follows:

When LM was RE of the Wholesale Fund they, as RE of the fund, implemented a default option that diverted all distributions paid to the Wholesale Fund to be re-invested back into the LM First Mortgage Income Fund...and this default option is still in place...hence this is why the Wholesale Fund has not received any distributions
Obviously we are not happy with this answer and are still pushing them on this issue. UNQUOTE".

As far as I know there is no default option?- however I may be wrong, I dont have access to a PDS or constitution for the FMIF, I only have all the WFMIF PDS etc . I have asked Trilogy to follow up further

In relation to the missing WFMIF Audited FY report Trilogy said this--

QUOTE "In regard to the accounts...they will be out in the next month or so....we have basically had to adopt the unit price valuation of 59 cents (even though LM have conducted a rigorous valuation of the fund assets)....I acknowledge they are long overdue but don't shoot the messenger....it is our directors that have to sign off and they are nervous about a few issues. UNQUOTE"

My views - Regarding the promised Capital Distribution payment , scheduled for first week of March 2103
Its clear from the LM doc that this initial distribution will be approx A$8.4Mil and the component that will go to the WFMIF should be approx A$1.7Mil. I dont have Current number of Units Held for the WFMIF, but based on last years data is about 95.8Mill Units

Also based on last year the $ waiting redemption for WFMIF was $64.13Mil

I wrote to Trilogy re this Process and this was a reply I received QUOTE "I take on board your comments re the impending distribution...we will pay it our asap (net of our management fee) and will also include a detailed distribution statement.UNQUOTE"

For Investors in both the WFMIF and other Feeder fund/s they should be able to see and compare the amounts paid per unit invested, (likely to be around only One Cent per unit, this should help to highlight the actual fee take by Trilogy for the WFMIF
 
RODENT69 said:
ASICK I can access the Trilogy Letter via my recent Posting, so I assume you should be able to ? Just checked its not yet on their website
Click to expand...

Hi Rodent,
I just realised that the document in this new link is a Trilogy document. I thought it was an LM document.
As soon as I opened it, I then realised it was the Trilogy letter I couldn't open before.
Thanks.
 
Surrealism

Rodent,

Reading Trilogy's latest production reminds me of that scene in "Apocalypse Now" when the patrol comes alongside an arena into which helicopters bring dancing girls.



"We are writing to you in our capacity as the second largest unitholder in the LM First Mortgage Income Fund ..." .. whoaaa there Mr. Bacon - Trilogy's the manager, not the investor! "As a 20% unitholder in the Income Fund, ..." .. hey, once isn't good, but twice? yipes ..

I think Trilogy missed out a couple of words after "our capacity as", and they are "THE RESPONSIBLE ENTITY OF ..".

Of course, it is Trilogy beating the war drums -- the pusche is clearly on.

After disclosing that it's written to various entities, including ASIC, Trilogy says, "Unfortunately we have not yet received a satisfactory response to our queries." - well, deary me ! no "satisfactory response". Seems like Trilogy's had as much luck with ASIC as they did when APGF wouldn't hand over a fund's registry to Trilogy - oh boy .. didn't Trilogy groans about going to expense of having to place ads in various newspapers - it didn't help them though.

http://www.investordaily.com.au/cps/rde/xchg/id/style/14734.htm?rdeCOQ=SID-0A3D9633-74BF0A70

On corporate governance, there seems to have been some changes down at Trilogy too:

https://connectonline.asic.gov.au/R...nds management limited&searchType=OrgAndBusNm

Trilogy says, "Lack of independent asset valuations - We are concerned as to the true financial state of our investment. Unitholders have had to rely on asset valuations determined by LM directors, each of whom is also a company executive. How can we as unitholders have confidence in the stated value of the Fund’s underlying security assets when there has been no external oversight by independent directors and little or no input from expert independent valuers? This brings into question not only the determination of unit value made by these directors, but also LM’s reasoning for handling the asset valuations in this fashion."

Darn, there he goes again "... our investment ..." and "... we as unitholders ..."

Speaking of expert valuations, Trilogy knows all about them - like the one/s which valued Martha Cove:

"Martha Cove 30 June 2009: $155,951,001
Martha Cove 30 June 2010: $141,060,782 (- $14.902m, or - 09.6%)
Martha Cove 30 June 2011: $117,657,495 (- $23.403m, or - 16.6%)
Martha Cove 30 June 2012: $47,000,000 (- $70.658m, or - 60.0%)"

Yep, Trilogy's on the pulse with Martha Cove - estimated fee to Trilogy on Martha Cove alone til 31 December 2012 based on 1.62% of 1 July values = $7.49m!

and all this leads nicely on to the Cairns asset:

"One of the assets held by the Fund (a Cairns student accommodation), which we believe was previously valued by the directors at more than $12 million, was sold for $3.85 million, resulting in a significant loss to the Fund." - yes, a woeful loss - about $8m - but that's nothing like the loss the PFMF suffered down at Martha Cove: over $100m !!!!!

It's surreal to read spruiks from Trilogy about LM - I mean, if it was any other entity other than Trilogy, it'd make sense, but from Trilogy it just seems it's an entity "in a glass house throwing stones" - it's weird. True, I agree the LM funds are in big trouble, but, let's face it, Trilogy's track record isn't one of overall success.

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

Trilogy says, "We have reason to believe that another asset held by the Fund (Bellambie in Wollongong) was sold during the course of 2012 and that approximately half of the proceeds from the sale (approximately $20 million) were paid to the LM Managed Performance Fund." - "reason to believe"? - oh dear, shocking !!! but then ASIC didn't care did it? so, what's Trilogy's gripe? Oh ! that's right, it's on the "high seas" again looking for "booty"!

Trilogy adds, "LM has not satisfactorily explained this transaction ...", and why should it? In my experience Trilogy hasn't even bothered to respond to letters of concern - so, is LM any different? I wouldn't expect so. LM investors don't see it, but PFMF investors do.

and, "... and our concern is that all of the proceeds from this sale should have been paid to the Fund for the benefit of unitholders." - well, LM is entitled to legally apportion money as it sees fit - it is certainly not for LM to be concerned about Trilogy's views - the proper place for Trilogy to have a groan is ASIC - but since ASIC is more concerned about form than substance, and since ASIC isn't a prudential regulator, if LM is not breaking the law, then ASIC won't give a hoot.

I look forward to LM's response to Trilogy - However, if you're looking for an entity capable of selling assets way way under valuation, you've found that entity in Trilogy Funds Management Limited - and as proof, look no further than the value of PFMF assets sold. Ask Trilogy to disclose a list of PFMF assets sales and the value of each asset sold at the end of all financial years prior to each sale (2009, 2010, 2011, 2011 - as applicable) - just see how responsive Trilogy is to disclosing information - ho ho. [don't forget to ask to have the auditors sign off on it]

Here's some light reading about the PFMF:
http://moneymagik.com/info_letter_re_pacific_first_mortgage_fund.pdf
 
Last edited by a moderator:
They Didn't Know Too Much At All.

Sure, it's only a little fund, but punters lost BIG time.

http://moneymagik.com/analysis_REIT.php

Rojacan Pty. Ltd., a company associated with Rodger Bacon (you know, the guy who signs the letters you receive), put some seed money into Trilogy's Healthcare REIT. All was disclosed in the PDS.

http://www.moneymagik.com/REITpds.pdf

On PDS page 11, "The Manager (in conjunction with Rojacan Pty Limited, a company associated with Rodger Bacon) has put in place finance and support facilities such that the proportion (if any) of equity not already subscribed by investors by the Acquisition Date will be contributed from these Loan facilities in order for the Trust to begin operations at that time."

The seed money was the necessary deposit to get the bank involved - in this case, the good ol' ANZ.

On PDS page 30, Trilogy discloses "Fund Raising" costs of $64,000.

Of course, the figures are heavilty disclaimed on PDS page 29.

But how much did it cost to protect Rodger's associate and the ANZ? Well, not $64,000, but $491,389 in fundraising! It's not hard to imagine that impact on a fund of about $9,200,000.

The 2008 return discloses part of the "fund raising":
http://moneymagik.com/Trilogy_Healthcare_REIT_2008.pdf

The 2009 return discloses the other part:
http://moneymagik.com/Trilogy_Healthcare_REIT_2009.pdf

Note this excerpt from the 2009 return (on page 2), "The total carrying value of the Fund’s assets as at the end of the financial year was $7,545,100 (2008: $8,606,265) and net assets attributable to unitholders were $3,955,542 (2008:$1,891,956) equating to $0.60 per unit (2008: $0.63)."

Okay, so the fund enters fiscal year 2009 with an NTA of $0.63, but in 2009, Trilogy (this entity that's so concerned about LM), happily accepts $1.00 each for 3,555,000 units worth only $0.63 each . You can work out the losses these investors suffered immediately they handed over the money to Trilogy - IMMEDIATE LOSS = 3,555,000 * $0.37 !

See 2009 return, page 8, applications for units 3,555,000 units at $3,555,000 (or $1.00 per unit).

In fact, the unit price only dropped by $0.03 in 2009, but that's only because the new investors suffered their massive loss which limited the loss to pre-existing investors.

And guess what? in 2010, Trilogy did one better, it took $129,600 (129,600 units at $1.00 per unit) for units with a current value of only $0.60 each. That's an IMMEDIATE LOSS to the newbies of 129,600 * .4 ! Page 8 also disclosed that all investors had lost 50% of their respective investments by 30 June 2010. This is Trilogy in action !

http://moneymagik.com/Trilogy_Healthcare_REIT_2010.pdf

Trilogy might say, "oh! that's a small fund", but for every one of the battlers' investments in that fund, his/her investment is probably just as much (and just as important) as any battlers' investors in any other fund. It is probably the case that those investors were just as impacted as many of you are.

I look forward to seeing the fund outcome for the FAILED Trilogy Healthcare REIT as soon as I'm able to purchase a copy of it's mid-term (31 December 2012) return [some time after 15 March 2013]

A number of years ago, Trilogy disclosed its Healthcare REIT's accounts on its website - but after attention was placed on the accounts, all the fund's accounts were taken off its website. It doesn't matter what Trilogy's motivation was for removing it's Healthcare REIT's information, the result was that Trilogy discontinued disclosing its failure, so investors visiting Trilogy's website saw nothing more than a sanitized version of Trilogy.

Of course its failed PMMMF never made it to its website:
http://moneymagik.com/more_on_Trilogy_PMMMF.php

In its latest spiel, Trilogy says (in part), "We have been approached by former LM employees, lenders and unitholders who have serious misgivings about how the Income Fund and the assets in the Fund have been and are being managed."

I just wonder how much these former LM employees, lenders and unitholders "who have serious misgivings" know about Trilogy and the negative affect its had on the lives of thousands upon thousands of investors in the Trilogy PMMMF, Trilogy Healtchare REIT, and Trilogy Pacific First Mortgage Funds?

I'm guessing they didn't know too much at all.

..
 
You Can Dream

I just know that investors in the LM funds want to know Trilogy keeps investors in the PFMF up to date. Well, it's nearly FOUR MONTHS since we've last heard from them: http://www.balmaintrilogy.com.au/

and I just know that you're all thinking an ICC is just the thing to keep investors abreast of the goings-on in the fund - so, have a little read of this: http://moneymagik.com/bt_icc_duh.php

it was way back there before the PFMF's meeting of 1 September 2010:
http://www.smh.com.au/business/bonus-racket-twice-paid-for-a-single-job-20100830-1431p.html

when one of BT's ICC members abruptly left the ICC and had his super fund buy up $7m dollars worth of PFMF units at $0.30/unit - and boy, wasn't that a mistake .. to date, millions lost in capital, not to speak about lost income.

after that buy up by an ex-ICC member, BT amended the terms of membership of the ICC so that, among other things, members could no longer resign and then go and lose money by following Trilogy's advice about the prospects for the fund. (yes, I know what you're thinking, it should be to prohibit someone taking an advantage of the information spruked at ICC meetings - but, let's face it, the buy up was a failure)

you see, all the members had signed a non-disclosure agreement, so if they got the good oil (before the amendment), they couldn't share that good oil with ordinary members, so only ICC members had the opportunity to take advantage of that good oil - I really don't think BT was thinking about ICC members actually going out and losing millions.

So, what can you expect from an ICC? well, I think you should expect nothing, unless the ICC is not bound by non-disclosure and is free to communicate openly, and bound to communicate promptly with members.

As I understand it, the Premium Income Fund's investors committee isn't even approachable by members of the fund.

Of course you can dream that an ICC is an advantage, but in my opinion history is telling me that your dream will not translate into a reality
 
BT'S ICC INDEPENDENT CHAIRMAN

Darn, I forgot to mention the independent chairman of BT's ICC - it's none other than Ken Atchinson of Atchison Consultants:

http://www.balmaintrilogy.com.au/investor.aspx

"Introducing your Committee Chairman (Mr Ken Atchison)

Mr Ken Atchison has been appointed the independent chairman of the Investor Committee. Ken has been involved in financial markets since the early 1970s. After gaining significant experience in the management of investment portfolios, he moved to providing investment advice to superannuation funds. In the years prior to establishing Atchison Consultants in 2001, he was a senior asset consultant with the global firm Towers Perrin (now part of the Russell Group).

Ken's experience covers a broad range of areas within investment portfolio and business management. This includes advice on the setting up of investment management businesses, the choice of in-house or outsourced investment management arrangements, the setting of investment policy and structures for investment strategy, capital market analysis and investment manager research and selection."

No mention of Ken Atchison being the managing director of Atchison Consultants:

http://www.atchison.com.au/consultants.htm

And of course, no mention of Atchison Consultants and Trilogy:

http://moneymagik.com/crap_file.php

Gee, you guys might be lucky and have Ken as the independent chairman of your own little ICC!

Wouldn't that be a hoot?

By the way, controversy came early for Mr. Atchison:

http://www.smh.com.au/business/pepper-rumoured-to-be-on-the-table-20100309-pvrd.html?skin=text-only

As an afterthought - it really would be worthwhile to ask both Trilogy and LM to (in detail) set out the terms and conditions of membership of their respective proposed committees - importantly, members should ask how the members will be chosen - will they be elected by popular vote, or selected (as Trilogy/BT did in the PFMF)?
 
Hi All,

Have been off air for a while but have caught up with all that is going on on here. It seems that ABC are doing a 4 corners report on Managed investment schemes on Monday night called "betrayal of trust" Might be worth a look
http://www.abc.net.au/4corners/
 
"Believe it or not"

Irishdan said:
Hi All,

Have been off air for a while but have caught up with all that is going on on here. It seems that ABC are doing a 4 corners report on Managed investment schemes on Monday night called "betrayal of trust" Might be worth a look
http://www.abc.net.au/4corners/
Click to expand...

An excerpt from the "4 Corners" promo:

"In one case, Four Corners found a company that accepted investment funds, promising competitive returns, in a business that seemed like a winner."

I'd guess that's what the investors who invested $3,555,000 at $1.00 per unit into Trilogy's Healthcare REIT thought - after all, Trilogy spent nearly $500k in fundraising. That's quite a lot of advertising. Yes, those new investors in Trilogy's Healthcare REIT in 2009 must have thought they were winners too.

I'd take a punt and guess they never knew that they'd lost $1,315,350 ($3,555,000 * .37) the VERY moment they transferred the money to Trilogy's account. I wonder if they even really understood that they'd lost their money when they received their first fund financial statement, be it the mid-term or end of financial period - after all, the financial statements are issued quite a number of months after the actual reporting periods.

Does anyone seriously think that investors would knowingly invest $1.00 for a $0.63 unit? (in 2009)

Does anyone seriously think that investors would knowingly invest $1.00 for a $0.60 unit? (in 2010)

That's the Trilogy Healthcare REIT : http://moneymagik.com/analysis_REIT.php

What do members say about these sorts of transactions? Dumb investors? or.. what?

Then there's Trilogy's PMMFF. (I've called this one the PMMMF - too many "M"s and "F"s - but I'll correct that)

The investor thought he'd hit a winning streak. He attended a Henry Kaye "Wealth Seminar" for free (family connections) - he registered his personal details at the seminar. Some time after the seminar he received an offer in the mail:

http://moneymagik.com/pmmmf_letter_3_october_2003.jpg

The date of the letter was 3 October 2003 - the letter offered 18% but the punter had to reply by 10 October 2003. The offer related to a mezzanine loan. Now, this punter had been primed at the "Wealth Seminar", the chances that he's take up the offer was much higher than from a cold call.

[note: MDRN Investments Limited was renamed Trilogy Funds Management Limited]

Note this excerpt from Trilogy's letter of offer dated 3 October 2003:

"Please note that you need to complete this application form with the same detail that you have already completed on the Principal Mortgages Mezzanine Finance Cash Management registration form"

What Trilogy didn't tell the punter was that the PMMFF's 2003 financials as at 30 June 2003 disclosed a subsquent event: on 29 August 2003 a receiver had been appointed to a $1m loan from the PMMFF.

http://moneymagik.com/pmmmf_subsequent_events.jpg

Trilogy was "not able to determine if the carrying amount of the loan is greater than the recoverable amount of the loan" - I'm sure you all realise that means Trilogy didn't know whether the loan was completely lost, or not.

Trilogy signed off on the PMMFF's 2003 financials on 29 September 2003.

http://moneymagik.com/pmmmf_mccarthy_29_september_2003.jpg

Remember, the punter was required to make his decision about the 18% just 11 days later. He could not have known about the return (and the subsequent event) from ASIC before he mortgaged his home and invested with Trilogy at 18% in its Principal Mortgages Mezzanine Finance Fund. The subsequent event was not disclosed in the PDS and it was not disclosed in the letter of offer.

The punter had no previous knowledge of Trilogy - he's only known Henry Kaye.

Trilogy had a relationship with Laton Corporate Finance Pty. Ltd.

http://moneymagik.com/dee_why_2.jpg

Remember Henry Kaye and his seminars?

http://www.asic.gov.au/asic/asic.ns...+involved+in+Henry+Kaye+seminars?openDocument

"Batho was a director of Laton Corporate Finance Pty. Ltd. until January 2004"

Trilogy had a relationship with Laton Capital Group.

http://moneymagik.com/dee_why_laton.jpg

http://www.jenman.com.au/news_item.php?id=328

"Paul Batho was the general manager of Laton Capital Group"

I guess you've all got the gist of it now - what the punter thought had been a lucky day when he'd be able to able to attend the Henry Kaye spruik for free turned out to be the worst day of his life. He'd received the letter of offer, mortgaged his home, and sent the $$$$ off to Trilogy.

What was the outcome?

http://moneymagik.com/dee_why_1.jpg

Now, I'll bet you won't find any of that on Trilogy's website.

and for reasons unknown, you'll never hear it from the SMH either.

"Believe it or not"
 

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