LM Investment Management - Lack of confidence

[Irishdan]

Dinga,

another question for them might be to ask why CFO Lisa Darcy appears to have left the company. She no longer appears on their website...

She usually signed off on the financials..

 

[dinga]

Well, LM have - sort of, loosely, kind of.... - responded "Various of your questions properly require information currently being finalised for all investors, including the BIS Shrapnel report.

Please bear with us while BIS shrapnel finalises that report and it is fully considered by LM and integrated into our financial modelling; to then be included with all the information for investors, with a two week consultation period with the regulator regarding same, following which it will be ready to send to investors."

To which I've replied:

I was disappointed to receive your email, which is inconsistent with the advice provided on 7 August that I would receive a full response 'shortly'.

While some of my questions are dependent upon the modeling, many aren't - and they are fundamental to my concerns and indeed those of many other investors. LM has had ample time to respond in relation to the following matters and I again request that LM urgently does so.

A. What is the trigger point at which LM will consider the fund(s) should be wound up?

B. Will investors be given the opportunity to specifically vote on winding up? If not, why not?

C. When will the Audited 2012 Financial Accounts be available?

D. What is the current status of the DBank funding arrangements, especially including the requirement tp pay $13.5mio due by 30 June 2012. Did that happen? What are the impacts/implications/penalties following non-payment?

E. Will feeder fund investors be given the opportunity to vote on the proposed changes to the FMIF Constitution? If not, why not?

F. What is the status of the Advisor Forums proposed by LM?

G. Answer the questions concerning the basis for, and level of, CPAIF fees

H. Answer the questions concerning related party 2nd Mortgages.

When will LM provide full responses to these matters, as it promised?


Am thinking of running a book on the likelihood and timing of a 'full response being shortly provided'.

Anyone care to suggest some starting odds???

Well, here's the latest 'response' from LM - no answers as usual. In relation to comment about me supposedly 'taking bits and pieces of information' [which ain't correct as the practice has been to provide LM's responses verbatim], am sure we'd all welcome LM's participation in this forum (fat chance, eh). Indeed, I'll invite LM to use this forum to provide investors with the quality information we are so loudly crying out for - and promptly (as was promised to me on 7 August).


I note I have already replied to your previous emails.

We consider that it is the right of every investor in the fund to be provided with information and to have questions answered. As we have replied several times, your questions are being addressed. It is important for the fund and all investors that information they have about the fund is correct and clear. The important information you request is to be provided as part of a whole package and in the context of LM’s strategy for the fund not just for your benefit but for that of all investors. I note that the online forum you have initiated takes bits and pieces of information, some of which is correct and some of which is not correct, posting that information in a manner we believe is “out of context with the intended fund strategy”; that is potentially confusing for anyone participating in said forum and therefore detrimental to the outcome of the fund.

Since the shareholder meeting LM has issued investor communication which you should have received.

In relation to the financial information, I note that BIS Shrapnel expects to have finalised their report by early September. On receipt, it will be integrated into our financial modelling and forwarded to investors together with other relevant information on the fund. Ernst & Young has also commenced the 30th June audit.

There will be a clear announcement with timeframes released to investors shortly.

In relation to this email, I advise that Ms Lisa Darcy has not held the position of CFO since March 2008. Mr. Grant Fischer was appointed CFO in March 2008. We have attended to the relevant notification in this regard.

Ms Darcy’s resignation in no way impacts the timeframe in which investors will be provided with the end year financials for the funds.

 

[chrisfe]

Hi,

This is my first post on the forum. I am an overseas investor in the LM frozen fund and have all my savings tied up in it. Like many it was sold to me as a liquid safe fund similar to a bank account - obviously we now know better. Is there any legal recourse we can take against the fund to get our money or force liquidation? I really am at a lose here on what to do, especially being outside Australia, so any advice or pointer would be much appreciated.

thanks,

 

[Irishdan]

Hi ChrisFe,

I suggest you contact Shaan Palmer at Piper Alderman Lawyers on 02 9253 9900

 

[dinga]

Re: The Two Rodgers

Just took another look at the minutes, and in particular, the names of the attendees.

I thought "What a co-incidence?" - a "John Barry" (financial advisor) listed above a "Rodger Barnes" from Rojacan.

Trilogy Capital Group and Balmain Trilogy Asset Management Pty. Ltd. both have a common executives named John Barry and Rodger Bacon.

Trilogy Capital Group - http://www.balmaintrilogy.com.au/directors.aspx
Balmain Trilogy - http://www.balmaintrilogy.com.au/directors.aspx

Rodger Barnes is associated with Rojacan Pty. Ltd. - well, surprise, surprise, Rojacan is associated with Rodger Bacon - the two Rodgers are associated with Rojacan. Wow! What a co-incidence!

Here's an excerpt from the failed Trilogy Healthcare REIT (asset at Crows Nest NSW):
http://www.moneymagik.com/rojacan.jpg

I wonder if the John Barry (financial advisor) knows of John Barry (executive at Trilogy/Balmain Trilogy)?

What a co-incidence?

Well, well, well. Seems ASICK was spot on. I'm waiting with bated breathe to receive something in my mail. In Africa, I understand vultures perform a very useful cleanup task in feasting on carcases of the deceased (and near deceased). Understand Trilogy is hardly a 'white knight', but is their apparent action possibly good news/bad news/neutral to we long LM sufferers?


RE: YOUR PERSONAL INVESTMENT DETAILS


--------------------------------------------------------------------------------

You may recall that we recently told you about a section of Australian Corporations Law that makes it obligatory for a manager of a managed fund to pass over all of your personal investment details to anyone who properly requests same. The Australian regulator enforces this, and so we at LM were obliged to pass on all the investor details in the LM First Mortgage Income Fund and the LM Currency Protected Australian Income Fund to a few parties.

The Corporations Law does not preclude non-Australian residents from being handed your information.

We believe that one or more of those parties has handed all of your personal information to an entity based in Sydney, Australia, with whom we have not had any business dealings in relation to the Funds.

It has come to our attention that this Sydney group is Balmain Trilogy and that they are writing to investors in the Funds seeking further personal information from them.

As mentioned above, LM has had no personal dealings with Balmain Trilogy in relation to the Fund. Information on the track record of Balmain Trilogy is publicly available.

If you receive a letter or contact from this or any other group, we strongly recommend that you do not confirm any bank, investment or address details as such details can be sold on to scammers and identity thieves.

LM is making enquiries to determine how your personal investment records were passed on to a non-related group operating out of Sydney.

Please contact your financial adviser or intermediary if you have information that you believe we should be aware of.

In relation to the Funds, we are in the last stages of Fund asset profiling. BIS Shrapnel expects to have finalised their report by early September. On receipt, it will be integrated into our financial modelling and forwarded to investors together with other relevant information on the Fund. Ernst & Young has also commenced the 30 June audit.

As a result of marketing sales activity, asset sales now in the pipeline for the last quarter of 2012 have strengthened. On the back of that activity, we anticipate that the recommencement of investor income catch up payments will commence moving towards the end of the year.

There will be a clear announcement with timeframes released to investors shortly.

If you have any questions, please contact your financial adviser or intermediary.



Yours faithfully

LM Investment Management Ltd
The global pathway to Australian Investment Solutions

 

[ASICK]

Balmain Trilogy

Yep .. put your glad rags on .. there's gonna be a hootenanny ... hoot hoot !
http://www.youtube.com/watch?v=R7EHL5HNYoo

BalmainTrilogy's performance to 31 December 2011?
http://www.moneymagik.com/performance_PFMF_Trilogy_big.jpg
(update coming soon)

BalmainTrilogy spruiks?
http://www.moneymagik.com/yardy_yardy_yah.php
(update coming soon)

Trilogy?
http://www.moneymagik.com/three_part_trilogy_funds_management_tragedy.php
(update coming soon)

and then there's LM ...

27% of investor value gone and they're paying INCOME? really?

To my mind, LM seem to do a lot of talking about what they're gonna do, rather than actually doing what they're talking about.

Actual sales figures might have merit, but otherwise, what's the point of LM's spruik about sales if they don't disclose the figures? Dangling a carrot?

Hang on, BS is coming .. is that how it goes?

The Sydney Meeting - if Mr. Drake had attended the Sydney meeting he might have noticed the man from Rojacan Pty. Ltd., a company associated with Rodger Bacon of Balmain Trilogy - ah, nevermind, it's all happening now - just like CYRE Trilogy and APGF .. and BalmainTrilogy and City Pacific.

I gotta say that I like the line about the identity theives ... nice penmanship from LM.

As to who gave BalmainTrilogy the information? Could it be someone who's not happy with LM? (just a guess)

"Oh the games people play now
Every night and every day now
Never meaning what they say now
Never saying what they mean"

http://www.youtube.com/watch?v=MAGyENr3_44

Just for laughs (note: "Be aware of similar approaches") - http://balmaintrilogy.com.au/pdf/BTI 4964 UnitholderUpdate.pdf

 

[ASICK]

geez .. I forgot .. on my last check, Balmain Trilogy (Balmain Trilogy Investment Management Pty. Ltd.) didn't hold a financial licence and wasn't an authorised representative of an AFSL holder, so I couldn't imagine investors would be getting investment advice from them.

You'll have to check from time to time to see if things have changed:-
https://connectonline.asic.gov.au/R...&_afrWindowMode=0&_adf.ctrl-state=5iwiofgau_4
(if the link doesn't work, then try this one: http://www.asic.gov.au/asic/asic.nsf/byheadline/Introduction+to+ASIC+Connect?openDocument
click on "Professional Registers" at the RHS of the screen when it opens, and check for financial licence AND then check for authorised representative)

 

[ASICK]

Balmain Trilogy in Asset Manager

LITIGATION & SUING A DEAD MAN

Trilogy, along with Balmain Trilogy, took over control of City Pacific's First Mortgage Fund. The fund was revalued and a loss of about $0.52 for each $1.00/unit was assessed. Investors were angry and hopeful that legal action would recover some or all of their losses.

Here's a bit of the history of litigation in the PFMF:
http://www.moneymagik.com/litigation.php

You'll note they sued a man who died two years ago! I guess they figured that out when they were told his new address, and yes, they discontinued but they didn't tell investors about this story. You'll also note that after all these years, time for filing of evidence has been extended - in my view, not a good look at all.

TRILOGY/BALMAIN TRILOGY AND THE GROUP

The fund become a group because the managers decided to buy an apartment in "King Tide". Note 4 of the fund's 2011 annual return discloses (in part), "On 7 April 2010, the Group established a separate wholly owned subsidiary named King Tide Management Pty Limited (King Tide), giving it a controlling interest in the shares of the company."

Note 8 discloses (in part),
"Balance as at 1 July 2010 419,823
Acquisitions - residential apartment (i) 47,029
Acquisitions - management rights (ii) 44,307
Balance as at 30 June 2011 511,159
(i) The Group acquired a residential apartment to maximise returns to unitholders on realisation of mortgage loans and paid a deposit for the acquisition of the managers unit in King Tide apartments; and
(ii) A deposit has been paid to acquire the management rights of King Tide apartments:

http://moneymagik.com/PFMF_return_jun_2011.pdf

Yes, it was all about maximising return to unitholders - but let's see how it turned out - let's see how they fared:-

Note 5 (b) of the fund's mid-term financials (31 December 2011) discloses that the men with the experience lost about $150k out of an initial investment of $500k - $500k which I might add would have done much better paid back to investors.

Looks like some of the deposit on the unit and the management rights were thrown away since the purchases didn't proceed. Is this what one would expect from Trilogy and Balmain Trilogy? To my mind, a resounding YES!

http://www.moneymagik.com/PFMF Half Year 2011 V4 FINAL.pdf

WHO'S THE BLAME

Want to play a game? Try this:
http://www.moneymagik.com/who_done_it.php

THE TRILOGY HEALTHCARE REIT

Want to take up a mission? If you do, try this:
http://www.moneymagik.com/extraordinary_stuff.php

ABOUT THE TRILOGY HEALTHCARE REIT:
http://www.moneymagik.com/analysis_REIT.php

 

[Irishdan]

Thanks Asick.

You are right Balmain Trilogy have not exactly covered themselves in glory as the "Saviour" of City Pacific investors and indeed their actions might look somewhat opportunistic in their previous takeovers and indeed in this case should it actually materialise.

I still believe the best course of action is to apply to wind up the fund ASAP and by changing the RE at least investors might have a chance of this happening.It won't happen under LM until it is forced which can't be too far away anyway given LVR's, capitalization of interest on default loans and revaluations fo properties.

The FUnd should have been wound up in 2009/10 an action that would have saved investors around 20m in fees paid to LM. Of course by doing that LM lose their biggest source of funds and would be out the back door with the rest of yesterday's rubbish

 

[dinga]

Thanks Asick.

You are right Balmain Trilogy have not exactly covered themselves in glory as the "Saviour" of City Pacific investors and indeed their actions might look somewhat opportunistic in their previous takeovers and indeed in this case should it actually materialise.

I still believe the best course of action is to apply to wind up the fund ASAP and by changing the RE at least investors might have a chance of this happening.It won't happen under LM until it is forced which can't be too far away anyway given LVR's, capitalization of interest on default loans and revaluations fo properties.

The FUnd should have been wound up in 2009/10 an action that would have saved investors around 20m in fees paid to LM. Of course by doing that LM lose their biggest source of funds and would be out the back door with the rest of yesterday's rubbish

Am thinking you guys are dead right - regardless of Trilogy's chequered history, if they commit to windup the Funds, over a reasonable time period and at a reasonable nett rate (ie, greatly discounted to the rates imposed by LM) it's likely to be an extremely powerful proposition to all we longtime sufferers.

 

[ASICK]

Am thinking you guys are dead right - regardless of Trilogy's chequered history, if they commit to windup the Funds, over a reasonable time period and at a reasonable nett rate (ie, greatly discounted to the rates imposed by LM) it's likely to be an extremely powerful proposition to all we longtime sufferers.

With respect Dinga, I wouldn't recommend Balmain Trilogy to my worst enemy .. hang on .. yes, I would. But other than my worst enemy, I would NEVER recommend Trilogy or Balmain Trilogy to anyone.

You guys are faced with the same dilemma some of us in the City Pacific fund were - whether to take on someone you don't trust (for one reason or another), or stay around and suffer the potential consequences of oppressive fees and endure other issues of concern such as second mortgages, at least one loan lent 'behind' your fund's loan, the manager taking over the role of managers and/or receivers at extra cost, and loans to relatives.

As I see it, both LM and City Pacific take/took fees, which compared to the market, are/were simply far too high. I guess high fees are a concern to investors when times are good, but it's hard to justify more than about .7% FUM when there's no income distribution and capital losses are incurred - after all, even if more effort is required to manage the assets in bad times, to offset that effort, there's little investor administration since there's no new investment and redemptions (if any) are paid on a pro rata basis at the same time.

If any "hunters" come calling, they'll come calling because investors are dissatisifed by the lack of income distribution, lack of ability to redeem, dropping unit price, high management fees, and lack of communication by the manager. I think the LM fund is one such fund where one would expect a mob like Trilogy or Balmain Trilogy to come calling.

Geez, I would have thought that when guys associated with Rodger Bacon turned up at the last fund meeting it would have set alarms bells ringing in the ears of LM's management team - did they really need letters to investors to confirm what might have been obvious to some? that is, that some entity associated with Rodger Bacon might be interested in the fund and that some disaffected member find comfort in Bacon and company?

When Trilogy (and Balmain Trilogy) come calling on members of City Pacific's First Mortgage Fund, there was little support in the forums for Trilogy since we'd found out about Philip Ryan's breach of trust and were generally concerned about that (note case two):
http://www.moneymagik.com/trilogy1.php

At that time we didn't know about Trilogy failures at Dee Why & Crows Nest:
http://www.moneymagik.com/analysis_REIT.php

However, even though we thought Trilogy was a company which should not manage our fund, many of us voted for Trilogy. I remember characterizing it as us running from a "shark" (City Pacific) and into a "Fisherman's Net" (Trilogy).

And so it goes, we now see this mob (Trilogy and Balmain Trilogy) (as at 31 December 2011) has lost 42% of the fund value they commenced with (and it was their re-valuation which set the start value as at 1 July 2009), sued a dead man, lost money investing in a single unit on the Gold Coast, lost a futher $15m on a second mortgage fund (which City Pacific had already lost $17m, to make a total of $32m) and who had made representation after representation which have proved not to have any legs at all, and to boot have received nearly $18m in fees!

There were those among us who just wanted the fund wound up (one such fellow was "Terry") - he didn't support Trilogy, rather he supported City Pac because he wanted the fund wound up and so he didn't want another manager. I didn't agree with him at the time but only to because City Pac's fees would have "killed" us in the process. Had City Pacific reduces its fee and gave certain undertaking, I (and others) would have not supported Trilogy.

That's where you are today - you're faced with a similar dilemma, it could be that LM's fees will "kill" what's left of your investment, so my guess is that, regardless of Trilogy and Balmain Trilogy's track record, some of you will find them an attractive alternative manager - doesn't anyone think that's sad?

I note with concern that LM states that the auditors have only just started auditing the fund's return - I hope that's not a sign investors won't get the fund's 2012 financials before going to the next meeting. The market is not good - eg. Wellington Capital's PIF fund reported a loss of about $94m from an about $200m fund in 2012 - I think LM and the PFMF are going to report massive losses, but only time will time. Given the potential for massive losses, it seems to me that members of the LMIF should strenuously resist any meeting until they're had time to digest the 2012 return.

I would also add that members should also not place any interest in Trilogy and Balmain Trilogy before nothing the performance (or lack of performance) of the PFMF, and for Trilogy, its Healthcare REIT:
http://www.moneymagik.com/analysis_REIT.php

In any event, it seems to me that LM finds itself where City Pac was in 2008, a hunter at the door - investors are dissatisifed because the fund is frozen, no income distributions, capital losses, at least one second mortgage loan, the manager (as manager of another fund) lending "behind" the PFIF, loans to relatives, the manager earning additional fees due to taking over the roles of managers and/or receivers on various loans, and high management fees.

If LM doesn't make a lot of changes, and make them fast, then LM stands to lose its fund to such a predator as Balmain Trilogy (perhaps with Trilogy as RE) even with their respective track records, records which at times are quite troublesome even without considering Ryan's breach of trust - note: Philip Ryan is Managing Director of Trilogy Funds Management Limited and sits on the Compliance Committee:-
http://www.trilogyfunds.com.au/site/index.php?id=2

So, what's the upshot?

Well, LM risks losing all - investors risk being in the joyous position members of the PFMF are today. A position I really wouldn't wish on anyone (except of course, my worst enemy).

To recap, here are the spruiks from Trilogy / Balmain Trilogy, the representations and the outcomes:
http://www.moneymagik.com/yardy_yardy_yah.php

I think LM would be wise to drop its fee to about .7% FUM (funds under management), pay back the loan to the relatives, assign managers and/or receiver to loans (or manage such loans for the base fee), as manager of the other fund lending "behind" the PFIF seek alternative funding, and wind up the fund asap.

I don't suppose LM will do those things, and if it doesn't, then I guess the battle will be on.

There's more to post on this issue - and I'll do that at a future time.

 

[ASICK]

Making Waves on the Gold Coast?

http://www.redorbit.com/news/entert...ment-in-talks-with-kelly-slater-wave-company/

 

[dinga]

Re: Making Waves on the Gold Coast?

http://www.redorbit.com/news/entert...ment-in-talks-with-kelly-slater-wave-company/

"LM Chairman and CEO Peter Drake says Maddison has several groundbreaking aspects to change the face of residential community living “as we know it,” whilst optimising returns for investors in the LM Funds.

LM is a privately owned, Australian fund manager that holds significant property expertise through the management of its investment funds. Via the LM Funds, LM provides senior debt funding and participates in equity opportunities across prime assets spanning the residential, commercial, aged care, industrial and retail sectors of Australia. Over the past 14 years, LM has financed the successful delivery of some 400 projects on behalf of investors in the LM Funds. LM holds only Australian assets with a gross realisable value of approximately A$3 billion under management. "

Lofty expectations indeed - but as an investor in two (2) LM Funds that have been frozen since early 2009, with a Unit Price currently reduced by 27% (and additional losses for opportunity costs, inflation, 'deemed re-investments' etc), I wonder if my sad experience is indicative of LM 'optimising returns for investors'?

 

[ASICK]

Re: Making Waves on the Gold Coast?

http://www.redorbit.com/news/entert...ment-in-talks-with-kelly-slater-wave-company/

Dinga, it's only a spruik - note the bottom of the document:-

"Contact:

Michelle Ballard
M: + 61 402 085 231
E: mballard@LMaustralia.com

This press release was issued through eReleases ® Press Release Distribution. For more information, visit http://www.ereleases.com.

SOURCE LM Investment Management Ltd

redOrbit (http://s.tt/1n3fa)" (emphasis added)

See where it popped up:-
http://www.google.com.au/#hl=en&out..._pw.r_qf.&fp=512fb598185929c7&biw=952&bih=821

Later today I'll put together something on Trilogy and BT's spruiks - I wonder if you'll find some similarities (in tenor) with those of LM?

I'd love to see a list to the investments that total up to AUD $3m - yes, it'd be fascinating. (or does the added term "gross realisable value" pump the actual value under management - and I wonder if the feeder funds are counted in the fed fund?

 

[ASICK]

Trilogy & Balmain Trilogy

I said I was going to make a comparison between BT/Trilogy and LM but I couldn't find some of the earlier documents I wanted (from the public record). I'll post something in due course if (and when) I find all the information.

In August 2009 (BRW), BT spruiked that in 18 months to 2 years it hoped we'd agree with them that the fund was strong - well, it's not - it's crashed like a lead balloon - from a unit price of $0.48 on 1 July 2009 (fund revalued by BT) to a unit price of $0.28 as at 31 December 2011 (including $0.08 repaid to investors) - that's a 42% loss.

http://www.moneymagik.com/bullsh1t.jpg

On respective starting values, City Pacific lost 52% and Trilogy/BT lost 42% (to 31 December 2011) - of course, the $$$$$$ are much higher for City Pacific, but the percentages are close - I'm expecting that the figures for 30 June 2012 will put Trilogy at a number greater than 52% - let's see.

BT spruiked that it was going to pay back $295m by 31 October 2012 by making a $0.04/unit payment every April and every October - they made ONE such payment. They said there'd be 'additional' payments - there were NONE.

http://www.balmaintrilogy.com.au/pdf/BTI 4512 CEO Address.pdf (see page 12)

"• Balmain Trilogy is targeting to repay $295m, or 71% of the current assets of the Fund, to Unitholders prior to October 2012."

The $295m was not intended to include only a small part of the fund's assets at Martha Cove (Vict). Martha Cove was valued at about $86m in March 2012. As at 31 December 2011 the ENTIRE fund was valued at about $200m, so it's clearly it's not only impossible to repay investors $295m by 31 October 2012, it's impossible to get anywhere near it without disposing of Martha Cove !

http://www.moneymagik.com/MCIS_re_295.mp3

Over the two years since repayments have been made, there's been 1 x $0.04/unit repayment, and 4 x $0.01 repayment, and NO additional repayments. The next payment is spruiked to be $0.0075. A member phoned Trilogy and was told that the CBA was getting $0.0025/unit for each $0.0075 repaid to investors. This has not been verified with Trilogy.

Repayments to date amount to about $72m ($0.08 * 887m), so the shortfall in the representation at this time is about $223m ($295m - about $72m).

When Protect PFMF ran for the fund, BT responded in August 2011 (in part) by spruiking that not only could it repay the shortfall in the $0.04/unit payments by December 2011, but they still felt they could make the $295m target as represented - ho hum - mission impossible? you bet !

http://balmaintrilogy.com.au/pdf/BTI 4882 Unitholder Letter.pdf (see top of page 4)

That's over ONE YEAR ago, and neither Trilogy nor Balmain Trilogy have mentioned the $295m repayment since then ! Even BT's ICC didn't think that the $295m rated at mention in its April 2012 'report'.

http://moneymagik.com/IC LetterToUnitholdersApril2012.pdf

The repayments to members have gone like this:-

http://www.moneymagik.com/down.jpg

In the link http://www.moneymagik.com/yardy_yardy_yah.php it's easy to see the representations made by Trilogy and it's easy to see the outcome. The dwindling away of the repayments over time has been a hallmark of Trilogy's management of the PFMF.

At the link http://www.moneymagik.com/litigation.php it's easy to see the spruiks about the litigation - how the "more than $300m, more than enough" spruiked at the fund meeting of 1 September 2010, to the "hopeful $100m" at the fund info session in Sydney in November 2010, and to the "absolute utopian $100m" at the Martha Cove info session in April 2011 [audio clips are provided]

The complete member recordings are also available at:

For the Sydney info session:

http://www.moneymagik.com/audio.php

For the Martha Cove info session:

http://moneymagik.com/audio_MCIS.php

Of course members were hopeful, but the outcome has been far far different that they might have anticipated.

When I think of your consideration of Trilogy and/or Balmain Trilogy, I'm reminded of the old adage - "be careful, you might get what you wish for".

If anyone is interested, most documents relating to the PFMF may be found here:-

http://www.moneymagik.com/general_information.php
http://www.balmaintrilogy.com.au

(sorry about the speeling errors - touch typing is easy for me, but sadly, as I age, my mind and fingers don't seem to be in sync all the time - however, I'm sure readers are smart enough to get the drift and are able to make the necessary corrections.)

UPDATE - This is where Trilogy was going to run the fund for .85% FUM -

http://www.theaustralian.com.au/arc...hes-takeover-bid/story-e6frg9gx-1111118150961

''...Trilogy, which operates its own Trilogy first Mortgage Fund, made the offer to City Pacific last week and is seeking to gain control of the First Mortgage Fund cash flows.

Under the offer, Trilogy said it would charge an annual management fee of 0.85 per cent of funds under management.

It would charge no other management fees and not introduce poison-pill provisions that could make it difficult for Trilogy to be removed as manager...''

However, it didn't end here - there's more but I have to try to get the information. There was another spruik, and then the final figure of 1.50% FUM management fee + .12% FUM custodian etc. = 1.62%.

 

[ASICK]

The previous posting should be amended thus:-

"The $295m was intended to include only a small part of the fund's assets at Martha Cove (Vict). Martha Cove was valued at about $86m in March 2012. As at 31 December 2011 the ENTIRE fund was valued at about $200m, so clearly it's not only impossible to repay investors $295m by 31 October 2012, it's impossible to get anywhere near it without disposing of Martha Cove !"

by the deletion of word "not" between "was" and "intended" (market in blue).

Also, I forgot to include the fact that when litigation eventually was proceeded with, the claim was for $60m [not the "hopeful $100m", nor the "absolute utopian $100m"]. Since one of the defendants had died two years prior to the lodgement of the claim and a discontinuance was subsequently filed, this claim may (in my view) be reduced by $12m if the intention is to recover primarily from an insurer [assuming there's nothing in the kitty elsewhere].

 

[dinga]

ASICK - am feeling more pessimistic than usual about LM after now having had the time to read through your posts and the info at moneymagik. While I think we LM sufferers may only be at the early stages of what may well be a financial process akin to a stroll at Sandakan; the beacon showing the City Pacific, BT, et al experiences may perhaps foretell what we have to look forward to. Some of the stuff certainly strikes a cord even at our early stage....

Seems my choices are pretty much limited to:

* Stick with LM: An RE in whom I have no confidence at any level; PROVIDED LM AGREES TO: 1. Wind up the Funds, in as timely a manner as possible - for the sole benefit of the investors; 2. Independent, professional recommendations be urgently provided about how to best achieve windup (including priority disposal of the 2nd Mortgage assets); 3. LM to reduce its fees and charges to more reasonable levels for the windup process; 4. Investor Meetings be held one month after the provision of the above and the audited 2011/2012 Financial Statements to discuss and agree on how to proceed; 5. Investor Committee be established to provide investors with on-going independent check/feedback of/on LM's performance; 6. Capital repayments be made progressively as circumstances allow (no further payments be made of interest/dividends)

* Find a new RE: Willing to act as above. Process for achieving such a change is likely to be a very messy and time-consuming one - with the question marks about the comparative performance/outcome anyway. Change in RE would no doubt greatly facilitate any possible Class Action - but even if successful, that would likely taken many years.

No good choices - but the best outcome seems clear ie. Windup these Funds

 

[ASICK]

Good afternoon Dinga,

What a dilemma. You fear a "shark", yet there seems only "fishermen's nets' to run to.

Stacks Finance have a good reputation - they run for the PFMF last year, but sadly the ex-CEO Phil Sullivan was involved and many investors couldn't (for one reason or another) distinguish Stacks from Sullivan. I supported Stacks and was quite disappointed that Stacks' pushe failed. I'm confident it failed because Stacks didn't take the forefront - the convening members (which I assume included Sullivan) seemed to take take on which might be regarded (in the circumstances) as an impossible task.

Here's Stacks ' website: http://www.stacksfinance.com.au/

A lot of good managers won't want to get involved with a fund that's badly damaged - such funds have the potential to take the new managers down with them (unless a liquidator is appointed - note the liquidator of Equititrust's IF is doing quite nicely - in fact, very nicely indeed - check the Equititrust thread here on ASF).

A view I've always held has just been recently posted on equititrust/ASF, and that's the reality that fund value really becomes more realistic when assets need to be sold - sales at below holding value give rise to a reduction in unit price - a fund shows its true colours only when stress tested by asset sales. Such stress testing cannot be avoided because the only source of $$$$$ is by way of asset sales. While a manager might hold off and hold off, there must come a time when any bad news has to be disclosed, as I suspect such bad news will be disclosed in your fund.

It's clear to me, and I'm sure its clear to you, that the value a manager places on the assets in a frozen fund really means nothing unless every investor is free to take his/her money at value and leave the fund - they can't, so the value is meaningless. On the other hand, that value is REAL to the manager because it's the value on whch the manager's fee is calculated - that's a great deal for the manager ! but not for investors !

I agree that the fund should be sold off and that the manager should be replaced if its not interested in giving investors a better and more transparent deal. But you need a successful manager, not a manager which has lost investors' money (in part or in full) - more importantly, in my view, you don't need a manager which doesn't disclose its failures or any adverse court finding against one (or more) of their directors (even it's not mandatory to disclose such a finding).

Do a search of various funds and contact some of the managers - speak to those manager who have a successful track records - there aren't too many, but if you get one of them, it'd be the best thing you could possible do.

No one is going to do the job for free - they all want to make a buck. The trick is to find a manager you're able to trust while ensuring that you get more bang for your buck : without trust there will be no peace for you with what's left of your investment.

 

[ASICK]

It's a Small World After all !

Dinga, it really is a small world. Can you believe MDRN Investments Limited (now called Trilogy Funds Management Limited) lent BEHIND LM?

We're had some documents in our possession for a couple of years, but it's only now that they're being re-examined.

Some documents already disclosed about Trilogy's Principal Mortgages Mezzanine Mortgage Fund (PMMMF):
http://www.moneymagik.com/dee_why_new.php

This is a link that's being reconstructed:
http://www.moneymagik.com/

Part of the reconstruction of the link is the story of Trilogy, and part of the story of Trilogy is the story of the PMMMF, so we went back and re-examined the documents - a name we'd seen before and didn't know suddenly stood out like a sore toe - it was that of LM Investment Management:
http://www.moneymagik.com/lm_trumps_trilogy.jpg

Yes, it is a small world after all !
http://www.youtube.com/watch?v=2UytZO8D2d4

 

[sherlock]

Re: It's a Small World After all !

Dinga, it really is a small world. Can you believe MDRN Investments Limited (now called Trilogy Funds Management Limited) lent BEHIND LM?

We're had some documents in our possession for a couple of years, but it's only now that they're being re-examined.

Some documents already disclosed about Trilogy's Principal Mortgages Mezzanine Mortgage Fund (PMMMF):
http://www.moneymagik.com/dee_why_new.php

This is a link that's being reconstructed:
http://www.moneymagik.com/

Part of the reconstruction of the link is the story of Trilogy, and part of the story of Trilogy is the story of the PMMMF, so we went back and re-examined the documents - a name we'd seen before and didn't know suddenly stood out like a sore toe - it was that of LM Investment Management:
http://www.moneymagik.com/lm_trumps_trilogy.jpg

Yes, it is a small world after all !
http://www.youtube.com/watch?v=2UytZO8D2d4

Well now seems like CFO Grant Fischer has also gone. No longer on board or exec committee on website. Interesting timing and no announcement or disclosure from LM. Cards seems to be falling. Worth investigating?