LM Investment Management - Lack of confidence

Irishdan said:

Hi Asick,

I wasn't trying to defend Trilogy at the expense of City or indeed LM. My Point is that they are all sharks. There is no way that any investor is going to get anything out of this regardless of whether Trilogy or LM win the right to conduct the next round of incompetence

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Hi IrishDan,

I'm sorry that my post gave that impression - it wasn't intended that way but I can see that it might. I've always seen you as impartial and was truly interested in your opinion.

Trilogy's Latest

Here's the latest from Trilogy:-

http://www.trilogyfunds.com.au/site...EB Up-Date to LM Investors Advisers _2_.pdf

Some comment:-

“the asset review” - to my mind, a waste of money. Want proof? The fact that the PFMF lost 56% of its value since the “asset review” is, to my mind, proof enough. If any entity was given an advantage, it was the manager – a bag full of fees for the manager with year-on-year losses for investors.

“legal review of the current RE's actions” (see below).

“transparency and regular communication of real information to investors” - here's an example of what Trilogy has to offer – spruiks and disappointments:
http://www.moneymagik.com/yardy_yardy_yah.php
http://www.moneymagik.com/litigation.php

“selling up the assets – no fire sales”
again – Trilogy defined what a fire sale was (Martha Cove, April 20110
See:
http://www.moneymagik.com/fire_sale_defined.mp3
http://www.moneymagik.com/ [in relation to the fund's asset at The Entrance]
http://www.moneymagik.com/martha_cove_ad.php
http://www.moneymagik.com/the_entrance_in_one_line.php

“date for accounts” - How about the PFMF in 2010? – 1/11/10 – a month late – oppps .. see .. it does happen from time to time.
https://connectonline.asic.gov.au/R...ic first mortgage fund&searchType=OrgAndBusNm

“based on reports, Trilogy thinks the unit price is about $0.60” - if it's $0.60, then subject to the RG45 disclosing no large amount of $$$ in the high LVR ranges, $0.60/unit is a good outcome in the circumstances – a far better outcome than has been achieved by Trilogy in the PFMF.

“licence” - Trilogy is confidence but applies to ASIC just in case, but says it has some good arguments in any event. Now, that's confidence!

“Pacific Fund” performance - interestingly, Trilogy doesn't use the full name of the fund. It might be more difficult for LM fund members to do a google search for the “Pacific Fund” and come up with the Trilogy Pacific First Mortgage Fund.

Trilogy says, “The loss suffered by investors is as a result of the poor loans made by City Pacific which are now subject to legal action being undertaken against the previous RE board and credit committee” - really? Most of the losses suffered in the claim were included in the initial reassessment of the fund's value (asset report) and formed part of the initial write-down to the new value of $0.48 (from $0.63) as at 30 June 2009 – those are the bulk, if not all of the losses spoken to in the claim, NOT the ongoing losses in the PFMF under Trilogy's management (loss of 56% in fund value).

As to value, here's Balmain Trilogy's Andrew Griffin at the investor information session at Sydney in November 2010:
http://www.moneymagik.com/the_hopeful_recovery.mp3
and down at Martha Cove in April 2011:
http://www.moneymagik.com/keep_on_turning_in.mp3

Trilogy spruiked a $295m return to investors by October 2012:
http://www.moneymagik.com/295_mil.mp3
(note: the $295m was not intended to include the bulk of the fund's assets at Martha Cove)
http://www.moneymagik.com/re_cash_balance.mp3

The last time Trilogy spoke to the $295m was in August 2011 – they haven't mentioned it since.

What has Trilogy delivered to date? $0.875 * about 887m units = about $77.6m with a fund value of about $109m gives a total value = $186.6m.

The spruik was $295m + about $88m = about $383m, the reality $186m (and the game's not over yet!).
http://www.moneymagik.com/yardy_yardy_yah.php

As previously posted, Trilogy had (just as its proposing for the LMFMIF) as the fund's expense, carried out an “asset review” and had revalued all of the fund's assets – this asset review also effectively (for the most part) limited the loss in the fund caused by City Pacific to the loss as determined by the new assessment of the value of the assets.

The losses (calculated as at some time in November 2009) were applied as at 30 June 2009, and that being the case, set City Pacific's part of the loss for the fund at $0.52/unit (there were about 887m units in the fund at that time) – so the loss (Citypac as manager) equates to about $461m.

As previously posted, Trilogy started off by suing five directors, then found that one of them had died and had to discontinue against the dead man.
http://www.moneymagik.com/trathen_the_disappearing_man.php

Clearly the suit was directed towards insurance since it's quite unlikely that the ex-directors would have a lazy $60m laying around. Now that the suit is against four, that's make the claim about $48m – but there's a problem – Ex Citypac CEO (and one of the respondents in the Federal Court) Phil Sullivan alleges there's no insurance because of Trilogy's failure to fulfill an essential clause of the indemnity insurance – oppps!

Don't forget that Trilogy said that there were claims for “more than $300m, more than enough” (or words to that effect), but that petered away to a “hopeful $100m”:
http://www.moneymagik.com/twas_300.mp3”

Litigation funder IMF funded the public examination of the ex-Citypac directors and others but wasn't interested in funding the litigation against the directors – now, why could that be? To my mind, only because there's no money in it. After all, if there were $$$$ to pursue, IMF would be in there “boots and all” because that's what they do: they don't waste shareholders money on a folly.

Trilogy hasn't mentioned any of these things. Trilogy hasn't mentioned that there's a cross-claim by the respondents claiming that the fund is liable for the respondents costs. .. oppps again.
https://www.comcourts.gov.au/file/Federal/P/NSD604/2012/actions

Trilogy hasn't told members of the PFMF that the PFMF is paying for the litigation – readers might recall that Trilogy told members of the fund that IMF would fund the litigation and the benefits to the fund of potentially giving up 26% of the take:
http://www.moneymagik.com/litigation.mp3

Trilogy also told members that IMF would fund any litigation Trilogy wanted them to – which now seems a fanciful proposition:
http://www.moneymagik.com/balmain_in_charge.mp3

After all the spruiks, IMF is NOT funding the litigation – the fund is. There now only four, not five respondents – there's a possibility of no insurance – and there's a cross claim for indemnity for legal costs by the respondents.

Now, what else didn't Trilogy speak to?

The majority of PFMF losses while Trilogy managed the PFMF and
The failure to return the targeted $295m:
http://www.moneymagik.com/yardy_yardy_yah.php
The Trilogy Healthcare REIT:
http://www.moneymagik.com/analysis_REIT.php
The Trilogy MMMF:
http://www.moneymagik.com/more_on_Trilogy_PMMMF.php
Philip Ashley Ryan of Trilogy Funds Managements:
http://www.moneymagik.com/trilogy_more_on_ryan.php

ASICK said:

Hi IrishDan,

I'm sorry that my post gave that impression - it wasn't intended that way but I can see that it might. I've always seen you as impartial and was truly interested in your opinion.

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Thats Fine Asick, No harm done.

I am impartial in these matters and on the issues you raise regarding Citi Pacific and subsequently Trilogy/Balmain Trilogy I must admit I did not follow it as closely as I have LM because I did not have anyone seek my advice who have or rather had exposure to these funds. Suffice to say I have looked at all of the information you have provided and it would appear that they are no better at delivering on their grand statements than indeed the Management of LM have been, or for that matter equititrust, banksia, Macarthur Cook, MFS,ACR any number of "mortgage funds" or "income funds" the majority of which were Gold Coast based.
My issue is with this whole sector and the level of disclosure about risk. All of these type of investments were promoted as "safe" or alternatives to Term Deposits. With Lm I have had continued dialogue since 2009 and have said for three years that it would indeed get to this point and that it should have been liquidated back then.

LM is just the one in my sights at the moment but they are no better or worse than any of the others listed,in fact they all have the same stench about them

Keep up the good fight my learned friend...

Irishdan said:

Thats Fine Asick, No harm done.

I am impartial in these matters and on the issues you raise regarding Citi Pacific and subsequently Trilogy/Balmain Trilogy I must admit I did not follow it as closely as I have LM because I did not have anyone seek my advice who have or rather had exposure to these funds. Suffice to say I have looked at all of the information you have provided and it would appear that they are no better at delivering on their grand statements than indeed the Management of LM have been, or for that matter equititrust, banksia, Macarthur Cook, MFS,ACR any number of "mortgage funds" or "income funds" the majority of which were Gold Coast based.
My issue is with this whole sector and the level of disclosure about risk. All of these type of investments were promoted as "safe" or alternatives to Term Deposits. With Lm I have had continued dialogue since 2009 and have said for three years that it would indeed get to this point and that it should have been liquidated back then.

LM is just the one in my sights at the moment but they are no better or worse than any of the others listed,in fact they all have the same stench about them

Keep up the good fight my learned friend...

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I well understand your feelings, in fact I empathize with you. I know well of Trilogy's m.o. I was thinking about what I would say as to why members shouldn't support Trilogy and stay with LM when LM is far from a star performer.

Having given it some thought, I would say that at least with LM, members can blame LM and LM can blame none other than the market ... however, with Trilogy, Trilogy can blame LM, it can build a straw man out of Peter Drake .. promise litigation .. promise asset reviews .. years will go by ... and if things go pear-shaped, then they'll bring out Drake (aka the LM pinata, or strawman) or LM or the market, but nothing will be Trilogy's fault.

Members will tire and have no interest in replacing Trilogy even if things get so bad they couldn't get worse. I understand how the members of the LM funds feel, but to think that Trilogy will perform better than LM is, in my opinion, no more than a dream.

We thought that getting away from City Pacific was so important that we could overlook Ryan's breach of trust, but if we'd had out time over again, and if Citypac had "capitulated" (as Trilogy says of LM), then I'm sure many of us would have stayed with City Pacific.

Trilogy mocks LM's meeting members' demands, but for my part, I think it was wise of LM, and it's a very good reason why members should see that LM has the good sense to meet members' demands in such a stressful environment (albeit with pressure from a predator).

I recently posted that even one of Trilogy's most ardent supporters is no looking to see a change in management - it took three years, but after the battering the fund has taken under Trilogy's management, he wants a change. Given that he was one of the small number of members who brought Trilogy into the fund, that's quite a change.

I also understand that what is posted here is unlikely to influence the outcome of the vote which, for the most post, is probably complete, but it's important for members to know about Trilogy - know not just what Trilogy wants to tell members, but what Trilogy hasn't told members.

I will oppose Trilogy everywhere I'm able to - I understand that by opposing Trilogy that I obviously assist LM, but when I take everything into consideration, I think that is the right thing to do.

If I've two targets, I'll look to "shoot' the one I fear the most - and for me, that's Trilogy.

As to keeping up the good fight, that I will, my learned friend, because if we ignore the mistakes of the past, we are bound to repeat them.

a note just received from an adviser following a phone hookup with Peter Drake

Recently we have seen an unusually high level of correspondence from LM Investments regarding their closed mortgage funds, this has been in response to an approach by Trilogy Funds Management to take over as Responsible Entity (manager) from LM for the LM Currency Protected Australian Income Fund and the LM Wholesale First Mortgage Income Fund, two feeder funds of the LM First Mortgage Income Fund.

You may have already received paperwork from Trilogy asking you to vote yes to such a change. At this point we yet to make a decision on which way it will recommend that clients vote. Please note that if you are invested in LM within a BT Wrap portfolio, BT Wrap will be making a decision on behalf of investors, of which you will be notified. I spoke to BT Wrap yesterday and they have yet to make a decision on whether to vote or abstain.
I attended a conference call on Tuesday held by LM around “LM’s strategy for the closed mortgage funds versus Trilogy” At this call Peter Drake, LM’s CEO relayed the following information.
• LM will start paying distributions that are owed to investors in November 2012 but they could not give an indication as to what amount or how consistent this distribution would be.
• They would expect that in 12 – 18months investors will get back 50% of their capital based on the unit price at the time, not the original $1 per unit.
• The remaining 50% of capital to be returned to investors within 3 – 4 years based on the unit price value at that time.
• They have reduced the management fees in the fund down to 1.5% per annum in order to match the fees announced by Trilogy Funds Management.
• They are awaiting a BIS Shrapnel report on the underlying investments in the fund which should be out in ‘the next few weeks’. They believe that this will price the units in the fund at approximately $0.60/unit, which is a drop from the current value of $0.73/unit.
• The loan owed to Deutsche Bank which is currently at $33 million will be repaid by March 2013.
At this teleconference it was also confirmed by LM that they will no longer be moving forward with splitting the fund into two parts. This was originally announced by email on October the 22nd. LM’s reasoning for this decision is as follows: “This decision was made following our last rounds of meetings with advisors and investors, wherein the strong feedback was a preference not to see assets split, rather have all investors continue to benefit from the whole pool of assets in the fund. This does not change our general value add strategy and asset sell down approach.” This means that as they sell assets in the fund the capital will be returned to investors as per the timeframes detailed above.
As more information arises we will keep you informed. If you have any additional questions on this matter please contact your adviser.
Kind regards

It is another attempt to buy time by Drake. I am willing to bet that
1)the distributions in November are insignificant if they materlialse at all
2)BIS Schrapnel asset review report and financials will not be available prior to the vote
3) unit price is below 60c (my bet is around 50 at best)

Irishdan said:

... “This decision was made following our last rounds of meetings with advisors and investors, wherein the strong feedback was a preference not to see assets split, rather have all investors continue to benefit from the whole pool of assets in the fund. This does not change our general value add strategy and asset sell down approach.” ...

It is another attempt to buy time by Drake. I am willing to bet that
1)the distributions in November are insignificant if they materlialse at all
2)BIS Schrapnel asset review report and financials will not be available prior to the vote
3) unit price is below 60c (my bet is around 50 at best)

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Actually, I'm quite surprised that there's any talk at all about an income distribution - I would have thought the only talk would have been about capital redemptions !

Even $0.50/unit is fairly good if that's the case - mind you, I've learnt that the value doesn't matter - it's only what comes back that matters.

I'm pleased to see that the strong preference NOT to see the assets split. Managers in such damaged funds attempt to split investors by one mechanism or another in order to keep the income stream from the fund going for as long as possible.

Darn, that's another subject I hadn't turned my mind to - Trilogy's meeting of members of the PFMF of 1 September 2010. Really, when it comes to Trilogy, sometimes I think it's an neverending story.

Here's an appetizer (starting at "Victims of the sorry City Pacific saga ... "):

http://www.smh.com.au/business/bonus-racket-twice-paid-for-a-single-job-20100830-1431p.html

So much more to discuss about Trilogy (and Balmain Trilogy) now ... the meeting was such a blast.

Full of hopes & full of dreams ..

http://www.youtube.com/watch?v=ZHS73xXV-nw&feature=related


For my learned friend:
http://www.youtube.com/watch?v=7FiOmiiX48I

WOW!

http://www.lmaustralia.com/Downloads/Unitholder-letter/adv-trilogy-key-points-29-10-12.pdf

It's always nice to be back in Australia. Mind you, it's been nice in Thailand these last couple of weeks, but unanticipated car troubles in Chiang Mai slowed me down a bit.

Back to Australia, and back to LM and Trilogy with one day out from the meeting.

Here's the latest news:
http://www.moneymanagement.com.au/n...gy-claim-insto-support-in-bid-for-lm-feeder-f

Putting the spruiks aside, I believe this excerpt:
"Trilogy said it had received early support for the takeover bid. It said despite the low response rate of less than 20 per cent, which was due to mail delays particularly from New Zealand, the votes received reflected an 85 per cent approval rate for the Trilogy takeover."

I'd reckon that would be the case - after all, that'd be driven by investor discontent with LM - but once investors get a decent sniff of the real Trilogy then I'd say once investors factor in Trilogy's failures, Trilogy "dream run" will grind to a halt (at least I hope it does).

For my part, I can see the problems with LM, but I can worse with Trilogy - this isn't a choice between the best, it's a choice between two, one (Trilogy) in my assessment, much much worse than the other.

I'd hate to say "I told you so" - but, by golly I will if Trilogy takes over the funds and they crash as did the PFMF. There is no way I'd want other members of any other fund/s to feel so badly about a manager as I do about Trilogy. No investor needs to feel he/she is in a hopeless situation - but that's how I feel about my investment in the PFMF with Trilogy as manager.

LM is not the best manager, but it's the best on offer on 1 November 2012.

It seems institutional investors will sway the vote to Trilogy in the wholesale fund.

Trilogy at Wakerley - PFMF Asset 18

Recent photos from Wakerley

(after 3 and a half years of Trilogy as manager)
Photos taken sometime last week

Photo 1 - http://www.moneymagik.com/wakerley_1.jpg
Photo 2 - http://www.moneymagik.com/wakerley_2.jpg
(as I understand it, the only advertising on the estate)
Note the advertising - the phone number has been disconnected!

More on Wakerley ---> Wakerley (asset 18) http://www.woodgrovewakerleymanly.com.au/contact-us/
Supposedly, only one property sold: http://www.woodgrovewakerleymanly.com.au/masterplan/

Try ringing the number on the Foxwood plan of the Wakerly project (DISPLAY HOME OPEN SAT TO WED 12pm to 4pm PHONE: 07 3890 7545) Anybody home? I called - it's been disconnected - did you call?

Don't believe the photos? Go and have a look for yourself!

www.moneymagik.com will be updated with more pictures taken last week (hopefully this evening)

Good luck for those in any LM who want Trilogy as a manager ...

Trilogy at the PFMF's asset at Wakerley

I should point out that all construction shown was carried out BEFORE Trilogy took over the fund. No work has been carried out on the assets (as shown) under Trilogy's management of the PFMF. The construction work has been left to the elements. The ripped sarking, weather timbers, and unkept landscape lay bare as a testament to Trilogy's management of the asset.

www.moneymagik.com has been updated to 9 photos (taken last week by a member of the fund).

Trilogy at the PFMF's asset at Wakerley

I took a drive down to PFMF asset 18 at Wakerley this morning. I found that all completed houses/duplexs have been sold. I spoke to a group of three owners and not one of them was happy. They all complained about deflects with their homes which were not resolved. They also complained about the mess of the fenced area which looked like a war zone, was unkept, and contained partly-constructed houses which were severely weather-beaten.

Here's the map as I see it:
http://www.moneymagik.com/map_asset_18.jpg

Quite a number of the duplexes seem to be rented.

It's quite a mess down there.

Any updates will be posted on www.moneymagik.com

(keep in mind that it's now three and a half years since Trilogy took over the PFMF)

Did You Ever See Such A Thing In Your Life?

http://www.youtube.com/watch?v=MfaChKSV8kg&feature=fvwrel


http://www.lmaustralia.com/Download...ult-and-business-as-usual-for-LM-01-11-12.pdf


Did you ever see such a thing in your life?

Institutions voted to impose a .5% fee on investors, a fee that investors would otherwise NOT have paid under LM!

I guess it's not going to affect the institutions, but it will affect the investors.

Only 5 out of 237 investors supported Trilogy - The first BIG question of the day, "why so many?" - maybe the 5 were uninformed.

Now, there's stupid, and there's STUPID - the second BIG queston of the day, "is it possible to be dumber than STUPID?" - It seems that it is.

Wouldn't it make more sense to wait for a meeting of the main fund? After all, the only difference now is that Trilogy gets an income of about $350k (according to LM) it wouldn't otherwise have received, and investors will be paying that $350k, an amount they otherwise would not have paid - and the outcome for the main fund will be EXACTLY THE SAME as if the vote NEVER happened.

I hope they'll forgive me for saying it, but I think it was quite a dumb move.

ASIC is NOT a Prudential Regulator!

Geez, I wish others would post.

"“Trilogy does not control any assets as it is a feeder fund of the LM First Mortgage Income Fund. And for this, they are charging investors fees equating to $350,000 for managing nothing, and for land locking investors”, says Drake."

There is no rule that says investors have to vote smart. In fact, ASIC has warned investors that its not a prudential regulator. ASIC will not concern itself if investors want to vote for something that causes them to lose, be it losing .5% FUM or losing all of their respective investments.

"An attending investor was dumbfounded as to how his trustee could vote on behalf of himself for a fund manager who has no control over the assets. This was compounded by the fact that if he were to stay at LM, there were no fees to be paid as a feeder fund. At the meeting, Trilogy confirmed they would now charge him 0.5%. The investor said “but wasn’t this about saying you could do it for less fees than LM?”
Trilogy did not respond."

Don't forget .. you're dealing with Trilogy - Philip Asley Ryan is a director or Trilogy:
http://moneymagik.com/trilogy_more_on_ryan.php

Trilogy lost investors money in its Trilogy PMMMF:
http://moneymagik.com/more_on_Trilogy_PMMMF.php

Trilogy lost investors money in its Trilogy Healthcare REIT:
http://moneymagik.com/analysis_REIT.php
(also Trilogy took in $3,555,000 at $1.00 per unit when the current value of each unit was only $0.63/unit - now, that should be ringing alarm bells, right? Remember ASIC doesn't care if investors want to give money away - ASIC is NOT a prudential regulator - let the buyer beware, right?)
(Trilogy also made sure it got Rojacan's money out by spending near $500k of investors money in order to lure other investors into the fund - Rojacan is a company associated with Rodger Bacon of Trilogy)

Did anyone really expect Trilogy to answer when confronted with the proposition that the vote was supported to afford investors a lower value of fee than with LM? Really, did anyone? It's business, and investors made a choice - Trilogy gets an income stream - investors pay more - simple really, isn't it?

And then there's all the losses investors in the Trilogy PFMF have lost:
http://moneymagik.com/three_part_trilogy_funds_management_tragedy.php

LM warned investors that they'd pay more in fees if Trilogy won - it's not as if the result come from the ether.

Now Trilogy stands to make that $350k for managing nothing except the single investment in the LMFMIF.

This'll go down as one of the dumbest moves in MIF history - and Trilogy'll be laughing all the way to the bank.

Would I be surprised if the guys and gals down at Trilogy will be celebrating tonight ? No, of course I wouldn't - if I was them, I'd be laughing my head off.

PREDICTION

My prediction is that Trilogy will come under a lot of pressure to run the fund for no more than the outgoings. In other words, Trilogy will run the fund for 0% management fees. In my view, if there's disquiet in the feeder fund they control, it'll probably sink Trilogy's chances of having a shot at the main fund.

However, having said that, if Trilogy feels it's got no chance at the main fund, it'll probably be more inclined to continue with the application of the .5% fee.

Anyone else got a prediction?

As a note, if members called another meeting for next month and voted LM in, even the cost of a $50k meeting would save the feeder fund $300k in the first year alone if LM is brought back as RE.

Re: PREDICTION

ASICK said:

My prediction is that Trilogy will come under a lot of pressure to run the fund for no more than the outgoings. In other words, Trilogy will run the fund for 0% management fees. In my view, if there's disquiet in the feeder fund they control, it'll probably sink Trilogy's chances of having a shot at the main fund.

However, having said that, if Trilogy feels it's got no chance at the main fund, it'll probably be more inclined to continue with the application of the .5% fee.

Anyone else got a prediction?

As a note, if members called another meeting for next month and voted LM in, even the cost of a $50k meeting would save the feeder fund $300k in the first year alone if LM is brought back as RE.

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Thanks Asick for all your information. I may have kept quite but have been following all 174 entries. Being an investor in the LM Wholesale First Mortgage fund through one of the platforms I am absolutely dismayed (understatement) by what has been going on with this fund over the last four years.

The change of RE to Trilogy is the last straw especially now we will be paying 0.5% for nothing. As you say, Trilogy must be laughing. But what could we have done when we have no voting rights whatsoever. All voting rights are in the hands of our platform and I am sure they voted for Trilogy. The big question is, why would they vote for a Company with such a bad track record? There has to be something in it for them!

Calling for a meeting to switch back to LM (lesser of two .....) is not such a bad idea but how to get backing of the platforms, who after all are meant to have the interests of investors at heart.

Re: PREDICTION

Mysteryman said:

Thanks Asick for all your information. I may have kept quite but have been following all 174 entries. Being an investor in the LM Wholesale First Mortgage fund through one of the platforms I am absolutely dismayed (understatement) by what has been going on with this fund over the last four years.

The change of RE to Trilogy is the last straw especially now we will be paying 0.5% for nothing. As you say, Trilogy must be laughing. But what could we have done when we have no voting rights whatsoever. All voting rights are in the hands of our platform and I am sure they voted for Trilogy. The big question is, why would they vote for a Company with such a bad track record? There has to be something in it for them!

Calling for a meeting to switch back to LM (lesser of two .....) is not such a bad idea but how to get backing of the platforms, who after all are meant to have the interests of investors at heart.

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Thanks for posting Mysteryman - if only more members would express their views. I'm not an investor in any LM fund - I'm merely a concerned investor from another fund who's "been there, done that" (so to say). While I'm able to post with prolixity, my money is not at risk in your fund.

I think LM has learned a valuable lesson that City Pacific wasn't willing to learn, and the lesson is that LM's management of the fund is vulnerable to a raider (such as Trilogy) because the manager has not met the concerns of investors. Trilogy called it "capitulation", but I call it "common sense survival" - the move from the ego-driven (I think IrisihDan raised this point, and I agree) manager-centric management of the fund to a more investor-centric mangement is one that I think investors should appreciate (with no better alternative in the mix).

Further, blame is able to be sheeted home to LM at every stage, with Trilogy, in my view, that simply would not change (blame would be still sheeted home to LM) - such an outcome is not good.

I, and other members of the PFMF, received letters from ASIC pointing out that ASIC is NOT a prudential regulator - ASIC really doesn't care about substance (outcome), it cares about form. Note the case ASIC mounted against the CBA (and settled) - the matter was about form, about ASIC's allegations that CBA engaged in an unregistered managed fund which allegedly caused consequential loss to investors. Form is important to ASIC, substance is not.

So, I wouldn't be thinking that ASIC is going to come riding to rescue any time soon.

The better outcome would be that Trilogy runs for the LMFMIF as soon as possible so the matter is able to be resolved - say, a meeting is called within the next week or so - if not, if I was an investor in the feeder fund, I'd be looking to get rid of Trilogy.

In the PFMF, it took Trilogy nearly three years to bring suit against the ex-directors of City Pacific, a law suit which in my opinion is a real crock and a waste of the fund's money. Even IMF wouldn't touch it, and that's after paying for the public examination of the ex-Citypac directors and others (including CBA folk).

Days turn to weeks, and weeks to months - even if Trilogy does nothing, it'll be raking in about $7k/week for SFA so there's no reason to rush into anything - however, I think that's not the case for investors themselves - time is of the essence and the matter should be resolved.

I think the platforms (as they seem to be called) must see the good sense in getting rid of Trilogy if Trilogy is unable to oust LM from the main fund - and of course, if Trilogy is able to oust LM, then the matter is moot. The game was always about taking over the main fund - I'm surprised the platforms couldn't put just a couple of "neural connexions" together to note that there was no benefit to taking over either of the feeder funds, there was only benefit from taking over the main fund - in fact, it was plainly pointed out by LM that a Trilogy takeover of a feeder fund would result in a .5% FUM fee payable to Trilogy for that fund - do the platforms reside in a mental vacuum?

I learnt a long time ago that residing on the upper floors doesn't necessarily make companies "smart" - sometimes hypoxia strikes in such rare-air enviorments - decision making becomes fuzzy and disoriention follows - pilots have known to fly upside-down into moutains - platforms have been known to vote for Trilogy. How much do the platforms know about Trilogy? I don't know, but they should have made it their duty to find out - Did they do that? I suspect they didn't.

I still think that Trilogy will be "forced" to manage the fund at cost - otherwise, the discontent amongst ordinary investors in the platforms will take its toll. I'm sure even the platforms don't need the angst and will pass on the pressure to Trilogy - remember, if the platforms aren't pleased, then the end could be nigh for Trilogy, before the whole show even gets off the ground.

The next week or so could be very interesting - I think LM is quite bemused by the whole outcome, and with good reason. As LM says, "For LM, it's business as usual" (or words to that effect - a phrase that I seem to recall).

Dear all

Please be patient re this -its my first posting, please excuse any errors I may make re spelling

Like other Investors in the LMWSFMIF I had so far chosen not to post here, up until now. My background with the investment is very similar to Mysteryman- I am on the Asgard Platform, and yes they did vote to support Trilogy, although they will not confirm it in writing to me - yet!!

For us so called Platform/Master Trust investors, I was not communicated with in advance of the Asgard decision, although FM from LM had indicated they already had. They will say the PDS says they didnt have to. I am currently writing to the Trustee in Asgard Capital Management to express my concern about their decision to support Trilogy

For the information of other forum members, I am known to Dinga, we have communicated by Email often. Since applying for a closure of my Asgard account and redemption in LM on 30 July 2008, I have been in constant communication with Francene Mulder of LM and the so called "Scarlet Pimpernel" Mr Peter Drake

I am especially not pleased with the latest LM Press Relaese - "Good Result and Business as Usual" I have wrtten to Drake and Mulder this morning about that communication which is unhelpful to investors in the WSFMIF as it reads like we are cut adrift, and they were only really concerned about the CPAIF

Drake has already replied this morning and mentioned their poor communication, which he acknowledges has been an LM weakness. Drake said to me Trilogy will never get at the Funds assets, we will see.

I must say I have enjoyed reading these Forum postings, and like Mysterman I have read them all, including all the enlightening postings by ASICK who I know is not an LM investor. ASICK your contributions have proven very valuable, even when you have banged on endlessly re Trilogy. I think your views about what should happen are also correct.

I dont propose to write down my 4 year plus history of communications with LM or Asgard because most of what I may say has been said before, HOWEVER I strongly doubt if any of these people could ever be trusted.

I post here this extract From Asgard to Advisors re the WSFMIF dated 2 Nov

"We understand that Trilogy will shortly convene a meeting of members in the LM First Mortgage Income Fund (FMIF), of which the Fund is a feeder fund, to vote on resolutions to replace LM with Trilogy as RE of the FMIF. Prior to this, it will also call a meeting of members in another feeder fund to the FMIF to consider similar resolutions to replace LM with Trilogy as RE.
If Trilogy is appointed RE of FMIF, then Trilogy will commence the orderly realisation of FMIF’s assets and return capital to investors.
We will keep you informed of any progress made by Trilogy to replace LM as RE of the other feeder fund and FMIF".

I will keep reading with interest this Forum and will add to it when appropriate

Hi Rodent69, great to see you post. While there's much to discuss as a result of your posting, I'll take a break from my endless banging-on re:Trilogy in the hope that more LM investors will participate in the discussion. Good onya for taking the leap and making a great posting.

http://www.moneymanagement.com.au/n...rilogy-successful-in-stage-one-stoush-with-lm

Funny, the only happiness seems to be over at Trilogy ....

To those who support Trilogy, I'll reiterate my concern, "Be careful, you might get what you wish for".

ASICK said:

http://www.moneymanagement.com.au/n...rilogy-successful-in-stage-one-stoush-with-lm

Funny, the only happiness seems to be over at Trilogy ....

To those who support Trilogy, I'll reiterate my concern, "Be careful, you might get what you wish for".

Click to expand...

ASICK, I'm an investor in the FMIF and haven't posted for a long time, but I always keep up with and appreciate your's and other's views.

We seem (not surprisingly) to have different views from LM and Trilogy on what will happen next: LM say that trilogy won't have a hope in hell of taking over the main LMFMIF,I think becaause there are too many individual investors who wouldn't trust Trilogy to look after their money, or perhaps because they've read your posts! On the other hand, Trilogy seem to think it will be a piece of cake and the funds will all fall over like dominos into their hands.

I would be interested to know your expert view on this, i.e. how difficult is it really going to be for Trilogy to get enough votes to gain control of the main fund?