Wellington Capital PIF/Octaviar (MFS) PIF

[newwwtrader]

Re: Octaviar MFS Premium Income Fund PIF

Hi DoraNBoots,
It is interesting to hear that you believe JH would stay as RE after losing the vote because the RE business will still make its 0.7% fee until the PIF is sold down over the next year as a simple liquidation service. That is not her business. What happens to her staff after the PIF is closed. Personally I would expect her to walk away as quickly as possible as I do not believe that simple liquidation is part of her business model.

It appears to me that her personal goals are to help the PIF investors recover their money and continue to receive distributions. But her business goal is probably to create a long term managed fund that would eventually list on the ASX.

I do not think that JH is really short of money.

How many other REs are interested in PIF. It is not an absolutely fabulous business opportunity. Unit holders are running everywhere and anywhere - Solicitors, ASIC, Courts, Politicians etc. - does not sound like a normal group of happy investors to me.
Consider - Yes, Yes, No.
Regards, RickH:couch

I believe even with a loss to res #1 WC will still stay on.

In relation to her staff, offices etc when (taking the hypothetical here) the PIF is concluded - well I would believe that very few of the staff would be new recruits that were brought on specifically to deal with the PIF. They would be current WC staff being utilised in a variety of different roles.

Your statement that her personal goal is to help PIF investors recover their money. Well if this truly is the case, then even with a loss to res #1, you would assume that she would stay on as the RE. As she would be achieving her personal goal of helping out, whilst still retaining a "healthy" income herself by being the RE.

 

[Burnt]

Re: Octaviar MFS Premium Income Fund PIF

Hi RickH
........For these reasons I still believe a no no no vote is best and then a new meeting called quickly putting up changes required for orderly work out. If WC is not interested in this then so be it I am sure there are others who for this type of fee will take it on.

This will still get us the same money by christmas and get us our 45 cents plus over the next few years which I cannot see happening for many years to come from the NSX.

The reason for the NSX is simply the long term value it puts on WC balance sheet and is a clear conflict over what is best for the unitholders versus what is best for the manager. It has nothing to do with the redemptions as even the funds own constitution gives the manager power to extend the freezing period. Have a read of it carefully and it shows up more lies that WC have told about why they want to list the fund.

I think it would be pretty childish of WC to simply walk away if they lose the battle to list on the NSX.

I think at the moment they are just playing hardball. Hoping the older unit holders will crumble and they can do what they like.

I believe if they do lose res #1. They wont take there ball and wonder off. They'll hang around. Because its not like they are being asked to manage the fund for free.

It is not a vote for or against the RE. The RE is JH and co and a No vote won't remove them as RE. All the No vote (for resolution 1) will do is say we don't agree with the changes you are asking us to sign off on.

We would not be saying we don't want the constitution to be changed we would just be saying No to the changes WC have proposed.

Page 6 of the EM:
"Unitholders have a right under the constitution to call a general meeting and consider other alternatives."

Hi Flatback,
.........A NO vote for Res (1) does not lead down the path of total destruction, It merely calls us all back to the table, to consider mutually agreeeable alternative ideas.

I am currently considering changing my vote to: (1)NO (2)YES (3)NO.
Best wishes to all.

Hi All,
Please everyone, look at the facts as pointed out above in summaries of previous posts. Look at what our rights are and the ability we have to exercise them.
A NO VOTE DOES NOT MEAN LIQUIDATION OF THE FUND.
A NO VOTE DOES NOT MEAN REMOVAL OFTHE RE.
A NO VOTE DOES NOT MEAN THE FUND WILL BE UNABLE TO PAY THE PROMISED DISTRIBUTIONS THIS YEAR.
A NO VOTE MEANS THAT WE DON'T ACCEPT THE PROPOSED CHANGES TO THE FUNDS CONSTITUTION I.E. NSX LISTING AND A DEPLETION OF OUR RIGHTS.
Please keep your minds open and do not give up and resign yourselves to something you are not completely happy with. Give the facts careful consideration.
Remember too, even if you have already voted - you have the right to change your vote !!!!
Cheers.

 

[JohnH]

Re: Octaviar MFS Premium Income Fund PIF

Hi All,
Please everyone, look at the facts as pointed out above in summaries of previous posts. Look at what our rights are and the ability we have to exercise them.
A NO VOTE DOES NOT MEAN LIQUIDATION OF THE FUND.
A NO VOTE DOES NOT MEAN REMOVAL OFTHE RE.
A NO VOTE DOES NOT MEAN THE FUND WILL BE UNABLE TO PAY THE PROMISED DISTRIBUTIONS THIS YEAR.
A NO VOTE MEANS THAT WE DON'T ACCEPT THE PROPOSED CHANGES TO THE FUNDS CONSTITUTION I.E. NSX LISTING AND A DEPLETION OF OUR RIGHTS.
Please keep your minds open and do not give up and resign yourselves to something you are not completely happy with. Give the facts careful consideration.
Remember too, even if you have already voted - you have the right to change your vote !!!!
Cheers.

Hi Burnt,

Could you also (and as succinctly) list the proposed recommended alternatives to the "No" vote?

 

[RickH]

Re: Octaviar MFS Premium Income Fund PIF

Hi Newwwtrader,
Interesting statement. You think that JH will stay on if less than 75% is in favour of her doing what she believes is the best option.
Please consider:
If you expanded your service business and less than 75% of your new clients voted for your preferred strategy - Would you really want to be associated with such a client controlling business? - Problems everywhere.
Please remember that if JH lost the vote and then completed her duties as directed by the unit holders (JH would not be in control/personality problem?). It could be said that JH was only interested in the money and not trying to help unit holders. It sounds like too much trouble for no long term benefit. If I was JH I know what I would do.
Regards, RickH:couch

I believe even with a loss to res #1 WC will still stay on.

In relation to her staff, offices etc when (taking the hypothetical here) the PIF is concluded - well I would believe that very few of the staff would be new recruits that were brought on specifically to deal with the PIF. They would be current WC staff being utilised in a variety of different roles.

Your statement that her personal goal is to help PIF investors recover their money. Well if this truly is the case, then even with a loss to res #1, you would assume that she would stay on as the RE. As she would be achieving her personal goal of helping out, whilst still retaining a "healthy" income herself by being the RE.

 

[newwwtrader]

Re: Octaviar MFS Premium Income Fund PIF

Hi Burnt,

Could you also (and as succinctly) list the proposed recommended alternatives to the "No" vote?

I know this is not directed at myself, but, hey i'll throw my two cents in.

What I believe should happen is this.

Vote No for res #1

WC remain as the RE (provided they dont take there ball and go home)

Run the fund as they proposed if listing on the exchange were to occur (paying distribution as proposed)

Adopt new constitution - freezing redemptions for another 180 or 360 days (the length of time would depend on the position of the fund)

Allow redemptions or partial redemptions at a later time.

I'm sure if WC can run the fund as well as they claim they will be able too and can achieve the targets that they believe they can achieve then there would be a lesser amount of people seeking to exit. Further it may encourage others to invest. However, that all depends on the performance of WC.

 

[JohnH]

Re: Octaviar MFS Premium Income Fund PIF

I know this is not directed at myself, but, hey i'll throw my two cents in.

What I believe should happen is this.

Vote No for res #1

WC remain as the RE (provided they dont take there ball and go home)

Run the fund as they proposed if listing on the exchange were to occur (paying distribution as proposed)

Adopt new constitution - freezing redemptions for another 180 or 360 days (the length of time would depend on the position of the fund)

Allow redemptions or partial redemptions at a later time.

I'm sure if WC can run the fund as well as they claim they will be able too and can achieve the targets that they believe they can achieve then there would be a lesser amount of people seeking to exit. Further it may encourage others to invest. However, that all depends on the performance of WC.

Thanks NewTrader. That is constructive.........but see Rick's note re: Jenny remaining if a "No" vote.

 

[zixo]

Re: Octaviar MFS Premium Income Fund PIF

Its been interesting and entertaining reading the posts along the way in regards to the whole "how to vote" procedure.

Ive enjoyed reading the spirited posts by people who are either supportive of Wellington, or against Wellington. Its crucially important that we vote in a way we feel will best benefit the fund and Investors.
Although everyones contribution is important our personal opinion doesnt mean we're right, we're not mind readers and no-one really knows whats best. Least of all financial advisors.

ATM The one thing everyone has in common is apparent lack of trust wellington has in doing the right thing by us the investors.

Perhaps we should be contemplating that JH's Past should not be considered in deciding our vote.
If we're wary at her association with Chris Scott and Octaviar in the past we must also forget the accolades she received as being the business woman of the year.

We should all Keep in Mind. Although this forum may have alot of attention - it discounts the people who are unaware of its ongoing conversations and are simply going to go along with the recommendations that were sent out in Wellingtons explanatory memorandum.

Dont be surprised that when the fnal count is in its going to be everything Wellington wanted..Thats when the real test will begin.

The chickens havent hatched yet but maybe we should start looking at where we go from there?

Cheers

 

[ian1328]

Re: Octaviar MFS Premium Income Fund PIF

Why do some people not trust WC . Every big company writes complicated stuff which makes it hard to understand, its about litigation. The difference here is we have someone who was recently Qld business woman of the year with a string of credentials behind her. She jumped at the chance to take on PIF, no one else tendered. Admittedly, if she gets the yes vote her company will expand and she will make more money, but any RE is going to, and JH does seem to run on high octane fuel, so why not give her a go?

 

[Juan Mortyme]

Re: Octaviar MFS Premium Income Fund PIF

She [JH] jumped at the chance to take on PIF, no one else tendered.

No one else tendered??? One report in the media said that up to 25 other parties were interested -- see article below which appeared in the GC Bulletin on 13/6/08 p. 102
-----------------
Some premium questions
by Nick Nichols business editor

DISGRUNTLED investors in Octaviar's frozen Premium Income Fund are gathering numbers to force its new manager to tell them how much money they have lost.

Melbourne investor Adam Thorn, who put $250,000 into PIF in 2006, said he was hopeful Gold Coast investors could join the battle to `get the numbers over the line'.

The action group needs to get about 100 unit-holders, or about 5 per cent of the debt owed by the fund, to be able to call a meeting.

An announcement was made this week by Jenny Hutson's Wellington Capital, the fund's newly appointed responsible entity, that a meeting scheduled for the first week in July would stop the group from forming, said Mr Thorn.

The Premium Income Fund (PIF) has 770 million $1 units tied up for 360 days beyond their due maturity date.

It was the flagship investment vehicle for troubled Gold Coast financial services group Octaviar, formerly known as MFS, but the full extent of its finances has not been disclosed.

Wellington Capital assumed control of the fund after S8 founder Chris Scott completed a boardroom coup at Octaviar.

Mr Thorn said one of the issues the action group wants to confront was the immediate handover of control from Octaviar to Ms Hutson, who was the former chairperson of S8 - the tourism and travel group that is now part of Octaviar's Stella business.

Mr Thorn said he there were up to 25 other contenders vying for control of the fund, although they `never got a foot in the door'.

``That's something the action group would like the opportunity to explore and take offers and look at other responsible entities,'' he said.

``A lot of investors are concerned about the connection between Jenny Hutson and Chris Scott and the agenda of Chris Scott in getting Ms Hutson on board.''

Mr Thorn conceded Mr Scott could be acting in the best interests of investors by appointing Ms Hutson.

``But because we haven't had any transparency, it's very hard for a lot of investors, especially the elderly out there who now have to go back to work or refinance their homes.

``They just want answers. That's all they want.''

Mr Thorn said there were no detailed figures available on the fund's financial position.

``How much of the assets are invested in Octaviar or related entities?

``If Octaviar goes under, how much does the PIF stand to lose?''

Mr Thorn said although information was scant, he remained hopeful.

``I don't believe we'll get our dollar per unit we originally paid, but I don't think it's going to be as bad as some of the recent collapses we've seen.

``I wouldn't even like to hazard to guess what the worst-case scenario would be.

``By what Wellington Capital have been saying, they seem to be proactive, but I guess investors want to see action more than words.

``What we're doing is not personal. It's not against Jenny Hutson, but it's our money we have invested and we want to be sure that they remain transparent so we know the worst-case scenario.''

In her latest email to unit-holders, Ms Hutson said she would be able to `clearly define' the future of the fund at the proposed July meeting.

``I take the responsibility of trying to achieve the best outcome seriously,'' she said.

Mr Thorn said it was likely the response had come following acrimonious chatter on the Aussie Stocks Forum.

-----end of article------

 

[breaker1]

Re: Octaviar MFS Premium Income Fund PIF

For some of those who are recommending the No for Res 1

It appears you don't want the constitution, but you do want Jenny to remain as RE. This tends to suggest that you don't have another RE to replace Jenny/WC.

I don't know about you but JH does not strike me as a person who would stick around to be told what to do.

If you do want JH to hang around and you have not got another RE that is you beaut! I would not be calling her bluff as there is too much at stake now!

 

[Burnt]

Re: Octaviar MFS Premium Income Fund PIF

I know this is not directed at myself, but, hey i'll throw my two cents in.

What I believe should happen is this.

Vote No for res #1

WC remain as the RE (provided they dont take there ball and go home)

Run the fund as they proposed if listing on the exchange were to occur (paying distribution as proposed)

Adopt new constitution - freezing redemptions for another 180 or 360 days (the length of time would depend on the position of the fund)

Allow redemptions or partial redemptions at a later time.

I'm sure if WC can run the fund as well as they claim they will be able too and can achieve the targets that they believe they can achieve then there would be a lesser amount of people seeking to exit. Further it may encourage others to invest. However, that all depends on the performance of WC.

Thanks Newwwtrader,
One example of alternative resolutions to be voted on:-
- RE to immediately facilitate a straightforward method for the transfer of units between existing unitholders and communicate this clearly to all members (with their fee not to exceed 1%) as is currently allowed for under the present constitution.
- RE continue with it's plan in managing the funds assets.
- RE pay distributions in October and December as proposed.
- Amend constitution to extend the freeze on redemptions for a further 180 days.
- 3 months prior to the end of extended freeze, RE to report to members on the performance on the Fund, and determine whether partial redemptions (similar to proposed buy back or better) are possible at the end of the 180 days (same timeframe as proposed buy back). Also determine whether to extend the freeze for a further 180 days. And so on.......

Another alternative would include the above but perhaps replace RE,,,,,,or appoint an administrator to perform an orderly wind up on the fund,,,,,,

By the way, I'm no legal expert at interpreting the Corporations Act, but I gather that the RE of a Fund remains the RE until ASIC is notified of another RE taking over. Pretty sure they can't just walk away !!!!!!Even if they don't like being told what to do.....it's their job, we employ them and pay them!
If the RE wants to retire they must call a general meeting for members to choose another RE (they have to provide a choice!!!). If the members do not choose another RE, the current RE can apply to the court to have a temporary RE appointed.
The onus seems to be on the current RE to replace themselves.
Also, If the NO vote succeeds, I am fairly certain that no matter how full of confidence Wellington are, they would have to have an alternative course of action planned. It would be very unprofessional of them not to.
So Breaker1, I don't know who's calling who's bluff.......pretty sure it's Wellington.

 

[selciper]

Re: Octaviar MFS Premium Income Fund PIF

Breaker1 - Can only agree with your last post. A NO vote would be a gigantic leap into the dark. So many of the well-intentioned scenarios presented on this thread are based only on assumptions. This lock-out has gone on for far too long.

 

[newwwtrader]

Re: Octaviar MFS Premium Income Fund PIF

I do believe that WC would stay on if the vote was for no on #1. That is my opinion.

Money talks and their is obviously money to be made from the management of the fund. So of course WC will stay on.

If not, I am sure others would step up to the plate to take on the role. There is no doubt that people would be prepared to do this. Do I personally know them - No. But lets not live in a bubble, they would be out there. Even the newspapers have reported that so it must be the truth lol.

By voting no, you are not questioning her ability to manage the fund.

A no vote is simply a vote against a listing in the NSX and the abolition of redemptions.

You may say that you are calling her bluff. That may be so. But isnt that exactly what she is doing to the investors. Unitholders have one key advantage in this though. WC/JH has her reputation at stake. Imagine how it would look in the media, we have this white knight who takes her ball and goes home because she loses the vote. If that were to happen she would be exposed for all to see as someone who was just coming in to take advantage of the innocent unitholders (this may not be the truth, but it is certainly a spin that could be put on it).

The fact is, I believe res 1, has no bearing at all in the day to day operation of the fund. All that it does is abolish redemption rights and expose your units to the market forces of the NSX (and you never know who may be laying in wait to pick up the pieces of those many who would sell out).

For some of those who are recommending the No for Res 1

It appears you don't want the constitution, but you do want Jenny to remain as RE. This tends to suggest that you don't have another RE to replace Jenny/WC.

I don't know about you but JH does not strike me as a person who would stick around to be told what to do.

If you do want JH to hang around and you have not got another RE that is you beaut! I would not be calling her bluff as there is too much at stake now!

I do

 

[DoraNBoots]

Re: Octaviar MFS Premium Income Fund PIF

For some of those who are recommending the No for Res 1

It appears you don't want the constitution, but you do want Jenny to remain as RE. This tends to suggest that you don't have another RE to replace Jenny/WC.

I don't know about you but JH does not strike me as a person who would stick around to be told what to do.

If you do want JH to hang around and you have not got another RE that is you beaut! I would not be calling her bluff as there is too much at stake now!

Breaker1, in your opinion, what part of resolution 1 benefits unitholders?

This is a negotiation. It's a standard tactic to ask for more that you are willing to accept. There is no need to fear what is merely an opening offer.

It is worth noting that WCIM is an employee of the PIF of which unitholders are the owners. We direct the RE for OUR benefit.

Boots

 

[Burnt]

Re: Octaviar MFS Premium Income Fund PIF

By the way, I'm no legal expert at interpreting the Corporations Act, but I gather that the RE of a Fund remains the RE until ASIC is notified of another RE taking over. Pretty sure they can't just walk away !!!!!!Even if they don't like being told what to do.....it's their job, we employ them and pay them!
If the RE wants to retire they must call a general meeting for members to choose another RE (they have to provide a choice!!!). If the members do not choose another RE, the current RE can apply to the court to have a temporary RE appointed.
The onus seems to be on the current RE to replace themselves.
Also, If the NO vote succeeds, I am fairly certain that no matter how full of confidence Wellington are, they would have to have an alternative course of action planned. It would be very unprofessional of them not to.
So Breaker1, I don't know who's calling who's bluff.......pretty sure it's Wellington.[/QUOTE]

 

[Juan Mortyme]

Re: Octaviar MFS Premium Income Fund PIF

Why do some people not trust WC .

Maybe because of all the past connections between different people and companies which makes the average Joe suspect that this is a classic case of nepotism. :shake:

In Breaker's 2nd post, the issue of "mate's rates" was brought up when PIF sold its share of Geo Property Group.

Here is the article as it appeared in the Melbourne Herald Sun on the 16/05/08, page 47.
--------------------
No mates' rates, says fund buyer
by Ben Butler
A FUND formerly controlled by debt-laden financier MFS -- now known as Octaviar -- has sold its stake in an MFS offshoot for a bargain price.

Business associates of new Octaviar executive director Chris Scott feature on both sides of the deal.

The Premium Income Fund yesterday sold its 9.4 per cent of Geo Property Group, the former MFS Diversified, to listed investment company Trojan Equity for $10.22 million.

At 25.5 a share, this represents a significant discount to Geo's closing price yesterday of 39.

Octaviar sold management rights to the troubled fund to Wellington Capital, a company headed by Jenny Hutson, last month.

Buyer Trojan Capital is chaired by Andrew Kemp.

Both sat on the board of Chris Scott's S8 group before it was sold to MFS.

Trojan Equity managing director Troy Harry said the company had done ``a pretty good deal'' but denied getting mates' rates.

He said no-one knew how much Geo shares would fetch yesterday, after emerging from a two-month trading suspension.

Under the terms of the deal, the PIF receives 40 per cent of any profit Trojan makes by selling the Geo scrip.

``They (the PIF) have an urgent need for funds,'' Mr Harry said.

``They were able to meet their requirement for cash now and also provide some upside for their unit holders.''

He said Trojan only became aware the stake was for sale after the PIF board rejected other bids yesterday afternoon.

It is believed other bids valued the scrip at between 35 and 40.

Mr Harry said Brisbane was ``a small place''.
--------end or article----------

 

[great dame]

Re: Octaviar MFS Premium Income Fund PIF

Hi All

Just following on from the projected returns I have tried to make an annual table below of projected position of the fund based on the WC bench mark allocations of our funds and numbers they have provided.

Year 0 1 2 3 4 5 6 7

Opening .45 .41 .44 .47 .51 .55 .60 .67

Distribution -.06 -.06 -.06 -.06 -.06 -.06 - .06 -.06

Income (10% pa on 55%) .02 .02 .02 .03 .03 .03 .03 .04
Growth (25% on 45%) 0 .05 .05 .05 .05 .05 .05 .06

Closing .41 .42 .44 .45 .46 .48 .50 .53

My assumptions are that NTA is 45 cents
We get 6 cents a year paid out to us.
On 55% of our money we get no growth just 10% income
On 45% we get a annual return of 25% income and growth
Growth portion is calculated on closing previous year balance so it does compound.

So based on WC own numbers and benchmarks set out in information booklet and a very generous 25% growth factor on the money they want to invest in growth assets our NTA will remain by year seven 53 cents.

For an ASX listed fund with a clean history currently many are trading below NTA.

Why for the next 7 years is this thing price going to rise above 45 cents through having as a listed fund. WC are not magicians and these are their own numbers although I dont even think they would say they could get 25% so the above numbers would get worse.

Where does the $1.00 come from ?

Their own document if you read it carefully says that an alternative moritorium and work out could be put to unit holders. It just remains very well hidden in how the phrase it.

This would get us 45 cents back in 3 years with some upside if existing asset values improved and OCV claim maximised.

This has to be in investors best interests but it is not in WC best interests as a permanent listed fund adds permanent income for them which adds to WC wealth by 10s of millions.

The only reason you would not vote no no no is if you believe WC that it is their proposal or liquidation which is simply not true.

In fact if you vote no yes no you would get the buy back which given there will be 3 cents available according to WC would allow us to get some money by christmas while either WC agreed or another RE was put in place to conduct orderly realisation and quarterly return of our money.

Its weird but no yes no option does not seem to be considered in WC booklet but I will look again.

Anyway looking forward to comments from others on the above numbers.

Iceman Thank you agai /n for the above work you have done But i cant see Wellington getting 25% growth year in year out for 7 years Also you may have forgot to allow for Wellingtons fees each year which would bring the numbers down a bit further Again thanks for your time / Dane //

 

[cashstrapped]

Re: Octaviar MFS Premium Income Fund PIF

Ask her?

 

[DoraNBoots]

Re: Octaviar MFS Premium Income Fund PIF

Ask her?

JH’s campaign is based on threats and plays on the fear of the unitholders. The resolutions she has proposed are not to our benefit but she is counting on us signing off on them by scaring us into believing we must pass these resolutions or the fund will be liquidated. The only way to deal with this type of threat is to prove you have the numbers - 26% of the vote who know you are full of BS.

This is what I am saying seamisty, there is NO alternative.
...

Oh Dear! Somebody at the end of this debacle is going to be able to say "I told you so." - For or aginst JH - who knows? - But by then it will be too late!

For some of those who are recommending the No for Res 1

It appears you don't want the constitution, but you do want Jenny to remain as RE. This tends to suggest that you don't have another RE to replace Jenny/WC.

I don't know about you but JH does not strike me as a person who would stick around to be told what to do.

If you do want JH to hang around and you have not got another RE that is you beaut! I would not be calling her bluff as there is too much at stake now!

Those that sit on the sideline discouraging others who are trying to be proactive can't expect these others to show their cards.

 

[RickH]

Re: Octaviar MFS Premium Income Fund PIF

Hi DoraNBoots,
If you had 26% of your clients voting that you were "full of BS" would you stay to help or walk away and let the liquidators take control?
Regards, RickH:couch

JH’s campaign is based on threats and plays on the fear of the unitholders. The resolutions she has proposed are not to our benefit but she is counting on us signing off on them by scaring us into believing we must pass these resolutions or the fund will be liquidated. The only way to deal with this type of threat is to prove you have the numbers - 26% of the vote who know you are full of BS.