Skip to content
International Adviser
  • Contact
  • Login
  • Subscribe
  • Regions
    • United Kingdom
    • Middle East
    • Europe
    • Asia
    • Africa
    • North America
    • Latin America
  • Industry
    • Tax & Regulation
    • Products
    • Life
    • Health & Protection
    • People Moves
    • Companies
    • Offshore Bonds
    • Retirement
    • Technology
    • Platforms
  • Investment
    • Equities
    • Fixed Income
    • Alternatives
    • Multi Asset
    • Property
    • Macro Views
    • Structured Products
    • Emerging Markets
    • Commodities
  • IA 100
  • Best Practice
    • Best Practice News
    • Best Practice Awards
  • Media
    • Video
    • Podcast
  • My IA
    • Events
    • IA Tax Panel
    • IA Intermediary Panel
    • About IA

ANNOUNCEMENT: Read more financial articles on our partner site, click here to read more.

SIGN IN INTERNATIONAL ADVISER

Access full content on the International Adviser site, access your saved articles, control email preferences and amend your account details

[login-with-ajax]
Not Registered?

Figures reveal huge scale of LM fund sales

By International Adviser, 26 Mar 14

A full year after LM Investment Management filed for administration in a Queensland Court, figures seen by International Adviser reveal how widespread the sale of its flagship Managed Performance Fund.

A full year after LM Investment Management filed for administration in a Queensland Court, figures seen by International Adviser reveal how widespread the sale of its flagship Managed Performance Fund.

According to data obtained by IA, more than 80 advisers each channelled over A$1m of their client’s money into the MPF, which is now in liquidation, but had around A$400m invested at its peak.

The document, which lists the names of each adviser who invested in the MPF, the firm they work for, where they are based and how much of their clients’ money was invested in the vehicle, also shows 13 advisers invested more than A$5m of their clients’ money into the fund, with some investing up to A$13m or A$15m.

There have been suggestions advisers who sold the fund were paid commissions in excess of 4%. Assuming a commission rate of 5%, those who sold A$1m in the fund would have earned commissions totalling A$50,000.

There are a number of advisers however, who have acknowledged their part in the distribution of the products and who have joined the Advisers Committee for Investors (ACI), which represents the interests of investors in LMIM’s range of nine funds, most of which were invested either directly or indirectly in the Australian property market.

The ACI now has 31 member companies and in the Middle East, where around a quarter of the assets were invested into the MPF, around a third of the advisers who sold the product have now joined.

One of the founders of the ACI and head of its Middle East division, Sean Kelleher, said: “Of the 28 groups which sold the product in the Middle East, we now have eight signed up. Those that aren’t signed up are representative of those who are unlicensed and are too under-resourced to help their clients in this way.”

The first signs of trouble at LMIM came in 2009 when it took the decision to close its First Mortgage Income Fund and to sell down the fund’s assets in order to repay credit.

Problems seemed to be compounded at the end of 2012 when a company called Trilogy wrenched control of the LM Wholesale First Mortgage Income Fund from it.

At the same time, however, the company’s founder and chief executive Peter Drake maintained there was nothing wrong and the group criticised Trilogy’s “woeful behaviour”. Days after Trilogy’s takeover, Drake said: “LM is a diverse multi-fund manager currently managing nine Australian funds with total assets under management with a realisation value of A$3bn.”

Five months after Drake made this statement, on 18 March 2013, the company filed for administration.
 

Tags: Australia | LMIM

Share this article
Follow by Email
Facebook
fb-share-icon
X (Twitter)
Post on X
LinkedIn
Share

Related Stories

  • Europe

    Bank Lombard Odier & Co Ltd adds BlueBay bond fund to range

    Alternatives

    Canada Life AM cuts and caps multi asset charges

  • Equities

    Mediolanum launches Best Brands global equity funds

    Investment

    HAYAH lowers entry to savings solution for UAE residents


NEWSLETTER

Sign Up for International
Adviser Daily Newsletter

subscribe

  • View site map
  • Privacy Policy
  • Terms and Conditions
  • Contact

Published by Money Map Media – part of G&M Media Ltd Copyright (c) 2024.

International Adviser covers the global intermediary market that uses cross-border insurance, investments, banking and pension products on behalf of their high-net-worth clients. No news, articles or content may be reproduced in part or in full without express permission of International Adviser.