The Advisors Committee for Investors (ACI), a group established earlier this month to salvage as much as possible for investors in LM’s funds, said news that SunCorp had sold such a significant amount of debt to Goldman Sachs and was considering the sale of more, was of “particular concern”.
SunCorp has a first mortgage charge over Maddison Estate, a land development project which the LM Managed Performance Fund has a A$250m loan into. The ACI said it is not clear whether the “non-core assets” sold by SunCorp to Goldman Sachs included the Maddison Estate first mortgage.
Speaking about the deal, ACI chairman Simon Litster said: “The Australian press have announced the Suncorp/Goldman Sachs deal and speculate that a further A$700m could be offloaded by the end of July.”
The concern is that if Goldman has bought the debt it could further complicate investor recovery plans which are just getting underway.
The ACI said matters had not been helped by trustee KordeMentha which has so far not provided clarity on a loan call which was due at the end of June.
“Our focus now," said Litster “is to fast-track ACI membership sign-on in order to assess the ACIs ability to acquire the first mortgage on behalf of investors.”
The ACI estimates it has around 30% of investors represented by their IFAs in the group, but said it is aiming for at least 50%.
LMIM ran a collection of funds which invested in the Australian property market, either by buying property and land for development directly, or by providing mortgages to developers and suffered badly due to the effects of the global financial crisis.
The company was put into administration in March this year.
IFAs wishing to join the ACI, or who want more information, are urged to contact Simon Litster or the group on aci@f-p.hk.
Click here to read how a former LM salesman based in the UK described events
