National Australia Bank (NAB) has strongly denied accusations it is not communicating or supporting financial advisers adequately in the wake of the Brookfield Multiplex Prime Acumen Property Fund’s plummeting value.
An unnamed MLC-aligned financial adviser, speaking on behalf of a number of other advisers, said they had not received any support, communications or instructions from NAB, MLC or ThreeSixty on what advice to give clients in the wake of the collapse in the fund’s value.
“NAB were happy to talk to us when the fund was going fine, but when it exploded they have backed up and pretended nothing has happened,” the unnamed adviser said.
NAB rebuffed the source’s claims and said ThreeSixty continued to provide frequent updates about the fund since it launched and whenever information had been made available by Brookfield Multiplex – including 11 updates during September and October.
“Although we are disappointed with the unexpected poor performance of the fund, ThreeSixty has continued to keep investors informed since the fund launched and as updates are released by Brookfield Multiplex Capital Management,” a NAB spokesperson said.
Additionally, the fund was subject to MLC’s usual rigorous due diligence process and it was approved by Lonsec, Aegis and PIR before being placed on ThreeSixty’s recommended list, the spokesperson said.
In December 2008, ThreeSixty downgraded its recommendation on the fund from hold to sell, based on the latest management release.
“Furthermore, MLC advisers were only allowed to invest a maximum 5 per cent of any one client’s portfolio in the fund,” the spokesperson said.
It would be inappropriate for NAB to interfere in the running of the fund by Brookfield Multiplex, however, NAB wholesale banking had, as part of the fund’s banking syndicate, continued to support the fund and its manager, the spokesperson said.
The fund is a listed property trust with a fund size of $584 million and it owns a portfolio of central business district office assets in Sydney and Melbourne.
NAB’s wholesale banking unit acted as lead equity arranger and joint lead manager for the fund’s initial public offering (IPO) in 2006.
Investors who bought the fund’s securities during its float paid 60 cents apiece, and were legally obligated to make a second instalment of 40 cents (now 0.2237 cents due to a recent entitlement offer) in June 2011.
The main sources of inflows for the fund were ANZ and dealer groups of NAB’s wealth management arm, MLC & NAB Wealth, which include MLC Financial Planning, Garvan Financial Planning and Godfrey Pembroke.
The fund launched a $50.15 million entitlement offer on 8 October 2009 that would reduce the final instalment on existing units to 0.2237 cents.
