Administrator PPB intends to proceed with plans to wind up a number of embattled financial firm Trio Capital’s products, despite concerns such action may devalue the funds’ assets.
On 8 February, a PPB letter to unitholders said that following an initial investigation into each of Trio’s managed investment schemes, a number of funds had substantial assets that were unlikely to be realised in the short term and were therefore proposed to be wound up.
PPB said it would file a court application to have the following funds wound up: the Astarra Strategic Fund, Asttar Portfolio Services (formerly Astarra Diversified No 4 Pool), Astarra Overseas Equities Pool, Asttar Wholesale Portfolio Service (formerly Astarra Property Pool), ARP Growth Fund, and the Regional Land Property Fund.
PPB partner Mark Robinson said he disagreed with recent concerns raised by the Association of Independently Owned Financial Planners (AIOFP) that a wind-up risked devaluing the assets in some of Trio Capital’s funds.
“I disagree for the reason that a wind-up still allows for selling the assets in an orderly fashion,” Robinson said.
AIOFP chief executive Peter Johnston said he disagreed with PPB’s strategy and that the AIOFP intended to voice its opinion on the matter.
“Because these assets of hedge funds are off-market assets … if there’s a fire sale, in other words if the administrator wants to get in there and just wants to wind it up in a bloody-minded sense, you’re going to find they run the risk of devaluing the assets,” Johnston said.
“We just disagree with their strategy. So we intend on voicing our opinions on this because they don’t have any experience in dealing with hedge funds at all.
“We’re going to put some suggestions forward on how they should do it.”
Robinson said Johnston would be entitled to be heard if he wanted to during the wind-up application.
He confirmed that PPB was still unable to establish the existence or value of the Astarra Strategic Fund’s foreign assets.
“We haven’t seen any evidence of the underlying assets in those offshore funds, notwithstanding that we have asked Mr Johnston to provide it to us,” he said.
“All I can confirm is amounts of cash are retained by the custodian [National Australia Trustees], which is in the order of approximately $2 million.”
Johnston earlier this month said the AIOFP had verbal confirmation from the Explorer Fund, a fund the Astarra Strategic Fund had invested in, that it held $75 million of the Astarra Strategic Fund’s money safely.
In a recent e-mail obtained by InvestorDaily, Johnston said ASIC was presented with hard evidence of the Exploration Astarra assets, which had been confirmed directly with the company’s registers and audited.
“Other assets in the SBS Fund have also been discovered. This now puts the total at over $90 million with two funds to be confirmed,” he said.
ASIC said it did not comment when an investigation was underway, a spokesperson for the regulator said.
