Author: Michael West

Watchdog silent on court order against Trio funds

THE AUSTRALIAN Securities and Investments Commission has not been able to make any public disclosure about its legal case against two of the most successful investment managers in the Australian market, despite filing charges against them last week and following up yesterday with an urgent interim stop order. The order forced Trio Capital – until recently known as Astarra Capital – to remove product disclosure statements for its Astarra Managed Funds, with a combined $1 billion under management, from its website. The Astarra funds, some of which are rated as five-star by Morningstar and are actively marketed to financial planners, had been among the top-performing funds during the depths of the financial crisis at the end of last year. The Alpha Strategic Fund delivered 11.67 per cent over three years to last November while most funds struggled to break even. The product disclosure statements were removed a week after ASIC separately filed charges against two of the former investment managers of Astarra’s funds, Shawn Richard and Eugene Liu, in the equities division of the NSW Supreme Court. ASIC has made no public disclosure about that case under the direction of the judge. Mr Richard, 34, originally from Canada, and Mr Liu, 32, originally from the US, were the founders of the Sydney fund Astarra Strategic – until recently called the Alpha Strategic Fund – a $118 million hedge fund-of-funds...

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ASIC puts urgent stop order on funds

THE AUSTRALIAN Securities and Investments Commission yesterday issued an urgent interim stop order forcing Trio Capital – until recently known as Astarra Capital – to remove the product disclosure statements for its Astarra Managed Funds from its website. Astarra Managed Funds has a combined $1 billion under management. The order follows charges filed last week by the regulator against Astarra managers Shawn Richard and Eugene Liu. ASIC has made no public disclosure about that case – including the fact that it was filed – under the direction of a NSW Supreme Court judge. The Astarra funds, some of which are rated as five-star by Morningstar and are actively marketed to financial planners, was among the top-performing funds during the depths of the financial crisis at the end of last year. The Alpha Strategic Fund delivered 11.67 per cent over three years to November 2008, a period when most funds struggled to break even. Mr Richard, 34, originally from Canada and Mr Liu, 32, originally from the US, were the founders of the Sydney-based Astarra Strategic Fund – until recently called the Alpha Strategic Fund – a $118 million hedge fund that operated under a structure that held its assets through an entity in the British Virgin Islands. Its size had tripled in the year to June 30. Austrac (the Government’s Transaction Reports and Analysis Centre) had granted the investment...

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Grinning all the way to the bank – until watchdog started sniffing

IT WAS a case of the little fund that could. During the height of the global financial crisis, as cashed-up investors were reeling in a world of financial pain, the Astarra Strategic Fund somehow managed to buck the trend and keep clients’ returns rolling in. A Canadian baseball freak, Shawn Richard, 34, the gun investment manager for Astarra, was hot property. He and his New Jersey-born partner, Eugene Liu, 32, came through the downturn unscathed, ending up with $1 billion of funds under management. But the dream run may be coming to an end. The corporate regulator has opened an investigation into several funds – including Astarra Strategic, one of the best-performing hedge funds in the Australian market – following a clampdown on similar funds by US regulators in the wake of billion-dollar fund collapses and the $US50 billion Ponzi scheme run by Bernie Madoff. The investigation into Astarra Managed Funds, the parent of Astarra Strategic Fund, by the Australian Securities & Investments Commission comes as the corporate regulator examines ”red flag” issues such as non-standard business models and the use of in-house registries among some of the industry’s smaller funds management operations. ASIC yesterday issued an urgent interim order forcing Astarra Managed Funds – an Albury-based group with more than $1 billion under management – to remove its product disclosure statements from its website immediately. The products under...

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Myer float is far from a bargain, but market cannot let it fail

Unless you were six foot under in a box, you would have heard a bit about the looming Myer float of late. The team mascot Jennifer Hawkins was at it again this week urging mums and dads in Melbourne to read the prospectus (that’s the fat bit in front of the application form) before they participated in this iconic investment opportunity. One wonders whether Our Jen is availed of an Australian Financial Services licence, something the non-supermodel fraternity is required to hold before dispensing advice on investment products. The marketing extravaganza is designed to bring as many retail investors as possible onto the Myer share register to ”squeeze” the institutions. The private equity promoters from TPG and Blum are hoping the instos will be left ”short”, with as little as 25 per cent of the stock after the float, and then be forced to buy in the aftermarket to achieve index weight. Besides the ”index play”, there’s another reason for the hullabaloo over Myer. A slather of floats is backed up in the capital markets pipeline. Virtually every new and used share salesman in town has a gig in the Myer sale. That takes the critics out, and it generates a lot of will to succeed. If this float is a dud there are serious pricing ramifications for the likes of Ascendia (the $700 million to $900 million relisting...

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Myer test case for market

UNLESS you were six foot under in a box you would have heard a bit about the looming Myer float. Team mascot Jennifer Hawkins was at it again this week urging mums and dads in Melbourne to read the prospectus (that’s the fat bit in front of the application form) before they participated in this ”iconic” investment opportunity. One wonders whether Our Jen is availed of an Australian Financial Services licence, something the non-supermodel fraternity is required to hold before dispensing advice on investment products. The marketing extravaganza is designed to bring as many retail investors as possible on to the Myer share register to ”squeeze” the institutions. The private equity promoters from TPG and Blum are hoping the instos will be left ”short”, with as little as 25 per cent of the stock after the float, and then be forced to buy in the aftermarket to achieve index weight. There’s another reason for the hullabaloo over Myer. A slather of floats is backed up in the capital markets pipeline. Virtually every new-and-used share-salesman has a gig in the Myer sale. It takes the critics out and generates will to succeed. If this float is a dud there are serious pricing ramifications for the likes of Ascendia (the $700 million to $900 million relisting of the old Rebel Sport), Kathmandu, Link Market Services and a host of others. The...

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New Michael West Podcast

Created by PodcastOne, this 3 part series looks into how Australia has gone from one of the cheapest countries in the world for energy to one of the most expensive, and reveals just what has happened with our gas and electricity supply and why we are on the verge of an energy crisis.

Listen to THE ENERGY TRUTH on the PodcastOne website

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