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North Cyprus News | LM Investment Management in Administration

Thursday, March 21, 2013
- by Dominic Freeman

1x1.trans North Cyprus News | LM Investment Management in AdministrationNorth Cyprus News | LM Investment Management in Administration

Back in 2009 a lot of questions were being asked on Cyprus44 about north Cyprus based AstuteFMA’s involvement with Peter Drake’s LM Investment Management (LMIM); currently in administration. The failed LMIM was only one of company AstuteFMA dealt with and is mentioned in this document released by them – ‘Astute Angle’.

LM Investment Management were offering unbelievable rates of interest and many of the Cyp44 readers were sceptical about this. In the end a slanging match ensued which ended with the mention of litigation when AstuteFMA were linked with a scam. According to the newspaper article When Drake’s Empire Came Crumbling Down this inadvertently turned out to be true. I must make it clear that because a company, in innocence, advises a particular investment when there is no evidence of misdeed that does not automatically link them with subsequent events, even though this may reflect on the quality of their advice.

Anyway, getting back to LMIM. It seems that the large returns promoted were to come from lending investors money to developers in Australia. Unfortunately, according to the article mentioned above, the company

“…was enticing financial advisers with three years of commissions upfront. If they placed $1 million of their clients’ savings with LM Investment Management funds, they would get $100,000 cash.”

This meant that the first 10% of an investor’s money went to financial advisers, according to the article’s writer.

Another problem was that investors were allegedly being told that the money was invested in Australian property, a good investment if it had been true, however

“…it was never property that his clients were really buying. As the global financial crisis loomed, they were buying loans to property developers – often associates of Drake and even Drake’s own companies… peoples’ savings came in – mostly from financial advisors –  and they went out in loans to developers, after the manager LM had taken its clip. And a mighty clip it was too, tens of millions every year in assorted fees, all up.”

Read When Drakes Empire Came Crumbling Down for the full story. The allegations made by The Sydney Morning Herald should make any LMIM investor shake in their boots. Hopefully some of their investment should be returned, remember the company is in administration not bankrupt. Going back to the original Cyp44 discussion which was curtailed because of threats of litigation when the discussion wrongly linked AstuteFMA with another scam, it should have been clear that 19.6% returns on an investment belongs to a category ‘if it smells like a duck, quacks like a duck, looks like a duck, and walks like a duck.’ Of course, I’m being polite here and don’t really mean duck at all.

 

1x1.trans North Cyprus News | LM Investment Management in Administration
1x1.trans North Cyprus News | LM Investment Management in Administration

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16 Responses to “North Cyprus News | LM Investment Management in Administration”

  1. Polly Marples

    Well quack bloody quack.

    #81024
  2. Polly Marples

    Joined: 19/04/2008
    Posts: 1139

    Message Posted:
    04/03/2011 19:45

    Join or Login to Reply

    Message 44 of 44 in Discussion

    FROM C44

    This thread is now closed.

    Follow the link to the other thread. This thread is too full of uninformed conjecture and scaremongering

    Scaremongering, yes but justified as it turns out.

    #81025
  3. Wallet and Gromit

    http://www.international-adviser.com/ia/media/Media/LM-Investment-Management-statement.pdf

    Around 10% commission of initial investment paid to financial advisers.

    #81033
  4. dohhhhhhhhhhhhh

    Buried Comment (Reason: misinformation)   Show

    LM have a strict commission policy across all their funds – the Maximum LM pays direct investors for investments in the MPF fund is 3% upfront.
    This is paid by LM to Advisors and not taken off the clients investment.

    I can categorically say that 10% of investors money never went to FMA, and that investors received full capital investment allocation as per contract notes.
    I think people should stop writing inaccuracies and endeavor to get to the truth.

    Please note that Pauline Ann Read has not been in contact with LM to confirm her story.

    Again another example of wreckless behaviour on the internet unfortunatley.

    #81043
  5. Malcolm Channing

    doh… has been placed in an access by link category for several reasons.

    1 – Pauline Read did not write the article
    2 – the 10% commission rate statement was from The Sydney Morning Herald
    3 – There was no mention of any level of commission going to FMA only a reference to the newspaper in -2
    4 – there was no talk of any of this being the truth, only that this was what was being reported elsewhere from reputable sources
    5 – doh… has not been verified as a reputable source
    6 – Pauline Read does not need to contact LM as she didn’t write the article
    7 – Dominic quoted his source – The Sydney Morning Herald and will print a retraction when that source does the same
    8 – the article made it clear that AstuteFMA merely advised an investment in LMIM and the level of commission they received was thought to be irrelevant. LMIM’s investment plan’s weakness was that it offered 10% commission to those collecting £1m of deposits. I imagine there were bands of commission and if this is true, and I’m not saying it is, then I imagine FMA only reached the band paying out 3% commission. I also imagine, because I would try to do it, that they tried to reach the top band.

    #81045
  6. Polly Marples

    dohhhhhhhh (more h’s probably) got that wrong didnt you cobbler.

    I am sure an apology is in order but will never be received. Pauline will definitely cry herself to sleep tonight. booo hooo

    #81046
  7. Polly Marples

    dohhhhhhhhhhhhhhhhhhhhhhhhhh

    LMFAO @ you

    #81047
  8. Polly Marples

    “LM Australian Fund Manager in Administration

    I am assuming that there are a number of us in the TRNC that have invested one of the LM funds.
    These were being heavily promoted by Astute FMA and the attractions were the high interest rates offered on TL deposits.
    The Managed Performance Fund was I suspect the most popular fund, offering high monthly interest income.
    Now the management company for the funds has called in voluntary administrators
    on itself, I suspect to buy time.
    It should be noted that the funds are ring fenced and their finances cannot be touched.

    However the Managed Performance Fund in particular was in trouble for the past 18 months and was always a riskier investment than portrayed”

    ………………………….

    This appeared on another forum. The questions has to be, how long has there been a question mark about this company? Did the broker/financial adviser know about this and continue to recommend it? Ring Fencing the fund is not the same as ring fencing the capital, so how much is in the fund now? Questions anyone unfortunate enough to have invested should be asking.

    #81048
  9. Polly Marples

    Nigel is on the case so nothing to worry about.

    RE: IS this bad news for ex pats in north Cyprus who have invested in this fund?
    Fma / LM investments SOME fACTS

    One of the forum members was able to find an investors hotline to the Australian Administrators of LM.

    They called them and was assured that the funds were safe and dividends would be maintained.

    This proved a great relief to many I am sure.

    As you may well imagine FMA are receiving numerous questions from LM Clients so we just wanted to provide you with a list of the questions we have been asked so far as well as the answers we have provided.

    If you have further questions then by all means send them to FMA and they will keep this updated regularly to help you understand the latest.

    Frequently Asked Questions About The Current LM Situation

    Q1: How does this affect me?

    A1: Your Capital and Interest are currently secure and the funds are still operating and functioning along with the T&C’s of the funds, therefore your interest will continue to accrue on your investment account.

    Annual income investors are not currently affected at this moment in time. The investors who are immediately affected are those who receive monthly income from their investments as the fund is closed for analysis. If the Administrator decides that LM cannot be restructured and turned around then a new manager will be appointed to take over the running of the funds.

    Q2: I would like to withdraw my investments with LM and place them elsewhere.

    A2: Unfortunately the funds are currently closed which means no payments are being paid out, and no new monies can go in until the fund re-opens. Usually once a fund re-opens, there will be redemption restrictions put in place in order to safeguard all investor interests.

    However what is important to remember is that LM are just the Fund Managers, they don’t own the assets of the funds, and the fund assets are completely seperate from LM and held in Trust with The Trust Company (PTAL) Limited – one of Australia’s oldest and largest trust companies.

    The funds are still operating and functioning along with the T&C’s of the funds – therefore your investment is still growing.

    Q3: Should I believe what I am reading about LM all over the Internet and on local Internet forums?

    A3: Unfortunately there is a lot of mis-information out there about LM and we believe that a rival Fund Manager maybe circulating a lot of the mis-information in order to scaremonger investors in an attempt at a hostile takeover of LM’s Business.

    LM is regulated by the Australian Securities & Investment Commission as a Responsible Entity – if they were not a Responsible Entity their license would be revoked and LM would be investigated. This is not the case and LM has not breached any regulations and complies with Australian Companies Act. All LM’s Funds are held in Trust and Ring-Fenced from LM Investment Management. LM Investment Management has been established as a Responsible Entity since 2001.

    FMA as company have always found LMIM to be extremely professional and we have had no grounds to think that they were mis-managing the funds in any way and mis-leading investors and advisors.

    As your advisor we will keep you up to date with the real developments/updates which will be provided to us by the Administrator.

    Q4: Who is the Trust Company?

    A4: The Trust company is The Trust Company PTAL (Permanent Trustee Australia Limited). Please see the link below, the Trust Company was established in 1885 and headquarters are in Sydney Australia. They are one of Australia’s oldest Trusts.

    http://thetrustcompany.com.au/about-us/our-company/” onclick=”window.open(this.href);return false;

    Please click on the link to their Australian Securities & Investment Commissions page:

    http://www.search.asic.gov.au/cgibin/gn … 9&hdtext=A” onclick=”window.open(this.href);return false;

    The Trust Company currently holds around $164 Billion under trust and is one of the oldest and largest trust companies in Australia. They are not only registered in Australia, but also in New Zealand and Singapore, so they are well established & respected Trust Companies in the Asia & South Pacific region.

    Q5: What does Ring-Fenced mean?

    A5: All LMIM funds are separate and ring-fenced from LMIM and from each other fund. All funds are held separately and protected in Trust. Therefore each fund is separate from LMIM and LMIM Creditors.

    Q6: When will we hear something from the Administrator?

    A6: The Administrator has already contacted us, to confirm that LM is still trading and that they are currently assessing LM’s business. We are expecting an update for investors very soon and of course as your Advisor we will Endeavour to keep you informed with the correct information and developments.

    Q7: Is it true that no monthly payments have been made for the last 2 months?

    A7: No this is not true – monthly income payments have been paid each month up until March 2013. FMA were informed of an income delay by LM on the 6th March 2013. Up until the 6th of March 2013, all income payments were met. FMA were informed by LM of the voluntary appointment of FTI Consulting on Tuesday 19th March 2013.

    Q8: Is it true Investors here have not been able to get their funds back for around 5 months?

    A8: With regards to redemptions payments, LM was managing a delay to payments as they currently had around 5% of the funds value in redemption requests, which is in line with their Terms & Conditions that they can delay repayment if it is in the best interest of the fund and investors – our clients have been paid redemptions generally 30-45 days from their maturity date.

    #81051
  10. Polly Marples

    I neither agree or disagree with this, just bringing it to the attemtopm of those who read this:

    at http://www.smh.com.au/business/the-scarlet-pimpernel-of-funds-management-20120517-1ysnv.html

    This is the comment of the press in Ausralia

    #81054

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