I would like to contact fellow investors in the LM First Mortgage Income Fund (FMIF), to arrange a forum for us to discuss the proposal by LM to change the Constitution of that Fund.
There is presently no ability for investors to discuss the proposal amongst themselves, and develop other recommendations/proposals to be put to a members vote as is their right under the Fund Constitution. I have tried to make constructive suggestions about how LM can facilitate such a process but is seems none will be adopted by LM. Given this, and LM's refusal to provide me with a copy of the members' register, I can only conclude LM seeks to discourage direct investor interaction in order to restrict investors' focus to only those matters promoted by LM.
While on the surface LM's proposal appears to be simple, it seems to me the implications of the proposed changes to the Constitution are profound and will likely have significant impact on the value of my investment.
While there may be benefits to LM, in my view LM has failed to provide sufficent information to demonstrate that its proposal is in my best interests as an investor eg. where is the information about other options that were identified and analyzed, and why are they not preferred?; Where is the financial modelling of all options?; Has the bank financing facility been secured and do the terms and timeframes place any limitation on investors' position? etcetcetc
In the absence of such, I have concluded there is insufficient information for me to make a informed decision on the LM recommendation being put to members' vote. I see this as being unsatisfactory, as it seems investors will be pretty well locked into the LM process if the vote is passed, and I will have to blindly gamble on what may give me the "least worse" outcome.
In my view, the vote scheduled for 16 May should therefore be postponed until sufficient information is available.
If there are other like-minded investors in the LM FMIF, I suggest we urgently act to:
* discuss LM's performance to date, including whether LM should be removed and replaced as the 'responsible entity'
* discuss the changes to FMIF Constitution proposed by LM, so that we can all be better informed (I see this as especially important given my understanding a significant proportion of investors are elderly and may rely on the opinion of the advisors who introduced them to LM and whose independence may be questionable if there are trailing commissions)
* identify any information deficiencies, and request such information be provided prior to the vote
* discuss the need for LM to hold Investors Forums - also prior to the vote - to provide members with the opportunity to discuss and question LM on its recommendations
* identify alternative options to be put to those Investors Forums and/or to a vote by investors
Fellow LM FMIF investors please provide urgent feedback on these thoughts.