Here's an article published in New Zealand by Fairfax News.
Readers might not be fully aware of just how biased Fairfax media can be, but, believe me, they can be very biased.
Isn't it just wonderful how Fairfax is just so supportive of Trilogy Funds Management Limited? Michael West certainly stuck the boot into Peter Drake down at LM, but Faixfax isn't playing the game fairly at all – it's starting to look to me that Fairfax has picked a side.
A number of members of the PFMF have sent information to Fairfax about Trilogy, information that Fairfax has chosen to sit on while allowing Trilogy to range free without negative information being reported by Fairfax.
For example, Fairfax is aware of Trilogy's activities in the following funds:-
1. Trilogy Healthcare REIT
2. Trilogy Pacific First Mortgage Fund
3. Trilogy Principal Mortgages Mezzanine Mortgage Finance Fund
Fairfax is aware of the massive (more than 50% loss) suffered by the fund in 2012, but says nothing.
Fairfax is aware of the losses suffered by the Trilogy PMMMF fund and the associations Trilogy had with various Laton entities, but says nothing.
Fairfax is aware of the losses suffered by the Trilogy Healthcare REIT and the fact that Trilogy receipted investments at $1.00 per unit when the current values were $0.63 (2009) and $0.60 (2010) respectively, says nothing.
But Fairfax says NOTHING and pretends to be an impartial news reporter, which is my view is far from the case – in fact, as far as I'm concerned, Fairfax is pathetic.
Same goes for Trilogy's management of the PFMF – when Phil Sullivan (ex-CEO of Citypac) is able to be bashed, Fairfax is in there boots-and-all – even to the extent they can bash Sullivan as one would a pinata – but they got one hell of surprise when Sullivan sued – and for one, I hope Sullivan wins – good luck to him for suing Fairfax.
Here's part of the article, “The unit price has fallen from A$1 to A73c, and 89 per cent of loans are now in arrears or default.”
But good ol' Fairfax doesn't report Trilogy current woes in its Healthcare REIT and Pacific First Mortgage Funds, even though LM's losses are substantially losses than those suffered in Trilogy's own funds! All this knowledge is within Fairfax but true to its reporting of matters related to the PFMF, Fairfax only has one entity with a “black hat”, and in this case, it's LM.
And, “In a pitch to investors, Trilogy said it would cast daylight on the inner workings of the fund by conducting an asset review, improving transparency and looking into potential legal action if any wrong-doing is uncovered.”
Yes, Trilogy said that to members of the PFMF too – and after three years, and after spruiks that IMF would fund litigation, Trilogy sued five ex-Citypac directors – had to discontinue against one after they found out he'd been dead for two years prior to the lodgement date of the claim!
Now, if it's insurance they're after (after all, those guys wouldn't have $60m), then one director less would drop the claim to $48m, and if it's true that there's no insurance (as alleged by Phil Sullivan that there's no insurance because an essential policy element wasn't maintained by Trilogy), then there's nothing to pursue.
That's probably the reason IMF declined to support the fund in its claim as mounted by Trilogy – even though IMF expended $$$ in backing the public examinations of the ex-directors of Citypac, various CBA folk, and others!
And, "It will also reduce fees to 1.5 per cent for the main fund, and ultimately nil for the feeder funds.” - interesting, a drop to 1.5% but it won't run the feeder funds for nothing on the way to taking over the main fund – now, there's an impost for the feeder funds – nothing is free is Trilogy. If Trilogy wins the feeder funds but fails to win the LM FMIF, then investors in the feeders won't be happy little Vegemites at all, will they?
“Trilogy Group chairman Rodger Bacon said the proposal to finally return cash to unitholders was straightforward. "What we suggest is an orderly wind-down, but no fire sale, of the main fund's assets, and then capital distributions to investors in the main fund and through it to the two feeder funds."”
Ah, just what they said to members of the PFMF:
Even the old crap about no fire sales:
and, “A similar move in 2009 saw Trilogy take over the City Pacific First Mortgage Fund, which ultimately led to it filing a class action claim for A$60 million of damages against City Pacific directors and officers.”
Now, if you've got your wits about you, what you'll note is that there's a number of items missing from this excerpt, and they are:-
1. No mention that Trilogy said that IMF would back the litigation
2. No mention that after funding the public examinations, IMF will NOT back the litigation
http://www.imf.com.au/cases.asp?ID=110 (note, no mention of the current litigation – plus, IMF has confirmed with a fund member that they are not backing the current litigation)
3. No mention of suing the dead man and the subsequent discontinuance
4. No mention that the discontinuance might reduce the claim
5. No mention that there might not be any insurance anyway (IMF will not support, and Sullivan's allegations) : http://www.moneymagik.com/
6. No mention about the ex-Citypac directors cross claim alleging the fund is liable for their legal costs: https://www.comcourts.gov.au/file/Fe...4/2012/actions
and here comes Fairfax at its best, “LM is an Australian multi-billion dollar fund management group owned and operated by mysterious Kiwi expat Peter Drake, who has been dubbed "The Scarlet Pimpernel" for his elusive behaviour.” - still, even at its worst, the comment relates to Mr. Drake personally, while Philip Ashley Ryan and Rodger Bacon escape without criticism.
Now a word about Ryan's breach of trust – such breach of trust of less importance to Fairfax than reporting about Drake's “elusive behaviour”!
“Structured credit expert David Jansen, who is acting as an independent consultant to Trilogy, said the takeover bid was an opportunity to scrutinise LM's transactions.” - as far as I'm concerned, here's an expert that shouldn't be listened to – not a word about the Trilogy fund mentioned about, and not a word about Philip Ashley Ryan from Trilogy Funds Management.
And, “”You do get to look up the skirt and see what's going on, and look at everything from an arms-length, commercial basis," he said. "That's particularly relevant if there's related party lending going on in the fund."” - what an inane statement, “look up the skirt” - and Fairfax thought the quote useful for fund members – in my opinion, a tad course.
And what percentage of the total loans made by the fund are the related party loans? Not worth changing manager for – and I might be wrong, but the related party loans are not in default. (I'll stand corrected if I'm wrong on this).
This is a statement I'm somewhat concerned about, “"They [large advisory networks] have taken a close look at it, and had some concerns with LM's performance," said Jansen. "It's fair to say we've been working with them as well, constructively."” - I'm concerned that the “[large advisory networks]” haven't seem to have taken a good look at Trilogy and its performance in the abovementioned funds!
“Smaller advisers have received information about the proposal overnight, which Jansen expected to follow up with discussions soon.” - let's hope the discussions are critical in nature, but I suspect they won't be.
Finally, “ © Fairfax NZ News” - yep, good ol' one-eyed and biased Fairfax media.