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Equititrust?

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Re: EquitiTrust


Hi Olman,

yes, it's true that a return will only occur in the event of a profit - that's how the fund is swept free of excess cash, rather than leave the money in the fund to offset future losses. I guess the bonus of any annual profit could have went to either investors or the manager, but since it's the manager's game, the manager took the bonus.

I'm not quite sure what you mean by 'these funds' being applied to impaired loans. Certainly any impairment would reduce profit and there reduce the size of any return to the manager from the capital warranty, but there is no 'application' of the manager's units to offset impairments to date under the present PDS. You might be kind enough to point out these offsets.

Again, I'm not sure what you mean by "there are no compensatory arrangements or fees payable .. for this facility .. they do not regain the funds foregone." because there are no funds foregone to date under the present PDS. Again, if I'm wrong, please be kind enough to point out the fees foregone.

Yes, Equititrust Limited could have taken the surplus subordinated investment over and above the minimum $20m as set out in the PDS, but it's clear that would be a silly move while the fund is turning a profit and offering up a return of near 40%, however, when profit disappears, it seems it would be a good move to extract (as they are able to, as any other secure lender to the fund) as much as possible.

That's where this so-called 'security' has been a real boom to Equititrust Limited at investors' expense. I guess most investors thought the subordinated investment was really a security, but if they'd thought about it a little bit, they would have seen it's no more than a mechanism which allows the fund to be swept of profit while only leaving a relatively small security of up to $20m (zero if the manager is replaced for any reason).

This so-called security has allowed the manager to invest in the fund in order to glean extraordinary profits while offering not much at all in the way of security for members.
 
Re: EquitiTrust:OLMAN

I dont think it matters if OLMAN is tied closely with EQUITITRUST or not - from the depth of inside knowledge he (or she) has - we all assume that to be the case - what is good though, is we do seem to be getting some detail, at long last.

A quck one for OLMAN - does Dudley QUINLIVIN or any entity associated with him owe any of theFUNDS circa $50Million?

zencorp said:
I must admit you do seem to know a lot about Equititrust. The EPIF is only available for Wholesale investors... yes? is that fund frozen as well...
Click to expand...
 
Re: EquitiTrust


The ability of the fund manager to "sweep up the excess cash" is a consequence of the business model as outlined in the PDS. When I became aware of this, I drew the same conclusions you have (ie, Equititrust was skimming the profits while the fund was frozen) , and posted my concerns which can be found in the beginnings of this thread.

Eventually I spoke directly to Equititrust about this, and they pointed out that for the three years prior the RSI had been applied to impairments and admin costs as previously outlined. The nitty gritty details do not appear in the EIF PDS, but were reflected in Equititrust Ltd Annual Reports. This appeared to be because of the seperate administration and reporting structures of the EQT identitities. Reporting at the time was pretty scratchy, and has improved dramatically over the past 6-12 months.

The ability to take the excess profits is clearly stated in the PDS. Investors put money into EQT for the benchmark rate of return, and the manager's profits were not the investors' issue. If they were an issue to an investor, they had the choice not to invest. We were in it for the stated return. I don't think anybody expected any windfalls as a result of their investments.

The funds foregone were the RSI returns that were legally available to EQT - some $40m over the three years specified. $30m was applied to impairments, and $10m went on admin costs. Being naturally suspicious and cynical like you, I asked EQT about this, figuring they would probably charge these amounts foregone as some sort of debt due to them at a later date. There response was "there are no compensatory arrangements or fees payable .. for this facility .. they do not regain the funds foregone."

The subordinated investment is currently $40m. This can be reduced to $20m subject to conditions you allude to and outlined in the PDS. The RSI is compensation for the risks associated with the subordinated investment. If there is any capital loss, the subordinated investment is diminished all the way to zero before any investor loses capital. The RSI is a lucrative return for EQT when all goes well, but as recent history shows, EQT take the first hit in the event of impairments.

When these facts are considered, Equititrust appears to be acting honourably, in my book. The constant calls in this thread for them to explain away every possible contingency of existence are beyond reason. If the posters throwing in these distractions are so smart, why are they not running their own empires - how do they find the time to dream up such scenarios?

cheers!
 
Re: EquitiTrust:OLMAN


Never one to lose an opportunity to insinuate, Kostag continues to fling manure.

The "depth" of my "inside knowledge" comes from reading the publications on the Equititrust web site and actually speaking with management, which is a logical process for any genuine investor.

I don't see any need to check out any of your querulous statements or questions with them. I thought you had all the answers? What's the matter with your well respected and trusted advisor? Falling down on the job, is he?

"We all assume..." - yeah, you sure do. You and all your mates.
 
Re: EquitiTrust

OLMAN, and you were going so well.

Every line and bit of witty reparte you pull out of your arsenal of cynicism, ruins what was othewise illuminating.

However you do lose the point that others are making, in reality losses do get hacked out of retained earnings of any entity - no big deal - in Equititrust's case by accelerating the rate of its return (circa 40% per annum!) , is Equititrust simply getting its money out in another form?

Olman, you seem to be able to get so much detailed information out of EQUITITRUST who simply wont tell anybody else - can you do us all a favour and clear these lingering questions.

Q1: QUINLIVIN: yes/no - owes Equititrust circa $50M?



 
Re: Equititrust: INVESTOR INTERESTS? FIRST, LAST OR ........ ? YOU ASK THESE QUESTION

the EQUITITRUST website published this comment:-

"We are particularly distressed at the insinuations that we have put our interests ahead of investors. I can assure each and every investor that this is not the case. Every decision we make puts the interests of investors first."

This comment gave rise to the following questions. If FAIRFAX MEDIA was not correct in theri assessment, then the answers to these questions would deal with any inaccuracies:-

Q1: Why did Equititrust borrow and therein grant FIRST RANKING security (ahead of our interests, ie: investors) to National Bank, Commonwealth Bank and Bank of Scotland, over $150MILLION pushing all investors into second ranking security, at one stage behind a mountain of debt exceeding $150Million, and , as at today, still some $50Million in default loans to Banks?

Q2: Acceptiing that 'gearing' the loan book and allowing it to grow and make more interest margin and fees etc for Equititrust,was a profitable move for McIvor, how was such a policy in any way in the interests of investors, who simply stood to get the same agreed interest on their investments, such investments were meant to be secured against prime mortagge securities, over which 'we' held first mortgage?

Q3: When the Banks asked for their money back (which despite Equititrust rants, they were entitled to do), why did Equititrust de-nude cash reserves by fully paying out the Commonwealth Bank and substantially paying down the National Bank? How did this policy help investors or put their interests first and foremost? I accept that it ensured the survival of Equititrust for the benefit of Equititrust shareholders and managament, yet how did it assist investors interests?

Q4: We hear much about Equititrust's sub-ordination investment of $40million and how we should draw some obscure comfort from it. ( I say obscure because it hasn't helped many of us get paid back after 2 years) Did McIvor or Equititrust ever actually invest by way of advancing and investing $40Million of real money? I mean 'real money' in the same way as investors advanced their real money, or was the investment some paper 'journal entry' accounting, in the same vein as Allco, MFS.

Q5: Equititrust pays itself a very high interest rate (I recall something in the order of 24% (3 times what we get) ) on its own 'investment' (assuming that as per Q4: it is an actual investment) and a very large amount (I dont recall the exact amount) of managment fees. I think a total of about $15Million a year. With in excess of $40Million of investors having to plead hardship to get some repayment of their own capital (and still not getting it!), how does the payment of $15million from one's left hand to one's right hand, when investors are 'begging' for their money to be paid back, possibly align with McIvor's comment :- our interests ahead of investors. I can assure each and every investor that this is not the case. Every decision we make puts the interests of investors first.

Q6: How did the recent PDS (banned by ASIC and had to be withdrawn) which sought to raise $50Million of new money (when there is over $40M of old investors that can't be paid back right now , for last 2 years) , which as we now all understand was to repay the National Bank, and plonk some new (presumably higher rate lender) into first ranking security position ahead of all existing and legitimate investors, possibly benefit existing investors and align with McIvor comment about investor's interests being considered first and foremost.
 
Re: EquitiTrust:OLMAN: MANURE ? I think an INCONVIENIENT TRUTH

More diversion from the SPINMEISTERS OF CHEVRON.

Perhaps you might do me a favour - in regards to the QUESTIONS that you deem not worthy of comment - perhaps you can steer us all to what part of the out of date PDS material deals with any of the issues.

Bluster and bravado and manure slinging wont make these issues go away.....

By the way, I am not insinuating anything. I am simply asking legitmate questions. Equititrusts (and your) continual denial of these issues (and refusal to answer) speaks volumes to all legitmate and concerned investors....

Q1: Is the QUINLIVIN group a $50Million borrower as one of the posters suggested a few days ago. If he is and if you are a legitimate investor, I dare say the prospect of 20% of your money 'floating' in Ipswich controlled by Quinlivin group may give you cause for heart murmur.





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Equititrust Loans To Quinlivan

It does appear that loans may have been made to Dudley Quinlivan and his companies..

If this is the case then Equititrust needs to explain why these loans were made to an individual who's past history has been known for well over 10 years.

The Gold Coast White Shoe Brigade continues down its spivy path again and again..
 
Re: EquitiTrust


As previously declared, I don't have a horse in this race, but I must say that I'm surprised by your comments about the detail being in the fund reports (which don't seem to be available online).

A transaction appears in the annual report for 2009 (which was swept clean to the tune of in excess of $9m) page 4 (in part):-
http://www.equititrust.com.au/Pdfs/EIF_Fin_statement_Jun_30_09.pdf

"... 4. Net assets attributable to investors - liability
... 30 June 2009
Ordinary investments 277,510,458 13,193,674 (42,136,143) (42,083,486) 248,620,646
Subordinated investments - 40,300,000 42,136,143 (42,403,370) 40,032,773
Total 277,510,458 53,493,674 - (84,486,856) 246,517,276 ..."

The transaction is the transfer of $42,136,143 from ordinary investments into $42,136,143 as a subordinated investment.

It'd be interesting to see whether this transfer happened before or after the fund was frozen. I wouldn't have thought it would be permitted to happen if the fund was frozen.

I wonder why the 42 million wasn't simply redeemed - because if the fund was frozen, then the redemption wouldn't be permitted, unless of course, it was deemed to be a subordinated investment.

I mean, if the manager had 42 million units as an ordinary investment and the fund was frozen, then those 42 millions would be frozen and unavailable for redemption except when offers/payments are made.

If on the other hand, the units are subordinate units, then the units are redeemable in that same frozen fund.

Great isn't it? The manager has converted ordinary units into redeemable subordinate units for redemption rather than redeeming them directly -- food for thought? If you really want to think about it.

Certainly in the 2008/2009 year there were no impairment plugs. In any event, any short term plugs on impairments (keeping in mind, impairments are not actual losses) would be offset by profits in any event.

i'll leave for members to be concerned about what happens to the subordinate units, but I'll bet that the most that will lay at risk will be no more than $20m.

The manager always has the inside scoop - the manager will know when there's trouble on the horizon - members only find out these things months and months later.

That little $42m two-step between ordinary investments and subordinate investments is really something I'd be giving some thought to if I was an investor in the fund. As they say, "Timing is everything".

I guess investors never really thought they'd get a bargain, but I'd guess they never thought they'd make a loss either.
 
Re: EquitiTrust


I have inadvertently misled you. The accounting for the application of the RSI to impairments was in the Equititrust Ltd Financial Reports, which are not publicly available, but which were made available for my perusal after enquiring into the issue.

The subordinated investment of $40m in the EIF is subordinated to the rights of ordinary investors, and can be reduced to $20m "provided it has the approval of the finance credit line providers". Currently the value of the fund has to erode by $40m before any investor is affected. The current value of the fund is the key issue. I understand that Equititrust will be mailing an update on the loan portfolio and valuations to investors within the next few days. There will be more to discuss when the information is available.

The fact remains that no investor has made a capital loss to date. Interest is still being paid. While there are no guarantees into the future, I'm inclined to wait for the update before jumping to conclusions.
 
Re: EquitiTrust


Thanks Olman,

Yes, it seems you did. Accounting within Equititrust Ltd. has nothing to do with the fund.

Still, $42m was redeemed as a subordinate investment in 2008-2009, such investment starting life in that same reporting period as an ordinary investment. It's worthwhile noting that the manager's subordinate investment redemption of $42m equalled the whole of the ordinary investment redemption for the fund in 2008-2009.

While impairments have been small, they have risen from $1.123m (2009) to $1.856m (2010) and that is a really good effort in the current climate. Those impairments have been offset against profits, not against the capital warranty - however, in the end, it is the manager which takes the brunt of the loss. But now that the fund is frozen, then the fund is 'bare' (so to speak) because the only source of capital return is the finalization of loans - as I speculated, this is the time the fund's mettle will be truly tested.

It also dawned on me that the manager is taking a bit of hit at the moment. I notice that there is no benefit for the manager to hold more than the minimum $20m in the fund to get the maximum return benefit from the capital warranty. $20m gives the same return as $40m.

I guess it'd look piggish for the manager to take another $20m when other investors have to cue up in line to get their money, and it'd look piggish if the near 40% return on the warranty was to rise to near 80% (by achieving the same return on half the capital)! As a matter of interest to investors, they might like to check if the manager is entitled to take another $20m while the fund is frozen to ordinary investors (then at least you'd know).

I also note that the manager was careful to make the following note in regard to its $42m two-step, "... * These applications and withdrawals were made prior to the deferral of redemptions on 31 October 2008. ..." (2010 financial report, page 32) - now, aren't they lucky? see, "Timing is everything", right in the gap between 1 July 2008 and 31 October 2008. Don't you all wish you had had such foresight?

Of course you have to keep in mind that there is no financial benefit (in terms of return) to transfer $42m from an ordinary investmnet to a subordinate investment - in fact, quite the opposite, because the ordinary investment was earning a rate of interest, while increasing the subordinate investment did not increase the return.

So, one has to ask "Why would a manager take $42m from a interest bearing account, transfer it to a non-interest bearing account, and then redeem it in a very different way to that of an ordinary investment?"

HYPOTHETICAL: Imagine a fund which becomes non-liquid - and imagine investors find out that management had withdrawn their investments within a short time period of the date of the freeze - wouldn't that raise some concerns? Isn't it the manager which freezes the fund? Isn't it the manager who has all the inside information?

..
 
Re: Equititrust Loans To Quinlivan - CONFIRMED?

how have you been able to verify this to be the case?

Apparently there is also on-going litigation (run GOOGLE re Windsor Turf Farm and Equititrust) regarding a very large loan made to parties associated with a Mr Al Constaninidis and Mr Ian Lazar both of Sydney associated with a large turf farm on the Hawkesbury River, Windsor NSW. I am told that over $20million is at risk and there is some issue with the enforceability of the security documents.

 
Re: Equititrust Loans To Quinlivan: WHAT SPIVY PATH ???

ask a question of very real concern - finally get an answer - and the asker of the question is a spiv? Not much credibility left NOTRUST ???.....
 
Re: Equititrust: GOOD WORK ASICK - the $42M sideways shuffle..... GOTCHA!!!

ASICK identified this in a recent posting:

I wonder why the 42 million wasn't simply redeemed - because if the fund was frozen, then the redemption wouldn't be permitted, unless of course, it was deemed to be a subordinated investment.

I mean, if the manager had 42 million units as an ordinary investment and the fund was frozen, then those 42 millions would be frozen and unavailable for redemption except when offers/payments are made.

If on the other hand, the units are subordinate units, then the units are redeemable in that same frozen fund.

Great isn't it? The manager has converted ordinary units into redeemable subordinate units for redemption rather than redeeming them directly -- food for thought? If you really want to think about it.

Certainly in the 2008/2009 year there were no impairment plugs. In any event, any short term plugs on impairments (keeping in mind, impairments are not actual losses) would be offset by profits in any event.

i'll leave for members to be concerned about what happens to the subordinate units, but I'll bet that the most that will lay at risk will be no more than $20m.

The manager always has the inside scoop - the manager will know when there's trouble on the horizon - members only find out these things months and months later.

That little $42m two-step between ordinary investments and subordinate investments is really something I'd be giving some thought to if I was an investor in the fund. As they say, "Timing is everything".

THIS IS AN OUTRAGE AND OUGHT BE INVESTIGATED BY ASIC IMMEDIATELY!
 
Re: EquitiTrust


In answer to the HYPOTHETICAL part of your post, of course the manager has all the inside information. I would expect the manager to manage the fund responsibly. Whether this actually is happening or not is a matter of opinion. The funds "withdrawn" by management were converted from the profits of the fund to amortise impairments - they haven't been taken from investors' capital. Investors contributions are still currently accounted for and theoretically still exist. We can view all of this negatively as you have, or weigh up the probabilities based on the integrity of the company to date and see it realistically as management techniques to deal with problems of liquidity.

There have been many shonkies out there in the financial industry that have fallen over and been exposed as charlatans. Equititrust has had a constant barrage of accusations and criticism from this thread alone, but so far none of it has stuck convincingly. Perhaps there is one good apple in the barrel. While it is wise to be aware of the possibilities of skullduggery, it is silly to conjure up demons that don't exist.

You put a lot of accent on the manager "withdrawing" funds via the subordinated investment mechanism, and give scant credence to the application of those funds to impairments. From my investigations, I believe the manager has made nothing for 3 years other than administrative fees. This speaks volumes for those who have an open mind.

It will be interesting to see the final outcome in this whole sorry saga. Investors may or may not lose capital, but to forecast a definite result either way is pure conjecture at this point in time. The updated EIF information to be released shortly will be interesting reading.
 
Re: EquitiTrust

Olman said:
In answer to the HYPOTHETICAL part of your post, of course the manager has all the inside information. I would expect the manager to manage the fund responsibly. Whether this actually is happening or not is a matter of opinion.
Click to expand...

Agreed, yes it is.

Olman said:
The funds "withdrawn" by management were converted from the profits of the fund to amortise impairments - they haven't been taken from investors' capital.
Click to expand...

Well, with respect, they have been taken from fund capital - the units were converted (or by whatever mechanism) from an ordinary investment to a subordinate investment and then redeemed from the fund. The full amount finally redeemed from the subordinate investment meant that capital was withdrawn from the fund. Yes, it's the manager's investment, there is no argument there.

There is no issue about the manager's entitlement to its investment, as there is no issue about the entitlement of any other investor to his/her/its respective investment. The only issue to give some thought to is the manager 's redemption of about $42m within months of the fund being frozen.

To me, it's not a good look .. the upshot is that the manager redeemed $42m (of its own money) while those remaining the fund (with their own money) are now locked away and fed on the drip feed. Certainly the manager no longer has $42m being eked back.

Your assertion that the funds were used to 'amortise impairments' is just plain nonsense. How is it possible to amortise impairments (such impairments being well within the capital warranty return), within three months, by converting $42m from an interest bearing investment to a subordinate investment and then redeeming about the same amount?


I don't view anything negatively - I'm a skeptic who likes to delve into the facts, which facts eventually lead on to conclusions.

Yes, investors funds are accounted for and, as you say, "theoretically still exist", subject to loan performance and the quality of security asset valuations.

The outcome for the fund will be what it will be (sorry for the cliche), but for sure, while members await capital returns from ordinary investments, the manager does not (at least to the tune of $42m).

Olman said:
You put a lot of accent on the manager "withdrawing" funds via the subordinated investment mechanism, and give scant credence to the application of those funds to impairments.
Click to expand...

Again, nonsense. The funds were redeemed - and once redeemed, were not able to be applied anywhere within the fund. Any accounting within the manager's own business has nothing to do with the fund.

Olman said:
From my investigations, I believe the manager has made nothing for 3 years other than administrative fees. This speaks volumes for those who have an open mind.
Click to expand...

Are you reading the same accounts as I am? This is from the 2010 accounts,
"... Responsible entity fees and other transactions ..
Management fees
4,460,638 (2010) 5,494,519 (2009)
Return on Responsible Entity’s subordinated investment
10,531,734 (2010) 9,913,410 (2009)
Totals 14,992,372 (2010) 15,407,929 (2009)
The Responsible Entity is entitled to a management fee of up to 1.5% (exclusive of GST) p.a. of funds under management. In addition, the Responsible Entity is entitled to receive a return on its subordinated investment of 40,032,773 units. This return is the amount remaining after payment of Scheme expenses, the payment to investors of their benchmark return and the payment of the management fee to the Responsible Entity. Management fees of $389,703 (2009: $436,740) were outstanding as at 30 June 2010. Returns outstanding on the Responsible Entity’s subordinated investment at 30 June 2010 were $1,022,883 (2009: $3,737,917). ..."


Yes, true - and the final place to assess whether members will lose of not will be when it's all over.

The simple reality is that the manager no longer has at least $42m at risk in that final place because it was able to redeem just in the nick of time (not including the existing capital warranty). "Timing is everything".
 
Re: Equititrust: another one bites the dust: QUINLIVIN

today's press:


More: http://www.couriermail.com.au/ipad/...uncertainty/story-fn6ck2gb-1226010323788Edite
 
Re: Equititrust: another one bites the dust: QUINLIVIN

I herd that while Equititrust may have first mortgages on some of the properties owned by Dudley, what made up their LVRs in the disclosure statements was a cross collateralization between those properties that they hold 1st on a others they hold 2nds on. With Westpac moving (as first mortgagee), it will be good to see just how sound Equititrust's security is over Dudley. I think we are in for some impairments here.

kostag said:
today's press:



More: http://www.couriermail.com.au/ipad/...uncertainty/story-fn6ck2gb-1226010323788Edite
Click to expand...
 
Loans to King Con

Well it seems that the Queensland media is also now on the case of Equititrust. Despite silence on Equititrust's part it has taken the media to reveal who the investors’ money is REALLY lent to . To have lent a single investor's dollar to Quinlivan is a disgrace of monumental proportions. Hey what do you expect from the Gold Coast White Shoe Brigade Mortgage Funds..
 
Re: Loans to King Con: WATCH THIS SPACE

I think we can all safely say, WATCH THIS SPACE, as more poor loan revelations will follow.....

 
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