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Wellington Capital PIF/Octaviar (MFS) PIF

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Re: Octaviar MFS Premium Income Fund PIF

The whole idea of establishing a proper structure for the AG was to have a committee who could meet with other potential managers and return with a recomendation to stick with WC versus other alternatives.

Agreed
 
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Re: Octaviar MFS Premium Income Fund PIF

DoraNBoots

I dont know how investors can get a say at the table without formalising into legal structure. Its investors money but you remain in the dark about where your money is invested.

Individually an investor may not like what the committee decides but at least its a group of people in the same boat providing direction and if enough investors join then full transparency can be demanded of the manager or else a change can be made.

I am not a fan of WC as you may have picked up from my posts but I have also said that WC may be the right group at the right time. Investors should have the right to decide this.

The reasons I am not a fan is part of the "story" but that is not going to maximise your returns from here.

Retribution will not put food on the table.

LLA and GPM I saw as opportunities to claw back value not add to losses but these have now gone.

The next opportunity is how your manager deals with OCV which has cash and residual assets that a clever manager working only for your best interests has to maximise. I remain nervous about how WC will deal on PIF behalf with PIF.

Maybe a question for JH is what discussions have been had to date in relation to OCV with OPI who as I have previously indicated control OCV fate in PIF and OPI work together.
 
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Re: Octaviar MFS Premium Income Fund PIF

sorry meant to say how PIF proposes to deal in relation to OCV
 
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Re: Octaviar MFS Premium Income Fund PIF

Thank you for your posts Goldfinger

My nerves were a bit frayed yesterday after the Brisbane meeting.

I wish you all the best for the Melbourne meeting

Regards Chris
 
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Re: Octaviar MFS Premium Income Fund PIF

I just re-read the handouts from yesterday. Two distributions before the end of the year, total amount 3cents.Quarterly distributions thereafter which hopefully will repay all of the capital over 3-5 years.There will be no interest paid at all, just a repayment of Capital. WC has been very clever in the wording of these fliers.It will be in the best interest of WC to spin the orderly realisation of assets at market value over a long period of time so WC can collect it's management fee. Seamisty
 
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Re: Octaviar MFS Premium Income Fund PIF

LLA and GPM I saw as opportunities to claw back value not add to losses but these have now gone.

Agree about the LLA and GPM sales. From my post #554 i think you can agree I'm a vocal critic.

Impression I got from BNE forum is JH wants to take the PIF back to its roots which are also her strengths: funding for property development and working with builders. To me, the LLA and GPM 'investments' were out of step.

Maybe PIF was a good fund in the early days ... I don't know. Who was buying the properties being developed? Other MFS entities? Who was paying the interets on the PIF loans? Other MFS entities? I'd like to know.

Question is: Is there enough business out there for PIF? That's for the analysts. But one thing's for sure, our economy IS still growing, our population IS still growing and debt IS harder to get now. The PIF IS a lender.
 
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Re: Octaviar MFS Premium Income Fund PIF

I just re-read the handouts from yesterday. Two distributions before the end of the year, total amount 3cents.Quarterly distributions thereafter which hopefully will repay all of the capital over 3-5 years.There will be no interest paid at all, just a repayment of Capital. WC has been very clever in the wording of these fliers.It will be in the best interest of WC to spin the orderly realisation of assets at market value over a long period of time so WC can collect it's management fee. Seamisty

Jenny told me that our deal would be similar to the failed Donanvan, Oats, Hannaford receivership deal - those investors are getting paid quarterly and are ONLY receiving back their own capital over approx 4 years - they expect to get back 70% of their original investment. As they are no longer receiving interest payments of approx 8%p.a., they are losing that plus inflation @ 4%p.a. their real return will then be approx 54% of their original investment.

If we PIF investors are realistically looking at a current unit value of say, 58% after Jenny gets back 50% of the $197M, then if WC DOES NOT PAY ANY PROFIT AS DISTRIBUTION (only our own capital like D.O.H.), then deduct the 20% inflation over 5 years and our real capital return will be around 38% - that would be a painful joke.

I am still struggling to work out how Jenny thinks she will get back 100%, if she can't even give us any idea of distributions out of business profits. Without a real profit distribution promise, inflation will hammer us. Personally, I recon real inflation is actually higher than the 4% touted by the media, just go shopping at woolies.
 
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Re: Octaviar MFS Premium Income Fund PIF

Breaker1

It looks like JH is proposing to capitalise interest inflows to the fund and then "distribute" it to us along with some returned capital from borrowers over 3-5 years. This, along with the prospect of increased property values as the cycle rises is how she can say "WCIM is committed ( sic don't read this as promissed!) to the full return of investors capital in the next 3-5 years".

Take out underlying inflation 4% x 5 years = 20%
Also take out the opportunity cost of forgone interest (probably at a higher rate of say 7.5% pa ) = 37.5% interest loss, and any shortfall in recovery action against Octaviar etc.

The end result is south of 40% actual return.

The only plus in this equation is the returned capital can be reinvested with another organisation (bank) with no risk at say 7.25% cash rate, which will lift the 40% level according to the timing and amounts of capital " distributed " by WIM.

There's no white knight here, just one liquidators view of the situation!
 
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Re: Octaviar MFS Premium Income Fund PIF

And another article in the AFR. JH says that at the end of yesterday's meeting "the mood of the meeting had swung round to one of hope".
I hope she's right! I am going to take a lot of convincing that it is worth leaving the money (such as it is) tied up for 5 years in the hope that things will be rosy again.

Go to www.afr.com and look under Property - Wellington implores unit holder to hang on.
 
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Re: Octaviar MFS Premium Income Fund PIF

Goldfinger thank you for taking half a page to tell us the patently obvious

A Neanderthal with half a brain can work our that any trades on the NSX is not going to effect the price of the units

That is not the POINT MATE we do want OUR UNITS BEING Sold on the NSX by the financially desperate and sick to predatory scavengers because over time it will inevitably reduce the existing base of Investors

And these holders who enter at a pittance will not care TWO CENTS about what happens to the ORIGINAL HOLDERS

Therefore we as a group will be disadvantaged on any decisions that we need to take to protect our LONG TERM INTERESTS
Now if Jenny Hutson was too come up with some sort of original scheme whereby only existing unit holders buy from other unit holders that need to sell, at a discount that would be an excellent idea

The existing holders have got the most to lose and we know that they are averaging down to save their original investment and will be in for the long term therefore as a group we retain our long term investor base .And that is the most important point mate.
now thats a good idea Jadel (now you are the predator) Have a nice day
 
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Re: Octaviar MFS Premium Income Fund PIF

All

The Corporations Act is very clear on non liquid funds;

Part 5C.6””Members’ rights to withdraw from a scheme

Liquid schemes

A registered scheme is liquid if liquid assets account for at least 80% of the value of scheme property.


601KB Non‑liquid schemes””offers

The responsible entity of a registered scheme that is not liquid may offer members an opportunity to withdraw, wholly or partly, from the scheme to the extent that particular assets are available and able to be converted to money in time to satisfy withdrawal requests that members may make in response to the offer.

The withdrawal offer must be in writing and be made:etc. etc. and so on


It appears everything being offered by JH does not bear much resemblance to the requirements of the Corporations Act.

Please correct me in my opinion is incorrect.
 
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Re: Octaviar MFS Premium Income Fund PIF

It amazes me that so many people who attended the Brisbane meeting are still debating whether the payments promised by Jenny Hutson are INCOME or CAPITAL. She initially said they were "distributions" but when my wife challenged that Jenny corrected herself and clearly stated the first two 3 ¢ payments were to be CAPITAL RETURN.
The problem is that a lot of people seem to have a very short attention span and after the coffee break more than half of them left. That is why there is so much confusion.
:banghead:
thanks bootsnall but consider this, at no time did i indicate that i was at the brisbane meeting,i had informed the group that i was unable to attend any meetings because of my health and the distance to be travelled, i do believe your response to my statement ,should have contained an informative attachment of your observations from the meeting instead of such a derogative remark of assumption, remember we should be working together..
cheers Flatback
 
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Re: Octaviar MFS Premium Income Fund PIF

Hi Flatback,
No personal derogatory remark was intended, I was just disappointed that as soon as coffee & Bikkies were gone, so was over half of attendees. Lot of valid points were raised in the afternoon.
Cheers:)
 
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Re: Octaviar MFS Premium Income Fund PIF

Hi all,
long time reader, first post. So go easy please.:)
Just had a phone call from Justine at WC. She did seem rather vague about it all. One thing that we talked about was the 3c distributions later in the year. She did tell me that I could re invest these distributions:confused:
And yes, I am confused!! Are these a distribution, or do they come from the capital investment.
She also did pump up JH tyres in a big way. I am not sure what to think as there are a few different views about her on here.
Justine was very confident that JH could get all our money back in the 3-5 years. Maybe that's part of her speel. I dont know wether to feel that way or not.
This all happens, after I got warned by a friend that works in finance for the CBA 2 1/2 years ago.:banghead:
 
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Re: Octaviar MFS Premium Income Fund PIF

Forgot to mention, WC estimate of cost of liquidation is $31M. (That's the cost of selling, not loss of value)

Flyer advises that WC is "committed to the full return of investors capital in the next 3 to 5 years". Can someone ask at a forum if this commitment will be adjusted for CPI? And what exactly will happen if things go well, will we have CPI adjusted value back (in our pockets or the fund) + some earnings or alternatively, will the fund simply be wrapped up sooner, or will we have a choice?

Based on a current 45c valuation, a CPI adjusted return of 100% of our capital in 3/5 years would require an average annual return by the fund's investment activities of around 30%/17%.

Based on a current 55c valuation, a CPI adjusted return of 100% of our capital in 3/5 years would require an average annual return by the fund's investment activities of around 22%/13%.

Based on a current 65c valuation, a CPI adjusted return of 100% of our capital in 3/5 years would require an average annual return by the fund's investment activities of around 15%/9%.
 
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Re: Octaviar MFS Premium Income Fund PIF

As an alternative to an NSX listing a constitutional change to scheme voted on by members would address the redemption issue with an agreed moritorium.

The proposed distribution of capital could be available for an early redemption policy. Those that go out know redeem at maybe a little above liquidation value.

Therefore those who stay in get the benefit of a bigger pie.

Vote should also bring this scheme to an end and roll into new scheme.

Why
Because you accept a capital loss and have new units with a new reduced capital value so Centre Link issue is addressed.

Whoever is the manager would then have a benchmark value and reward for performance above this.

New fund has a new floor on value (ie 45 cents) and can pay a dividend and an accepted capital return programme.

New manager such as other WC manager can sue existing RE to pursue insurance policy.

Key question is do investors allow manager to continue to work their capital for additional returns once current investments are realised.

Talk of returning to loaning out to builders and developers send shivers down my spine.

Good developers to complete a project need equity and a relationship with a bank.

Bad developers have no money so they lend from a non bank (ie PIF) and then top up with a mezzanine fund (OPI Pacific Finance) so often they have 100% funding with no external source of income to service debt.

So to get around lack of cashflow often the lending schemes lend not on as is value but on a "on completion valuation" which is something a bank would rarely do. A on completion valuation takes the end sale price and times it by number of units to be built to arrive a value. Different schemes have different mechanisms to control how much can be lent but issue is that on the way through the project is never worth what is lent against it for often the second and sometimes even first when you have half complete buildings are not fully covered.

An on completion valuation is fine as long as projects are finished on time, within budget and sell at estimated amounts but any variation to the above results in problems to lenders not developer as they start with little or no equity.

Whatever exposure you have to development loans must be worked through and not firesaled as you have a direct interest in OPI so it is in second position on many loans to PIF in first mortgagee position so everyone really needs projects to finish.

But to go back into this business other than a minor percentage of your funds is fraught with danger.

Funding developments not only takes a provision of a loan now but also a promise to deliver more funds progressively as project is constructed. So therefore you need to match your return of funds from other loans, bring in new capital or borrow from a bank to iron out cashflow.

Unless the fund become very large this matching is very difficult to manage. You need to charge higher interest on loans for when money is sitting waiting to go out on a draw down.

These higher rates and the fact that the majority of those develkopers that have equity have relationship with a bank narrows the prospective clients down. A mortgage fund is an unwieldy beast that IMO operates where all but the larger schemes plus banks should be.

Any stumble in a late payment from a developer flows into other developments as you dont have the money to pay the builder. A bank does not have this problem so a fund therefore borrows from a bank and we have seen impact of this at PIF when funds hit the rocks.

For those that wish to stick around this fund should just become a more diversified investment fund and should investors leave their money on the table be put into a diversified high quailty portfolio of third party managed investments.

We will see the bottom of the market soon and if fund has surplus capital emerging and investors are happy to see it re-invested then opportunities abound for a manager that can sort the wheat from the chaff. Not in what is a high risk market of development loans.

Sorry to harp on that I have met to many people who have lost to much in non institutional mortgage schemes and history is littered with them.

Finally going back to the earlier subject of alternative offers as an experiment I contacted the CEO of a ASX listed fund management and property group. Outlined history and idea of AG and would he like to present his companies credentials to proposed committee if an alternative manager was sought.
Answer was yes would love to and I think I could have got the same response from 20 more.

There is no point in this until AG understands the full financial position intimately. WC may be the right group for the job but AG must establish a mandate and a series of benchmarks and then ensure it has a real say in the outcome of its members.

Your committee must have access to all books and records as a primary negotiation point with the manager. You can only start at the beginning, incorporate you group and get the AG team into understanding the books.

That is not a lot to ask of the group asking for investors trust.
 
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Re: Octaviar MFS Premium Income Fund PIF

Your committee must have access to all books and records as a primary negotiation point with the manager. You can only start at the beginning, incorporate you group and get the AG team into understanding the books.

That is not a lot to ask of the group asking for investors trust.

If JH refuses to let us look at the books due to "privacy issues" what then? We need to legally subpoena them..this will take money that we don't have and lots of time..who has that? If one of these managers are fair dinkum, they will put their money where their mouth is and get on with it. You know our lawyer..they can contact her and take it from there. It's all well and good to say we should do this and that, but HOW..most people here are retirees mate, they have NO idea. They are pipe dreams unless someone with deep pockets comes in to play and can mount a challenge that IS in fact in the interest of investors and BETTER that WC. You may know the answers and have great ideas, but unless you know how to convert them to action, you are just another forum member expressing their opinion, with no money to lose. Of course you are more than welcome to express that opinion in this public arena and have every right to, but it that's all it will ever be, another opinion.
 
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Re: Octaviar MFS Premium Income Fund PIF

TUART keeps telling the AG to form a committee etc urgently. Obviously any committee candidates would have to have a good understanding of funds management processes and business in general. Several posts have revealed the existence of such qualified people. Every time I read a Tuart post I am fearful that valuable time is being lost. What's happened to the $100 contribution proposal? Have we enlisted many new AG members over the past few days? What happened to the idea of having OCV funds frozen? I'm truly grateful to all those who are and have been working and organising so hard in their private time. It's possible that the geographic spread is too much of a hurdle. An immediate AG mission statement mightn't be a bad idea. It could set clear objectives and time-lines.
 
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Re: Octaviar MFS Premium Income Fund PIF

One of our AG members received a call yesterday from a contractor/builder on a construction job in Port Macquarie - Aston Hill apartments in Mort St. - he claims the project is Wellington Capital's and sub contractors are not being paid. He said he would be at our AG meeting on the 9th. He said he had no money in the PIF, did not go into detail & seemed to be in a hurry. He just said Wellington Capital was not paying.

The Aston Hill apartments are a development of luxury apartments that were being sold off the plan; construction stopped sometime last year (if I remember right) and the developer was desperately trying to work something out with his creditors. I haven't heard anything about it for months. My partner and I saw the promotional spiel 2 or 3 years ago and couldn't believe the prices and asked the guy if he really thought he'd ever sell the $1.7 million plus apartments. He said their market was the Eastern Suburbs of Sydney, Hunters Hill, Upper north shore etc.

This project should really have no relationship to MFS/Octaviar and the PIF but it'll be interesting to hear what he has to say. Does anyone know anything about this one?

Cookie1
 
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Re: Octaviar MFS Premium Income Fund PIF

The primary issue in my mind is establishing the true value of the Funds assets then we can proceed from that point

Brother in law in valuation buisness tells me the usual policy is slash and burn the loan book , then any upside makes you look good

Getting a transparent , independent valuation for investors , will give us a much better idea of where we stand ,at far less cost, than her her travelling road show ,video clips and shiny brochures ,
 
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