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Macquarie Property Income Fund

Discussion in 'Managed Funds & Index Funds' started by Russ, 1st Mar, 2010.

  1. Russ

    Russ Member

    Joined:
    1st Mar, 2010
    Posts:
    5
    Location:
    Sydney, NSW
    There are other threads on this topic but they are old so interest may have wained. I have lost 93% of my investment in this fund and Macquarie has been chasing me to repay a loan I took out and invested in this fund. I do not have the money and they are refusing to loan me the money so I can repay the loan when I have sold my house. I know the PDS said there is risk involved in investing in the fund but I never dreamed I would be risking 140% of the investment ($100K + interest over 4+ years). I think the fund managers should be taken to task over their lack of a risk management strategy as it appears they had none. I do not know my options and would appreciate any feedback. Yes I know I should have had an exit strategy, but I thought the fund manager was supposed to manage the risk. If it was a DIY fund I would have managed it with fewer fees.
     
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

    Joined:
    9th Jun, 2005
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    Location:
    Sydney, Australia
    I know it is difficult for you - I've lost money through sharemarket investments and it is never a nice experience.

    However, I do think you need to maintain a little perspective here.

    The ASX200 Property Trusts index dropped about 80% in value from its highs in Feb/March 2007 to the bottom of the market in March 2009.

    Risk management is one thing, but most funds have a mandate to be invested in the market - and when the market suffers like it did over this 24 month period, such funds are often just passengers.

    I don't know the fund in question, but unless they had the ability to move 100% to cash, there is very little they could have done to avoid the carnage.

    Unfortunately, it seems you have experienced almost the "worst case" scenario for this investment - a highly leveraged position and an investment sector that was decimated (in hindsight, the sector was highly over valued - but we tend to be blind to these things at the time).

    I suggest you get yourself some professional advice at this point.

    If you are in the position of needing to sell what few assets you have remaining, you need to try and negotiate with the lender to retain some degree of control over how things proceed.

    I suggest you sit down with your accountant and work out exactly what your situation is, come up with several plans on how you might be able to deal with the demands by the lender - and start negotiating with them.

    Did you offer any security against the loan? Did you offer a personal guarantee? Was the loan full-recourse? Do you actually have sufficient assets available such that if you were to sell some (or all) of them that you would actually be able to clear the outstanding debts?

    If you owe more than you own, then your only option may be bankruptcy - but you probably want to avoid that if at all possible. This is where speaking to a specialist advisor is worthwhile.

    I know it's not easy - but hopefully you can get some good advice and find a way through this horribly situation.
     
  3. Russ

    Russ Member

    Joined:
    1st Mar, 2010
    Posts:
    5
    Location:
    Sydney, NSW
    Sorry for the late reply Sim, I have had a lot happening.
    I am just disappointed the I employed an "expert" to invest money for me which was subsequently lost. A competent manager should have as his main priority the security of the funds in his care and should have had a strategy for this market downturn, if not anticipated it. There are enough people now claiming to have seen it coming. That is why they get the big bucks! Otherwise I would have been better to have invested the money myself. My personal investments fared considerably better than this fund and they were in CFD's which is a very high risk vehicle.
    I am continuing to make my own investment decisions instead of trusting the remains of my capital to the "experts" who, after all, work for the company which employs them, not the investors. A well known quote from such managers is: "plenty more where he came from"
    R
     
  4. crc_error

    crc_error The Rule of 72

    Joined:
    1st May, 2007
    Posts:
    1,367
    Location:
    Melbourne, VIC
    People like macquarie are not investment experts. They are fee factories. You can liken them to used car salesmen. They sell you a lemon, and say too bad!

    They are basically sales reps for companies flogging product..

    I was lucky to get out of all macquarie investments before the GFC, as I could smell a rat..