The proceedings involve investments made by van Eyk Blueprint International Shares Fund (VBI Fund) for which Macquarie IM was named as the responsible entity.
In 2012, VBI Fund invested A$30m into a Cayman Islands-based fund known as Artefact Partners Global Opportunities Fund.
After discovering that Artefact has invested in an illiquid investment in August 2014, Macquarie IM shut VBI Fund down.
Macquarie IM has admitted that it failed it its duty to oversee the VBI Fund and also allowed investors to redeem or withdraw units from the fund after it was deemed illiquid.
In agreement with Asic, Macquarie IM conceded that it had failed to comply with its duty of oversight as outlined in the Corporations Act.
This includes failing to adequately address risks associated with the decision by VBI Fund to make three investments into Artefact between 6 July and 30 August 2012.
Additionally, it allowed members to redeem or withdraw units from the VBI Fund when it was illiquid, in contravention of the Corporations Act and the schemes constitution.
Macquarie IM also failed to made adequate and timely enquiries in relation to van Eyk’s monitoring of VBI’s investment in Artefact.
The court will hear joint submissions from Asic and Macquarie as to the appropriate penalty to be levied. The final decision, however, rests with the court.
On 1 August 2014, Macquarie IM suspended redemptions from the VBI Fund, and three other funds due to their exposure to the VBI Fund.
On 15 August 2014, Macquarie IM terminated the VBI Fund, with unit-holders owed around A$30.9m relating to the Artefact investments.
Since then, Artefact has repaid A$20m to the VBI Fund.
Macquarie IM recently paid the remaining approximately A$10.9m plus interest to unit holders (less fees and winding up costs) and expects to recover the majority of that amount from Artefact's liquidator.
Asic has acknowledged the efforts made by Macquarie IM to have investors’ funds repaid.
Asic has an ongoing investigation into van Eyk Research, the entity Macquarie IM appointed as the investment manager of the VBI Fund. Van Eyk Research went into liquidation in 2014.
Greg Tanzer, commissioner of ASIC, said: “The Corporations Act places important obligations on responsible entities which protect the interests of investors.
“Those obligations require responsible entities to have a supervisory and monitoring role in relation to funds, even where external investment managers have been appointed. ASIC will take action against responsible entities when they fail to meet their obligations.”