The LM Investor Victim Centre (LMIVC) was established by investor Victor John in October 2013 who has created a comprehensive website detailing the chronology of events and setting out the action investors can take to help push for an inquiry.
So far the campaign has gathered the support of more than 480 investors, almost 90% of which were invested in LMIM’s flagship fund, the Managed Performance Fund, which had around A$400m (US$370m, £220m, €267m) invested in it at its peak.
On the website (available here), John estimates having 500 investors signed up to the campaign will represent just under US$35m of funds invested.
International Adviser recently revealed the full scale of the sale of the MPF by some advisory groups. According to a document seen by IA more than 80 advisers each channelled over A$1m of their client’s money into the MPF.
LMIVC said, as well as appealing to the Australian government directly, it is asking investors to “alert their home country finance ministers to the disastrous Australian LM situation”. In correspondence to International Adviser John said the fact Australia hosts the G20 summit meeting this year “offers finance ministers a fine opportunity to place some critical emphasis on ‘fair & just resolution’ for LM investors”.
It should be noted that a group of advisers, very shortly after LM began to get into difficulties, came together with the same intention of fighting for the rights of investors, calling itself the Advisers Committee for Investors.
The first signs of trouble at LMIM came in 2009 when it took the decision to close its First Mortgage Income Fund and to sell down the fund’s assets in order to repay credit.
Problems seemed to be compounded at the end of 2012 when a company called Trilogy wrenched control of the LM Wholesale First Mortgage Income Fund from it.
At the same time, however, the company’s founder and chief executive Peter Drake maintained there was nothing wrong and the group criticised Trilogy's "woeful behaviour". Days after Trilogy’s takeover, Drake said: “LM is a diverse multi-fund manager currently managing nine Australian funds with total assets under management with a realisation value of A$3bn.”
Five months after Drake made this statement, on 18 March 2013, the company filed for administration.
