Two weeks ago we reported the damaging coverage of Gold Coast based funds manager LM by ABC program Four Corners. It reported that LM was using new funds raised to pay interest to existing investors, plus it was marketing itself as a private bank. This sparked an enquiry by the ACCC. On Tuesday LM called in FTI Consulting as voluntary administrators of LM Investment Management Ltd. LM has a long history of providing mezzanine funding to the retirement village sector and it caused great dislocation to a number of village operators post GFC when it withdrew funds at short notice.
LM is at pains to say this is not a liquidation or receivership but it has acted in the best interests of investors. LM has approximately $3 billion under management. Following the GFC and the difficult Australian fund raising market, LM moved overseas to seek investors. They now have 130 staff in eight offices including NZ, Hong Kong, Dubai, London, and South Africa. This strategy has however been hit by the high Australian dollar.
