lift capital collapses

From Business spectator:

Lift Capital Partners collapses


By a staff reporter

The turmoil engulfing the Australian margin lending business has claimed another victim with unlisted Sydney-based broker Lift Capital Partners entering administration.

The company has 1600 clients and is backed by American bank Merrill Lynch. There's speculation that Merrill has demanded payment for some of its margin lending.

Lift Capital Partners and Lift Capital Nominees have appointed Tony McGrath and Joseph Hayes of McGrathNicol as voluntary administrators.

Lift Capital joins Opes Prime and Tricom as casualities from the stockbroking fallout that has added to jitters among Australian securities holders.

The boutique stock lending firm used a similar margin lending model to Opes Prime, involving a transfer of legal ownership to the broker.

McGrathNicol said they expected that a significant surplus of funds will be available to Lift Capital once the secured creditor has been repaid.

The creditor, believed to be Merrill Lynch, has a fixed charge over the listed shares secured against funds to Lift Capital, McGrathNicol said.

"It is too early to speculate on the ultimate return to creditors and investors. However, it appears that the underlying value in the shares is good and it is expected that a reasonable return will be achieved", Mr McGrath said.

"The immediate focus will be to work closely with management and other external parties to ensure that the value in the business is preserved."

McGrathNicol said a hotline for investors will be set up today and a meeting of creditors will be convened for 22 April.

Media reports have linked $25 million in Lift assets to former MFS heads Phil Adams and Michael King. The firm also had exposure to Allco Principals Investments, now in the hands of an administrator.

According to Lift's website it specialises in "providing structured equity products that enable investors to borrow money to invest in a wide range of assets."

"As a specialist, independent provider we are better equipped to develop innovative products and services for all investors as well as seeking to tailor solutions for those who may not meet the typical lending criteria of other institutions," it says.

Lift was set up in 2004 by former Citigroup banker Bassem Jammal.