pif related news, page-37

"Once the loan is paid off, it is essential that WC come clean and produce a meaningful report to Unit Holders disclosing the true value of the assets left in the Fund."

Agree totally Filex, and there is another reason why WC will smarten up their act - there's competition coming into the arena. See this article in the Australian today:

Trilogy canvasses investors in $1bn bid for City Pacific

Anthony Klan | February 26, 2009
Article from: The Australian

BRISBANE fund manager Trilogy Capital Group will launch a hostile takeover bid within weeks for the $1 billion City Pacific First Mortgage Fund.

Trilogy chairman Rodger Bacon said the fund manager had contacted "close to 1000" City Pacific fund investors and was close to launching an official takeover, seeking more than 50 per cent control.

"We don't underestimate the difficulties of convincing 50.1 per cent of unitholders to side with us," Mr Bacon said.

"But if this groundswell we are seeing is anything to go by we might be pleasantly surprised.

"If you can find a happy City Pacific unit holder I'll walk from Sydney to Perth," he said.

Mr Bacon said Trilogy would seek to replace the listed City Pacific as the responsible entity controlling the First Mortgage Fund, which raised $1 billion from mum-and-dad investors and onlent it to borrowers such as property developers.

If Trilogy were successful, it would cut the management fees charged to investors from the current 2.76 per cent, which was "well above the industry average of about 1.5 per cent", he said.

Mr Bacon would not disclose the level of management fees Trilogy planned to charge investors. A City Pacific spokesman said the group believed it "retains the confidence of the fund's unitholders".

The fund had not yet received a formal takeover bid from Trilogy and if it did receive an approach "we would comply with our legal obligations as responsible entity", he said.

"We are acutely aware of the financial difficulties of many of our unitholders and are committed to guarding value in the fund," the spokesman said.

"We are also pleased to have a strong and constructive relationship with our financier, with the recent 12-month extension to the fund and City Pacific's facilities allowing us to reduce debt in a measured manner."

On Thursday last week City Pacific announced it had negotiated with the Commonwealth Bank a one-year extension to debt worth $95.5 million and a one-year extension to a $108 million debt facility held by the fund.

In wording suggesting that Commonwealth was now controlling City Pacific's finances, the group said it had "requested" that Commonwealth allow City Pacific to make distribution payments.

"The financier has indicated it will consider the recommencement of distributions and has requested a proposal from City Pacific detailing a distribution payment plan," the group said.

The City Pacific First Mortgage Fund has about 11,000 investors and for Trilogy to gain control it requires support from voters controlling more than 50 per cent of the fund's 887 million issued shares.

"We are very keen to go forward and this takeover bid will go ahead, that's for sure," Mr Bacon said. "This will be a proxy fight."

Trilogy was well equipped to manage the fund because its management consisted of three former Challenger International directors who had previously managed the Challenger Howard Mortgage Fund, one of the nation's biggest mortgage funds. "We managed the fund for seven years from 1998, growing it from sub-$500 million to more than $2 billion," Mr Bacon said.

"The key thing is that the fund ran smoothly and there was no controversy.

"We bring to the table absolute independence, considerable experience and a record of integrity," Mr Bacon said.

The City Pacific First Mortgage Fund has been frozen to redemptions since August."

I have had money in the Howard Mortgage fund since 1996 (and have just today cleared the remaining balance to keep living) the service was efficient and the level of reporting excellent.