Beacon Financial Services hit by investment losses
Beacon Financial Services has lost up to $9 million since June 30 this year as a result of an expensive strategy to abandon the underperforming derivative positions in its investment portfolio.
The group, which is not associated in any way with Kevin Wyld or Beacon Investment Management Services, has since September 11 been progressively winding down the underperforming derivative positions which substantially comprised its investment strategy.
The move was expected to result in Beacon making a $2.28 million loss for the full year to June 30.
But a cash shortage since June 30 has forced the group to immediately abandon its entire derivative strategy, leading to what are expected to be losses in the region of $8 to $9 million.
According to a statement issued by the Beacon group, the losses will not impact on the investments of superannuation funds of which Beacon Funds Management (BFM), a wholly owned subsidiary of Beacon Financial Services, is a trustee, investment manager or administrator.
The group says the investment losses are independent of the underlying trading activities in its investment management, fund administration and consulting businesses.
However, the erosion of the group’s assets as a result of the losses could impact on BFM’s ability to act as an approved trustee of superannuation funds underAustralian Prudential Regulation Authority(APRA) guidelines.
BFM is currently in discussions with APRA to determine whether it can continue in its function as an approved trustee.
Beacon says it will continue its operations as a fund administrator, investment manager and consulting actuary through BFM and its other subsidiaries, Australia First Superannuation Administration and Auton Consulting.
The group no longer has any exposure to derivative positions.
Recommended for you
In this episode of Relative Return, host Laura Dew speaks with Steve Johnson, founder and CIO at Forager Funds Management, about the impact of human psychology on investing and whether fund managers can ever beat algorithms.
In this episode of Relative Return, host Laura Dew speaks with Daniel Bower, chief product officer at FinClear, and Bill Keogh, chief executive of Transact1 (a FinClear subsidiary) to discuss cash as an asset class.
In this episode of Relative Return, host Maja Garaca Djurdjevic is joined by shadow treasurer Angus Taylor to discuss the current state of the financial advice sector, the economy, the housing affordability crisis and more.
In this episode of Relative Return, host Laura Dew speaks with Andrew Mitchell, director and senior portfolio manager at Ophir Asset Management, about why he loves working in fund management and the lessons he’s learnt in a decade of running a firm.