CFS terminates $852m mortgage fund
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Colonial First State (CFS) has terminated its Colonial First State Mortgage Income Fund.
Colonial First State chief executive Brian Bissaker has confirmed the termination of the $852 million fund today, saying it was in the best interests of investors as a whole and would allow all investors to receive regular payments from the net proceeds of the fund’s assets.
He said that, at this stage, it was envisaged investors would receive full recovery on their investment outlay.
Bissaker told Money Management the decision to terminate the fund had followed a review process which had identified a small number of mortgages within the portfolio that had the potential to become bad debts.
The fund was suspended in October 2008, and Bissaker said redemption requests through periodic withdrawals offers had consistently exceeded the cash available for payment.
CFS said that investors would receive at least 10 per cent of their total account balance as part of the first capital payment in late March this year, with subsequent capital payment amounts being determined by the cash available from mortgage repayments.
As a separate issue, CFS today also announced that it had decided to terminate its Wholesale Guaranteed Mortgage Fund, comprised of $13 million in funds under management, and which closed to new applications in 2004.
AUTHOR
Mike Taylor
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