Credit specialist funds manager La Trobe Financial has taken over the management and administration of the East Coast Mortgage Trust (ECMT), rolling 85 per cent of investors’ interests into its own mortgage fund and returning the balance to investors.
La Trobe officially took over the management of the $68 million fund last week after the 3500 investors in EMCT voted late last month to shift the management to the Melbourne-based manager after ECMT closed the trust to new investors earlier this year.
La Trobe chief wealth management officer Randal Williams said investors would have 15 per cent of their interests in the trust returned to them after it sells one remaining property - a holiday park in Port Stephens - as La Trobe was not suited to the management of the property. The property will be sold by ECMT and proceeds distributed as cash to members of the trust.
Williams said that as part of the transfer investors in ECMT would lose 10 cents in the dollar on their investments due to a write-down in the value of the trust. At the same time La Trobe would manage the mortgage investments of the trust and expects they will be repaid in the course of normal events.
“Our aim is to get back as much of their investment as we can and we are quietly confident we can get a good result for investors,” Williams said.
ECMT was managed by Lismore Management Corporation (LMC) and offered investment opportunities and commercial finance for residents of the north coast of New South Wales and south-east Queensland.
LMC stated via its website that as a result of the global financial crisis and the 2008 announcement of the Federal Government Bank Guarantee, it had struggled as a mortgage trust and would commence an orderly wind-down of ECMT.
La Trobe has more than half a billion dollars in retail funds under management and has indicated it is looking at a number of other mortgage books.