'Nightmare fuel': Clime IM reviews APL selection amid product failures

The failure of First Guardian is “pure nightmare fuel”, according to Clime managing director Michael Baragwanath, and is prompting the firm to overhaul its approved product list (APL) selection. 

In its financial results for the three months to 30 June, it discussed improved transparency being implemented on its APL.

“We are implementing a new transparent audit and reporting framework that allows advisers and clients to inspect underlying documents, exact holdings and transactions. 

“The approved product list is being audited, and only products that comply with our reporting framework will be deemed suitable for investment. Considering recent product failures, our approach to approved products will be – trust but verify.”

Recent high-profile product failures include First Guardian, Shield Master Fund, and US Masters Residential Property Fund.

VIEW ALL

View all

Expanding further on this to Money Management, Baragwanath said he believes licensees have an obligation to know what is happening in the products where their clients’ money is invested and is investing in resources to achieve that goal.

He referenced the instance of First Guardian, a managed investment scheme which was invested in by around 6,000 investors via superannuation platforms. Many of those investors were called by lead generators and referred to personal financial advice providers who advised them to roll their superannuation assets into a retail choice superannuation fund, and then invest into First Guardian.

The assets in this fund were frozen by ASIC in February 2025 and orders have been made to liquidate the fund.
He said: “What has happened with First Guardian and other products is pure nightmare fuel. It keeps me up at night. When I first saw the underlying assets First Guardian held while on a superannuation platform for retail investors, I was really upset about it. 

“Product failures can happen, deals can go bad. There is risk with the potential for return. The financial system overall can and should tolerate the potential for losses. But I feel we have an obligation to know exactly what is happening with our client’s money when it’s with another manager or product, so we’re investing in resources to make that happen.”

Financial results

Meanwhile, total funds under management and advice increased by 1 per cent over the quarter to $1.7 billion, with the largest proportion standing in its mandates and directed FUMA at $582 million followed by $403 million in individually managed accounts. 

Funds under advice in Clime Private Wealth stood at $1 billion.

In terms of people moves, Clime announced it has hired Leo Economides as its chief investment officer as Will Riggall steps down. Rigall joined Clime in January 2022 and was promoted to its board as a non-executive director last October. 

Economides was formerly the CIO at boutique investment manager Performance Preservation Capital and an investment and credit director at Boston Global Group. 

It has also promoted Anshul Thapar, who joined Clime in March as the operations manager for off-market and direct assets, to head of operations. 

In addition, it has appointed eight administration staff for a “business transformation team”, two new advisers and two investment specialists.

The firm said: “Leo brings over 35 years of experience in valuation, structured finance, project finance, and funds management, with a distinctive actuarial background that underpins his rigorous approach to risk and opportunity analysis. He has held senior roles across institutions such as Macquarie Bank, Bankers Trust, and Oxley Corporate Finance, delivering complex structured property and infrastructure development transactions exceeding $5 billion in value.

“Anshul was recruited to manage our unlisted asset operations but has quickly demonstrated an ability to add value across the business by for personal use only Clime Investment Management Limited 3, breaking down complex workflows, negotiating hard with our suppliers, and identifying weak points. Anshul will be supported by the recruitment of two additional operations staff and a product manager.”