Macquarie notes agreed settlement with ASIC

Macquarie Investment Management Limited (MIML) notes today’s ASIC announcement that MIML and ASIC have filed joint court submissions relating to an agreed settlement over MIML’s role as Responsible Entity of one of the van Eyk Blueprint Funds, van Eyk Blueprint International Shares Fund (VBI).  VBI was one of the Blueprint series of funds of which van Eyk Research Pty Limited (van Eyk, now in liquidation) was investment manager.

The settlement relates to a 2012 decision, by van Eyk as manager, for VBI to invest in a fund managed by a company called Artefact.

MIML was appointed Responsible Entity of the van Eyk Blueprint funds in 2003.

On 1 August 2014, after MIML learned that Artefact, contrary to its investment mandate, had invested in an illiquid investment, MIML suspended applications and redemptions from VBI and the three diversified van Eyk Blueprint funds which had invested in VBI.

MIML then terminated the relevant van Eyk funds, returning to investors all of the liquid assets in the funds, and put significant resources into realising the remaining illiquid assets of the funds for investors.

By April 2015 MIML had already returned to investors approximately 89% of funds in the VBI fund, with the balance of these proceeds last month being returned to VBI investors, resulting in a 102.2% return on VBI’s unit value at termination.

Following this significant recovery action by Macquarie, the entire $30 million which van Eyk decided that VBI invest in Artefact in 2012 has now been returned to investors.

ASIC and MIML have agreed in today’s settlement that, as Responsible Entity, MIML did not exercise sufficient care and diligence in relation to van Eyk’s decision to invest in Artefact, the ongoing monitoring of van Eyk in relation to Artefact, and VBI’s liquidity.

MIML further notes ASIC’s acknowledgement of the efforts made by MIML to have investors’ funds repaid. This matter arose within MIML’s non-core outsourced Responsible Entity business which MIML is no longer pursuing.