Friday, February 19, 2010

Surprise: Peter Johnston still has not taken my bet…

Nobody has taken my bet.

But another fund manager across town is offering a derivative bet (in smaller denomination) that nobody will.  And nobody has taken that either. 

20 comments:

Anonymous said...

When will you know the final result?

How much of the money do you think will turn up?

John Hempton said...

The administrator has applied to be a liquidator. The final result will be about six months after that I guess -

I think in the ASF less than 10 percent will be recovered.

J

Nick said...

In that case John, you should change the bet to <10% recovery you win, >10% he wins.

Perhaps 10% is a little punchy when you really can't have a huge level of confidence in the exact number.

Perhaps make a 40-60 spread? If he doesn't take that then he is really far more of a dribbling moron than he already sounds.

Good luck, either way.

John Hempton said...

No - he is arguing publicly that the funds should not be liquidated and indeed they are unimpaired.

--

I have a view that they are seriously impaired - but I really have no idea.

I will do a bet on 50 percent - but I think they would have been 100% impaired had I not written my letter.

J

Anonymous said...

Is there any chance the fund won't be liquidated?

Anonymous said...

I thought the original article mentioned $1 billion in assets and now it is $100 - $200 million. Is the problem fund smaller than originally thought.

John Hempton said...

There are two entities - TRIO CAPITAL and the ASTARRA STRATEGIC FUND.

Trio used to boast on its website of 1.1 billion under management. When I wrote the letter to regulators I believed that boast - indeed it was the 1.1 billion that prompted me to write it. {I know too many small frauds...)

The 1.1 billion was probably a lie or misrepresentation. After they collapsed the number dropped to 430 million.

The truth is probably about 50-100 higher than that. My guess - about 480 million - but the topline number is not known.

Of that 480 million about 160 will - at my guess - be missing. That could be higher - but about 330 million of assets have been identified. [The larger the top line the more that is missing... but the top line is not known...]

Of that - 118 million - almost all missing thus far (or "heavily impaired) is in the ASF. There are a few other funds (notably ARP Growth) that look impaired too. Those were a surprise to me. They are also sub-vehicles of TRIO.

No chance they will not be liquidated.

J

Anonymous said...

John,

This is becoming a farce. How do you think investors in Astarra feel knowing that you are throwing around $100,000 when, in your own words, you 'realy have no idea'?

If a bet was put to you in private and you made it public, why would Johnston, who actually has a vested interest in a positive outcome for investors, want to participate? It belittles the efforts he seems to have gone to to track down the funds. Something the ASIC and the administrators have not done.

As for administrators and liquidators, it is in their financial interest to drag this out. Your call of a 'final result will be about 6 months' seems a little naive to me.

John, in short you seem to be delighting in the loss of others.

That's a pretty sad place to be. I am a financial adviser and I have no clients invested with Astarra. It does not prevent me from hoping for a positive outcome for them.

Andrew

John Hempton said...

To the person who thought I was delighting in the loss of others - get over it. I reported this before ALL the money was gone.

Better than you did. I did the clients a favour - they will get something back.

2). Its news to me ASIC went to HK.

3). I am fairly certain of myself. Its $150 K to $100 K. I don't mind who takes the other end of the bet. Wanna step up yourself. If you think PJ is right it will be the easiest $150K you ever make.

J

Finally this was OBVIOUS. Financial planners who put their clients in this deserve to be prosecuted. If you did I would advise getting a criminal lawyer to cover your worst case.

J

john said...

not so obvious to the Financial Planner employees of the Principals of the firms who may not have known their employers had equity in the fund. After all, recommendations are only made after going through the AIOFP 'Filtered Research Committee'. Remember AIOFP membership espouses not being 'compromised by product provider ownership'

Anonymous said...

John

I will bet you that $100k that ASIC have already visited HK at least once.

John Hempton said...

I would not take that bet about ASIC visiting HK once already - but hey - I do not know.

But it would figure...

J

MikeT said...

what is the denomination and other terms the other fund manager is offering?

What Peter should do is make a few of the derivative bets and then take up the bet with you and get a "free roll" :)

John Hempton said...

I did note that the derivative bet was in smaller denomination. Low 4 figures...

J

Anonymous said...

If a bet was put to you in private and you made it public, why would Johnston, who actually has a vested interest in a positive outcome for investors, want to participate?

I'm not sure anyone's accused Johnston of being dishonest, and I certainly haven't read any suggestion of that.

The accusation is of naivety. It is a serious accusation in J's case, since implicitly part of his job as a head of an association of financial planners is due diligence. He represents financial planners, and it's better not to represent financial planners who steer client money into funds which have trouble accounting for their assets. No-one wants to represent shonks*, and if his organization represents shonks then it begs a question about the how well it is performing its implicit due diligence role.

If Johnston takes the bet and wins he makes Hempton look like a blustering idiot. He publicly makes it very clear that he's not naive but is quite savvy. Showing that Hempton is a fool would add confidence to the Astarra investors. It also adds to the reputation of his financial planner society. It's very much in Johnston's interest to take the bet if the funds are solvent.

* Not that I'm suggesting that anyone is a shonk, or represents shonks, just that there are many people who would say that a fund who can't explain to an administrator or auditor where its substantial assets are within 3 days, let alone 3 months, deserves to have very serious questions asked of it management.

Anonymous said...

John,

you haven't given Peter Johnston enough incentive to take your bet. Asking him to put up $100,000 to win $150,000 when it's extremely unlikely that all $118M will be returned to investors only proves that he can afford to lose $100K a lot less than you can.

If you offered him 10 to 1 odds on all $118M being recoverable and allowed him a lower minimum bet such as $1000 then you would truly expose the hypocrisy of his position.

If he isn't willing to risk even $1000 to back his "she'll be right mate, the $118M will turn up, don't you worry about that" public statements, then he'll be exposing his self serving spin in a way that even your average SMH reader will understand completely.

Steve

Anonymous said...

I am an investor within the Astarra Conservative Fund and the marketing used was not for the Astarra Strategic Fund but for the Diversified Funds which had between 1-5% exposure to ASF. You need to get your facts right and stop writing garbage.

In my fund, all assets (minus the ASF) have been acounted for but now PPB are using this fund to pay their way as the RE. I think the PPB fees will hurt a lot more than the ASF (if no money turns up).

John between yourself and Richard Butler all you care is lining your own pockets. Why do you want current investors to contact you? So you can add them to your mailing list and recommend your own products? What are you investigating?

ASIC are investigating and I look forward to knowing their findings when their investigtion has completed instead of reading about yours which most is made up with clever wording used to cover your hide.

John Hempton said...

Dear Anon

I think - but cannot confirm - that you will find that the Astarra Conservative Fund is worse than your financial advisor has lead you to believe...

It has been five months since my letter and nobody has a good accounting...

Let me say - that at least until this time - my letter - which was only about the ASF - has been the best guess yet as to the money location.

John

DavidP said...

all quiet on the Astarra front? Has he taken your bet?

John Hempton said...

Alas he has not taken my bet - which is unsurprising.

I think ASIC is behaving duck-like on Astarra - all calm on the outside - lots of movement on the inside...

But then what do I know?

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