The fall of van Eyk, the respected Australian financial markets research house started in 1989, was fast.
It was the move into managed funds which started the slide and led to van Eyke being placed into liquidation.
The problems centre around a series of portfolios van Eyk ran as investment manager on behalf of Macquarie Bank, which is the responsible entity charged with protecting investor interests for the funds.
The Blueprint Funds had about $800 million under management but the problem area is a $31 million investment in hedge fund Artefact Partners.
The management at van Eyk believe the reason for the company’s failure was that Macquarie froze and terminated the Blueprint Funds because of an illiquid fund which represented 3.75% of total assets, the $31 million.
Part of that cash ended up being invested in a UK newspaper group, Local World. And part went to a fund connected to a former van Eyk shareholder, New Zealander George Kerr.
The administrator, Trent Hancock of Moore Stephens, has been compiling a timeline of events.
He’s still investigating but this is the story so far:
- July 2012 – $31 million invested in Artefact Investment by the van Eyk International Shares Fund
- February 2013 – Macquarie Bank instructs Artefact to repay $300,000 of the Artefact investment within six months.
- September 2013 – The entire Artefact Investment is redeemed in cash.
- September 2013 – The funds from the Artefact Investment are invested in local newspapers in the UK.
- September 2013 – First possible attempts by Macquarie Bank to recover the funds invested in Artefact.
- July 2014 – Macquarie demands from Artefact the full portfolio that the Artefact Investment has been invested in.
- July 2014 – Macquarie suspends redemptions from the four Blueprint funds with exposure to the Artefact Investment.
- August 2014 – Van Eyk International Shares Fund declared illiquid by Macquarie.
- September 2014 – Nine remaining Blueprint funds are terminated by Macquarie.
- September 2014 – The Company enters administration.
Hancock says he considers the company’s termination as fund manager of the Blueprint series of funds by Macquarie in August and September to be a significant contributing factor to the company’s failure.
Blueprint revenue accounted for about 60% of total revenue of about $8.2 million.
“The termination as fund manager significantly reduced the company’s total revenue and, based on the information available, a commensurate decrease in costs was not forthcoming,” Hancock says.
In seven out of the twelve months before the appointment of an administrator van Eyke had losses due to a sharp fall in revenue.
The corporate watchdog ASIC (Australian Securities and Investments Commission) has raided the Sydney offices of van Eyk and seized documents.
The New Zealand regulator, the Financial Markets Authority, is also investigating.
The research part of the van Eyke business is about to be sold.