Addwealth Achiever Fund distanced from banned dealer

Primary Securities managing director Robert Garton-Smith told ifa that investors and advisers should not associate the Addwealth Achiever Fund (AAF) – of which his company is now responsible entity – with its former manager.

“Addwealth has nothing to do with us and nothing to do with the AAF,” he said.

“In October 2012, we were overwhelmingly voted in as the new responsible entity for the fund and made an amended undertaking to [ASIC] to that effect and released a new fund constitution the following day.”

A letter from Primary Securities chairman Ian Murchison to investors on 18 March indicated the responsible entity is now “negotiating with investees of all funds with a view to improving the income and value of the fund” and focused on “reducing costs”.

It suggests that the future of the fund – which has holdings in a range of asset classes and owns a significant stake in the Cottesloe Beach Hotel in Perth – will be determined at a meeting of investors to be held in Perth in April.

The AAF has $38.4 million in total assets according to the letter, though this figure is down from $51.4 million in 2009, according to Bloomberg. It formerly had a five-star rating from Morningstar but the research house ceased its rating in February 2011 because “Addwealth did not meet our monthly deadlines for delivery of the data needed for the calculation and publication of ratings”, a Morningstar spokesperson told ifa. 

“The Morningstar rating, from one to five stars, is essentially a quantitative measure calculated on the basis of risk-adjusted peer-relative historical performance,” the spokesperson added.

Despite Garton-Smith’s distancing of the fund from its former operator, Primary Securities intends to retain the name of Addwealth Achiever Fund.

“We intend to keep the same name,” he said. “We always keep the same name for the companies and funds we take over, it’s a more honest approach.”

Asked whether continuing the fund’s name might produce confusion in the eyes of investors, Garton-Smith responded with a firm “no”.

The decision to retain the fund’s original name comes despite a stipulation, in the AAF’s constitution, that “if a responsible entity retires or is removed, the incoming responsible entity must, unless otherwise approved by the former responsible entity, change the name of the fund to a name that does not imply an association with the former responsible entity”.

An invitation to invest in the AAF still appears on Addwealth Financial Services’ website.