Auckland Mortgage Trust General Manager Bruce Rasmussen said the trust expects to get back most, if not all of its 550 investors' NZ$47.5 million capital following approval for the wind down of the fund.

Trustees Executors gave their approval to the request to wind down the fund at the end of May, but Rasmussen said that they had effectively been winding down the fund since the credit crunch in August 2007. The fund was initially frozen for 90 days on February 27, 2009.

Rasmussen said the decision to wind down the fund came as the market became too difficult to read. He said that it was hard to say how long the wind down would take, but it could be between two and three years, given "you're not going to force property sales in this current market." 

About 49% of the fund's lending was on commercial property and almost 20% was on housing. All of its lending was first mortgages, Rasmussen said. He was unable to say how many of the fund's loans were in default, saying the figures were currently with the fund's auditors.

The fund's quarterly returns fell to 6.36% (before tax, after fees and expenses) in the December quarter, from 8.75% in the September quarter and 9% in the June quarter of 2008.

Other mortgage funds that have been frozen and are being wound down are ones run by Axa, Tower, Guardian Trust and Canterbury Mortgage Trust. For more, see our Deep Freeze List.