No freaking way!

Perhaps some research into the background of those running/managing the Super fund and who they have been associated with/worked for in the past would be warranted here. Who is doing who a favour here?

There is no future for all this development in the Southern Districts - who is going to buy all this land and holiday homes? The Super Fund/NZ Govt will be left carrying the can if they proceed down this track!

This news has to be one of the most scandalous things I have heard of in the last 18 months - I wonder what Bruce Shephard would think of it?

Be interested to see if anyone else is concerned about these developments.

I don't know, perhaps it is bailing out Hanover a bit, however ultimately bailing our hanover, is just helping out those mum and dad investors who were ripped off. If Hanover had waited a few weeks, they would have been covered by the government guarrantee, and they would have had to have been bailed out anyway by the government.

firstly, restricting the Fund to government bonds will not benefit anyone. Matthews comment re extending the Fund to other managers is the best course. Establish a "fund-of-funds" component, which adds diversity and can be very successul. CALPERS as an example. The catch being there are very few quality funds in NZ.

McKennas project was highly leveraged from day one. Which is coming back to bite. He would not even contemplate introducing the Fund unless there was more to this story. I suspect there is.

I disagree with The Bank Managers comment re no future for these developments in the southern lakes. The Queenstown region doesn't have capacity to support population growth. And internationally NZ is only now becoming recognized as a destination, let alone country worth visiting. Although I never supported the project, because it was to be situated immediately adjoining an expanding airport, and was destined to fail, Queenstown was reliant on 5 Mile to help sustain its population growth. This projects demise makes Jacks Point an even more valuable undertaking. Kawarau Falls is a self cotained hotel and conference destination, which is much needed. This project will show up the mediocre standard of accommodation that exists in Queenstown.

Should the Fund underwrite or invest in Kawarau Falls.. it depends on the terms agreed. If they are mandated to invest a portion of capital in higher risk investments, then again contingent on terms, this may be the right project. It certainly couldn't be a better time to take advantage. In saying this if the capital invested is not guaranteed - at an LTV level (30-40c on $1) there are better more risk adverse options out there.

Iain.. Why is McKenna a financial fraudster? Big call that you need to back up.

There's a lot of talk concerning fraud, back handers, people doing favors. Based on what? An article based on speculation with little to no substance.

Why are you all so shocked? Isn't the gameplan all about securing party donations leading into the 2011 elections! I mean come on, give the swine a fair go at porking the system why don't you.
The RBNZ is propping up bankers bonuses and fat profits with state guarantees and cash for crappy mortgage paper swaps, so what's the big difference if the super fund helps out a property developer or three in making millions and millions ?

They would be better to use the super fund money to pay for the completion of the motorway projects. At least the money would remain in NZ and would not have to be borrowed from overseas.
It is a scandal that they would consider loaning to Watson and co. The super fund has lost so much already, at one point it was minus 25%.
It is difficult to have much faith in the concept of saving for the future, if this money had been invested in infrastructure instead of shares we would have all been better off.

The Boston Globe weren't impressed with Queenstown (but that was 2004).

"Up the road in Queenstown, nature is in full flight.

Queenstown advertises itself as "The Adventure Capital of the World," where you can bungy jump, heli-ski, jet-boat, or sky-dive. The confines of the modest town can no longer accommodate the throng of thrill-seekers. Soaring mountains still fringe the lake, but condos are creeping along the shore, a snake of traffic clogs the road into town, and Louis Vuitton has set up shop along with Global Culture, a clothes store.

If your idea of a holiday is a seething mass of cars and people, topped off by a cacophony of helicopters, Queenstown may be for you. Otherwise, it serves only as a warning of the perils of overdevelopment."
http://www.boston.com/travel/articles/2004/11/07/new_zealand_at_a_crossr...

Too right Bank Manager, we can't have the peasants starting to believe they have a right to a share of the cake, can we.

Insanity - doing the same thing over and over and expecting a different outcome.

People are still in make believe land. Super fund and your super is fake and illussion.
There will be no more super within the next 10 years. we just don't have anymore money to pay everybody that's entitled...so you either don't get anymore or you get a pittance adjusted for inflation which wont' buy you a cup of coffee a day.

At least Kevin over the ditch is honest to delay the entitlement after 2012 or something. you think we are not in the same boat or worse ??? There is no hole to dig ourselves out unlike the ozzies.

I lived in Queenstown for 13 years, when Sam (Neal) was saying what a lot of us thought; that unbrideled development would ultimately be the ruination of place. And today people are astounded when I respond to their "What a beautiful place, Don't you miss it?', with a, "I woudn't touch it with YOUR barge pole..." Good luck, Super Fund.

TonyNZ, are you serious? I don't ask the latest Lotto Powerball winner to cut me in on their winnings, and similarly, I wouldn't have any sympathy for the person that spent their last dollar on Lotto tickets queuing up for a hand out....

Crazy just crazy. Greedy porkers at the trough with their piggy mates. Bail out hanover owners and investors, no thanks, they should have known better. If they had read the business section of the herald once in a blue moon for the 2 years previous, they would have known this. Where is personal responsibility. Use the superfund to help them. It makes me want to puke.
Qtown may need some help, but look at Dubai, everything was built and they said the people would come. Huh. At last look property down 40%.
If Key does this, I will have to retire from public life and become a hermit. I wont be able to face society. I voted for the man.

William:

Greedy porkers at the trough with their piggy mates.

Yes. These are the porkers that should be in crates: we'd have a bit of control over them then, plus would at least know they weren't enjoying themselves on our money.

Where is personal responsibility.

It's the welfare state, silly. What did we all expect?

Separate state and economy (my sig from now on I think).

http://www.interest.co.nz/ratesblog/index.php/2008/07/11/henderson-says-...

How much did Fortress Vulture Fund Buy the distressed project for, and how much are they wanting to sell it back to the general public for?
No doubt spinning our very Bankster sympathetic government the well worn yarn about it somehow being in the national interest.
I say the market got them into it, the market can get them out. How about the banks give back some of the profits they have already gained from the now failing loans from freshair that they issued in the first instance.

Given the reputation/record/means of many who contribute to this site, jeremy, I suggest YOU are the one speculating in more ways than you know. Take your own advice and '...provide(d) any accurate and substantiated facts by which to base (your)their opinion."

Janet.. Point to add, you shouldn't comment on peoples reputations, record, or likewise, when you don't have the faintest idea who you're directing your comments too. Let's just say it is more than unlikely that anyone on this post, Bernard included, has more direct knowledge re the specifics surrounding the subject in question.

And of course, you could be a Priddy, but then again I'm only speculating. I do however have a good knowldge of all sorts of projects, going way back before Philip sold the camping ground a few years ago. Ah.... aren't nom de plumes great!

And it's gone all Simon and Garfunkle on us, Andy! The Sounds of Silence....

I guess you only have to ask yourself, TonyNZ; What would (will?) you do if Hanover offers you a swap of your money in the finance company for equity in the Kawarau Falls Station development ( or another) at par. Will you take it? What about at a discount?

"Hanover offers you a swap of your money in the finance company for equity in the Kawarau Falls Station development "

This is a nonsense. If it fails then that means there is no "equity" for Hanover to "offer'. As second mtgee they would be out the back door with nothing left on realisation for them.
Most of you guys have no idea what you are talking about. Its just speculative rubbish.

The wastage at the NZ Super Fund is extreme.

1. Why do they need to be a waterfront plush office over a whole floor spread out miles away from each staff member? They could squeeze 75 or 80% more staff in there.
2. The staff should at least be wealthy in their own lives, before they are hired and decide how to gamble with tax payer's money. Research showed most staff are on the breadline and many are renting their residences.
3. It's a given to them that they have tones of money to play with and wastage is shocking. They even celebrate when they make it through the end of a bad year of losses.
4. They need to look and learn how retired people scrimp, save and spend carefully, for this is the people they are holding the money for, do you think retired people live in waterfront pads with heating blasting, lights on endlessly. No way!!
5. Very few of the staff actually punt any of their own cash into stocks for their own wealth creation in their own life. Perhaps lack of balls to back themselves?
6. The fund should close up shop after loaning all funds to government at 8% for roading and infrastructure. These no need for all the plush ego of a so call strong empowered office, because it isn't at all, its losses money hand over fist. THE FACT THAT THEY WOULD CONSIDER TIPPING 1billion INTO QUEENSTOWN IS ANOTHER BIG LOSS WAITING TO HAPPEN. Over 20 years Queenstown grows fast for 7 years then goes ghostly quiet again in growth. HOW DARE THEY EVEN CONSIDER THIS. Who is lining up their own next jump into another job in property development? It sure smells of this.

Investigation over the whole place is required, the wastage and performance wouldn't wash in a normal corporation, trust me!!!!! Turn the lights off before you do any further erosion to the fund. NZ does need a pack of losers such as these guys playing with serious money. It's not the degrees and references that should be needed to work there, it's the 'Millionaire status at least that should be a prerequisite.

~ They are a pack of Losers

Indeed you will Janet.
Heres how I see iit. BOS intended to roll the first stage funding over to the second stage from settlement proceeds from the first stage.
The buyers of the first stage are now struggling to settle because
a) it was sold offshore and bank funding for offshore buyers has disappeared
b) the valuations have dropped so even a 30% deposit on pp goes no where, even if funding could be got.
c) BOS has had a meltdown and has no cash to fund the second stage until the settlement issues for the first stage is fixed.
So no funding means things stop.
Up to the Receivor what happens now. I'd not like to be second mtgee...
Shame. Its a beautiful development.

Kawarau falls now in receivership. Even at a fire sale price (at todays prices) It would be a brave super fund manager that gets involved in any form of property development at the moment. Who knows where the bottom is.

Putting a value on an unfinished development at this stage of a declining market should be left for the people with the money and skills required.

The sooner that the NZ super fund is put under the control of someone like Gareth Morgan the better we will all sleep at night.

The old saying "the return of your money is more important than the return on your money" should be printed in big bold letters and put on the wall of the NZ fund managers office.

If they want to play roulette let them do it with their own money not everyone elses. In 12 years time I want to collect some super, not collect an old betting slip.

"Good to see it has turned to custard"

What an unbelievable comment. I am sure the familes of the 500 workers employed there think you are a total jerk.