Investors in the frozen Hubbard Management Funds have been paid out $9 million, the first distribution since the investment vehicle was frozen in 2010.
Statutory managers Trevor Thornton, Richard Simpson and Graeme McGlinn of Grant Thornton New Zealand will pay up to $12 million to investors after receiving High Court approval for the first distribution.
Between March 1 and March 23 the statutory managers sold $6.5 million of investments, and more stock will be divested this week to fund the rest of the pay-out. The court is still calculating the fairest way to determine how the funds are allocated, with a hearing scheduled for May 21 and May 22.
We have carefully selected and sold shares held by HMF to provide the cash for this first pay-out,” McGlinn said in a statement. “No shares have been sold at less than the current market price, and we have timed the sales so as not to depress those prices.”
Before the distribution on Friday, the fund’s portfolio was valued at some $43 million, compared to the $89 million recorded in March 2010.
“This is due to fund discrepancies and a general decline in the share markets over the last two years,” McGlinn said.
Grant Thornton has charged $1.6 million in fees and disbursements since taking on the statutory management, and the process has incurred $930,000 in legal fees, $703,000 in other third-party disbursements and $475,000 in GST.
The late Allan Hubbard’s management fee of between 1 percent and 1.5 percent would equate to between $1.12 million and $1.68 million, the report said.
The Ministry of Economic Development has appointed an independent party to review the fees after the statutory managers requested one in December.
The statutory managers didn’t release their report into another frozen Hubbard vehicle, Aorangi Securities, at the same time as the HMF report, as they have done previously.