ING has announced it will wind down four funds originally worth over NZ$700 million because the crash on sub prime debt markets had wiped out at least NZ$400 million worth of value and investors were desperate to retrieve some cash from the funds. ING said its shareholders had agreed to lend the funds NZ$100 million "to provide investors with some cash immediately." The face value of the units in the funds was NZ$706.1 million, but the value of the funds had now fallen to NZ$308.9 million. The funds being wound up include the ING Diversified Yield Fund (DYF) with 427 million $1 units now worth NZ$189.2 million or 40.8 cents per unit and the ING Regular Income Fund (RIF) with 232 million $1 units worth NZ$84.3 million or 33.4 cents per unit. Withdrawals from these funds were suspended in March, causing anger among many investors put into the funds by ANZ financial advisors. ANZ owns 49% of ING. Both of these funds were heavily exposed to the Collateralised Debt Obligations (CDOs) that have collapsed during the Credit Crunch. The other two funds being wound up included the Credit Opportunities Fund with 19.3 million $1 units now worth NZ$7.5 million or 38.9 cents per unit and the Enhanced Yield Fund with 27.8 million $1 units now worth NZ$27.9 million or $1 per unit. "Investors have told us they would like to see a path out of suspension for these funds," ING New Zealand CEO Helen Troup said. "While we can't control the markets or change what has happened to date, we are looking to provide an alternative that would give investors clear direction going forward as well as access to some of their money in the short term," Troup said. ING said that the non-recourse loan would be made available to the funds at favourable commercial terms, and would have to be paid back before the cash generated through the wind up would be returned to investors. ING said a unitholder meeting would be held before 31 March 2009 where unitholders would be asked to approve changes to the Funds' trust deeds to allow this managed wind up to occur. "Both ING and the Trustee recognise the significance of this decision which has only been reached after careful consideration of the situation," Troup said. "Severe deterioration of market conditions during October and November has necessitated taking action on these two funds now to protect the interests of investors."
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