A new website called Trademyunits.co.nz has been set up to allow as many as 24,690 investors in over NZ$1.77 billion worth of frozen mortgage funds and unit trusts to sell their units to fund managers and investors willing to wait for the mortgage fund market to thaw and reopen.
Martin Cleland-Pottie and Asher Hastings of Phoenix Capital Management set up the website and will take a commission of up to 2% of every trade. They are also looking at exporting the model to Australia where over A$25 billion worth of investments in mortgage trusts and funds has been frozen since the introduction of the bank deposit guarantee scheme there.
The decision by Guardian Trust to close its NZ$160 million CashPlus fund for 35 days while it splits off its mortgage units into a separate frozen fund reinforces the decision.
Our 'Deep Freeze' list shows that the funds listed on trademyunits.co.nz , have NZ$1.77 billion frozen in 24,690 accounts. The funds able to be traded on the site include AMP Capital Property Fund (NZ$419 million), AXA Mortgage Backed Bonds Fund (NZ$117 million), the AXA Mortgage Distribution Fund, the AXA Mortgage Fund, the AXA Mortgage Investment Fund with NZ$225 million), the Guardian Mortgage Fund (NZ$249 million), the ING Diversified Yield Fund and ING Regular Income Fund (NZ$520 million) and the Tower Mortgage Fund (NZ$242 million).
"We have tried to develop a solution that is sensitive to the situation of many unit holders, providing those with an urgent need for liquidity with the option to sell at what will hopefully be a small discount to the original investment value," said Phoenix Principal Asher Hastings.
"Given the high quality of the assets in many of the funds traded, we expect that the market will ensure the discount is not too significant."
Phoenix have appointed Perpetual Trust as the corporate trustee for the operation.
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