Update on Structured Investments

A message from Peter Spann

Hello,

I promised you an update at the end of March about our progress with structured investments and I have good news to report. 

We have been working hard with Macquarie for months to resolve the issue of cash locked investments and last week I believe this culminated in a breakthrough which has made the hundreds of hours we have put into this worthwhile. 

There are no magic wands but I think we have found a way to get the funds out of cash and reinvested in the markets so that you have some chance to recover the cost of the investments and create the possibility of a capital gain - without any further out of pocket espenses for you.

Capital protected products did their job of protecting investors from significant loss during the down turn with most being between 9% and 24% down when the market itself dropped more than 50%.     

While the possibility of a simultaneous fall of the market and a dramatic lowering of interest rates (which meant more and more of the investment had to go to cash) was a risk, it was an extremely remote possibility at the time of the inception of the funds.   Whilst the global financial crisis has created this, and many other, highly unexpected outcomes it has also created opportunities for investors that are willing to stay the course by gaining exposure to equity markets at current levels with a longer term view.

We have built a very good relationship with Macquarie and we have made substantial progress on the structured product front.  We are poised to announce the results of this work to you. Our solution is exclusive to Freeman Fox clients and I am very pleased with how it is shaping up.  Macquarie is also releasing an alternative to all Fusion investors but I suggest you wait until you see our solution to compare each to make up your mind.  Stay tuned in the next couple of weeks for our next announcement.

You may remember from my last update that we have been endeavouring to achieve three key outcomes in our discussions:

1. To be able to "re-set" investments at current market prices;

2. To ameliorate cash flow issues;

and ultimately work towards...

3. A return on investment

We are now working with Macquarie to finalise the PDS for a new investment vehicle that delivers on these objectives.  There are changes to the underlying investments and some important features and benefits and risks so it will be important for you to review a new PDS.  You can appreciate the effort that goes into actually writing one of these extensive documents, however we anticipate having it completed and available by the end of April so you can consider it well before the end of this financial year when your next interest payment is due. 

We believe that we are all now in a position to see "the light at the end of the tunnel" and this would not have been possible without the hard work and dedication of our team of people and the loyalty and enthusiasm from the vast majority of our clients. 

On a personal note this has been a tough year for all of us but I am very grateful to you, our fabulous clients for your loyalty and support, and I admire greatly your aspirations, hard work, productive qualities and stoicism in the face of the global financial crisis.  We enjoy working with you and we are proud to serve you.  Thank you for working with us on this. 

If you have any questions or we can help in any way please call my team on 1800 000 369.

Sincerely

Peter Spann