Fifth AIB Belfry Fund

Discussion in 'Financial campaigns and consultations' started by yddaphslaw, 20 Aug 2013.

  1. yddaphslaw

    yddaphslaw Frequent Poster

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    I would like to get in contact with other unfortunate investors in the Fifth Belfry Fund. The fund is now worthless - losing €66.5m of investors capital!

    Update: June 2014

    Paddy Walsh is chairman of the Belfry Investors Action Group

    086-2601326

    paddywalsh3@gmail.com


    and they have retained a solicitor Tom Casey
     
  2. scaraveen7

    scaraveen7 Registered User

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    Hi,
    I am also a loser in AIB Belfry Funds both 4 and 5 UK property. Any suggestions?
     
  3. col

    col Frequent Poster

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    Yes unfortunately I am in this as well. Really was a poor investment and I got poor advice but I accept it was my own fault. Would never have invested if I understood the downside risks. I assumed if the property lost 20% of its value I would be down 20% on my investment, didn't expect to be completely wiped out or that the fund was so highly leveraged. Whats that saying " A fool and his money are soon parted". Well that was me at that time encouraged by a lot of hard selling from our friendly bankers.
     
  4. mercman

    mercman Guest

    Please try and

    I'm caught in another of their funds and it appears that the property managers the AIB were using were useless. Headless chickens would have done a better job.

    Personally, if in the case of Belfry and other UK funds controlled by the AIB, I do believe a case for commonality of immoral destruction of investor funds could be taken.

    There are laws in the Investment world, and regardless of the market going pear shaped, there are a lot of entities and people known to the Bank and part of that have milked the whole system to their own greed.
     
  5. Rory Gillen

    Rory Gillen Frequent Poster

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    Your issues with these property funds must reverberate around Ireland. Even worse was where banks (and others) sold product with leverage outside the fund which has led to true hardship for many. Yes some people over-reached, some got greedy but a huge number simply didn't have the experience to understand the downside. A point I made in my own book several times is that there is no place for debt in investing, unless you have deep pockets. That should rule out investing in property for the vast majority. Instead, you have the safer option of buying property companies listed on stock markets or a property ETF which provides diversification for those investors not equiped to select individual companies.

    It is my opinion that banks should not be allowed sell investment products, as clearly they cannot offer independent advice. To subscribers of my own website, I have often used the phrase 'sellers masquerading as advisors' to describe (private client) stockbrokers and the term applies equally to the banks. The concept of a bank looking into your deposit account and calling you with the latest hottest product is not just frightening; in my view it is mis-selling.

    My advice to all private investors is to avoid new product offerings, guaranteed funds and the vast majority of structured products like the plague. They exist to reward the seller/promoter and rarely deliver the returns that are on offer in markets. There is nothing a 100% guarantee can offer you that a 50% allocation to equities and 50% to bank deposits can't achieve for you over the vast majority of 5-year horizons, and with no costs. I outlined the logic of this in an article on my own website in July 2011: the article is accessible to non-members using the enclosed link.

    http://www.gillenmarkets.com/featur...roducts-a-waste-of-money-most-of-the-time.cfm

    It is my strongly held view that investment products should not carry upfront commissions, as it means the seller and buyer have conflicting goals. The UK came to this conclusion in 2009 when the RDR review was published. Upfront commissions to sellers, they concluded, were at the root of every selling scandal in the UK financial services industry going back decades. So they have banned upfront commissions. I applaud that move.

    Every fund you could conceivably want is already listed on a stock market with no selling costs attached for the simple reason that they already exist and don't need to be sold. What private investors need, I believe, is someone to guide them to appropriate funds. For example, there are over 350 investment trusts listed on the London Stock Exchange alone, covering all the asset classes and geographic regions. For those who prefer passive funds, ETFs are easy and cheap to invest in.

    Without better guidelines from the Regulator as to what constitutes advice and who can provide it, sadly I can see no change on the horizon. My own conclusion is that private investors are very poorly served by the financial services industry. It need not be that way and I lay the blame squarely at the Regulator, which is the only institution with the power to change things.

    Brendan has often touted the idea of putting a committee together to approach the Central Bank on these issues. I would be happy to play my part on any such committee in formulating a paper for the central bank to consider.
     
  6. mercman

    mercman Guest

    This is one of the best and most truthful posts ever written on AAM. In the times we live in and what we were in and where many are going, important lessons must be learned. Hindsight is a major factor. Foresight needs to be heeded and thought about.
     
  7. Monksfield

    Monksfield Frequent Poster

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    Agree with Mercman - absolutely correct Rory, every line.

    Which bit of this does the Regulator not see? The cynic in me can only conclude that the power of the vested interests is keeping the door shut.

    Lot of people caught up in those Belfry funds - was engaged by a disgruntled investor to look into one of the funds last year.
     
  8. mercman

    mercman Guest

    Tell me more about this. PM me if you wish.

    I'm involved in another AIB one named Portman S A, about to go pear shaped.

    It appears the common denominator in all the failed AIB property funds is the Managers of all. |There really is little point in blaming the market for the wipe outs, where the Managers have not got a clue what they are doing.
     
  9. Olivetti

    Olivetti Frequent Poster

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    Geared Property Funds

    Another +1 for Rory's comment.

    I don't think you can single out AIB's property managers, Mercman, when we have reports on AAM and elsewhere of a litany of other firms offering similar products with the same results - BOI, Anglo, Irish Life, Oregan, CHC, and countless others.

    It is a flawed concept, poorly understood and sold, and brought to market with the worst possible timing, rather than poor property management by AIB, I would have thought.
     
  10. Olivetti

    Olivetti Frequent Poster

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    22
    Geared Property Funds - PS

    In particular, col's comment above that he didn't realise his investment could be wiped out is a savage indictment of the sales process, and/or how much attention he paid to it. That's geared property 101 as they'd say in the States - the most basic principle of all that you need to get across to any potential investor!
     
  11. Monksfield

    Monksfield Frequent Poster

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    105
    Was over a year ago and have looked at several cases since - a certain 'blurring' occurs after a while and as I clock up the years.

    The 6 years was up in terms of going to the FSO which was what my client wanted to do - there was no point going further with the exercise. Interestingly he had other AIB-related property investments one of which was the Portman which Mercman mentions. Obviously valued AIB clients were shown all the good deals!

    In terms of going the legal route the eagles seem to have different opinions since the appeals involving the ACC Solid World bond. As far as I can remember there was a subsequent restructuring of the Belfry fund which my client believed had been prejudicial to the interests of the investors - that could restart the 6 year clock.

    As I recall it the Belfry funds were not wrapped by a life policy so were outside the scope of financial regulation. That means that suitability cannot be a grounds for seeking redress.

    Unless the investment proposition was misrepresented or there was negligence in managing the investment I cannot see a basis for seeking legal redress - incompetence will not be enough.

    The question of gearing and how it was explained keeps rearing its head in cases I see:it was rarely covered properly in the documentation. This is especially so in relation to the possibility of the bank taking control and forcing a sale, which was rarely mentioned. I think we are going to see this as central issue in future cases.
     
  12. yddaphslaw

    yddaphslaw Frequent Poster

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    We can all stand back and wring our hands on how we lost our €66.5m equity in Belfry 5 - the trick is to take action. The cavalier attitude of the AIB staff member who advised that my €100k was wiped really infuriated me. I lodged a complaint with AIB and within a very short few days they sent me a "Final Response" letter washing their hands of the issue. I am drafting a response as I write!

    As with COL I had no idea that I could lose my entire investment.

    Lets examine exactly how AIB sold me this product. My friendly manager, knowing my financial status, advises me that this new "product" offering is shortly closing! Of course the first question that I ask is on past performance on similar earlier funds. I get a very positive response! So naturally I'm interested - the fund expects to deliver 80% on top of my investment over a 5 - 7 year period. He then rub my ego by inviting me to talk to AIB's "Private Clients" advisor, their "Wealth Manager".

    So I read the prospectus - noting their "past returns are no guarantee of future performance" bit - and I'm told that that's just a catch all. Point is that I invested and we ALL invested due to past performance - what other criterion could we base our investment on?. That's how they sell it. They don't ever tell you that you could lose all your cash! Then to further cover their ass thay call it a "high risk"
    investment - high risk delivering 7% pa to the investor - doesn't really compute does it! If they proposed 15%-20% that would communicate high risk to me!

    So I write to the Directors at Belfry c/o BDO asking for an EGM - so that ALL investors can ask the appropiate questions. I'm told that apparantly I'm the only one seeking an open meeting - they will talk to me privately!

    So I've spoken to a solicitor with a view to holding a meeting with him and eventually with a group of other investors. If anyone out there is interested in forming a group drop me a note on paddywalsh3@gmail.com. If we communicate together we have much better chance of getting some or all of our money back!
     
  13. mercman

    mercman Guest

    If I might interject on this. I know your feelings and how bruised and battered we all are. I'm in an AIB property scheme and by god does it stink to high hell.

    However next week, I am due to meet solicitors in relation to other cases with different Banks. They are a good firm as they have already acted for me and they know what they are doing as well as using the correct barrister for the precise job.

    If anybody would like me to mention this (Belfry Fund) and check if the firm is amenable to representing them, I will do just that

    And FOR THE FUTURE, from a trust worthy batter and bruised investor, keep your Investments separate from Banks. Let Banks do what they should -- lend money. Investments are sold and run by professionals -- a category the Irish Banks and Bankers are certainly not.

    Simply I say to Investors, you have nothing to be embarrased about. You all have done nothing wrong, but acted in Good faith. Give these people a run, as it's your money they have flushed away.
     
  14. yddaphslaw

    yddaphslaw Frequent Poster

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    Hi Mercman, any chance you might call me on 086-2601326 to discuss further?
     
  15. Jim2007

    Jim2007 Frequent Poster

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    Rory I would absolutely agree with you on that there is no place in investing for debt, whoever it would appear that Irish investors have a talent for picking what the rest of us consider high risk asset classes such as property and load up on it and that is just as much a problem as the debt factor.

    It is well known that diversification and asset allocation are two of the most important factors in determining the returns for the typical investor and yet I fail to see any comment coming out of Ireland either from the financial press or anyone else on this! In this respect it is probable worth quoting from a Vanguard report (my underlining):

    As I've pointed out before, had investors in fact constructed a low to medium risk investment portfolio, then even if they did buy the wrong property products, they would still only have lost maybe 10% of their wealth in the worse case! And by now their portfolios would have recovered.
     
  16. yddaphslaw

    yddaphslaw Frequent Poster

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    Does anyone out know how Belfry Funds 1, 2 , 3 , 4 and 6 have performed?

    In refarence to Belfry 5 am I wrong in thinking that although the prospectus stated that this was a high risk investment - the proposed return of 80% return over possibly seven years does not appear to me to be a high risk return.

    Point is AIB/Belfry call this a high risk investment to cover their asses but do not promise to give an appropiate return to the unfortunate equity partners! Any comments?
     
  17. yddaphslaw

    yddaphslaw Frequent Poster

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    There were over 700 investors in Belfry 5 - investing €66.5m in this fund!
    Have they all simply accepted the dictates of the find managers that the cash is gone?

    If we just roll over and accept the banks failure in managing our wealth in a manner which lacks any semplence of fiduciary responsibility maybe we deserve to be treated in this apalling manner! For Gods sake fellow investors stand up to the mark!!! I have the done numbers on Belfry 5 - quite staggering how much they grabbed for their greedy little selves! Happy to share with anyone interested!
     
  18. Jim2007

    Jim2007 Frequent Poster

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    Property - €66.5m under management - only 700 investors: Yes is is high risk, very high risk in fact in my book.

    It is minute even with the best will in the world the managers could not build a portfolio of properties that would allow for sufficient diversification.

    I would be very interested in see some of the sales material on some of these funds and financial advisors write ups if available on the net....
     
  19. mercman

    mercman Guest

    Jim, I don't believe you'll find anything on the web, regarding these funds. It will be down to individual investors holding on to their received reports. There were so many Belfry funds, and the point you made is correct, there was no diversification. These were put together simply for the Bank and their favoured friends to make money from massive fees.
     
  20. Jim2007

    Jim2007 Frequent Poster

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    So it would be more correct to characterise them as join ownership of a couple of buildings than funds..... would that be the case?