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07 Mar 2012 00:00 by dumbbunny Star rating in Spain. 10 posts Send private message

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Has anybody ever heard of a company called ''LM Australia'' currently offering up to 9% pa interest, Euro or £s, not guaranteed rates and not guaranteed capital secure, but boast 10 year track record of paying similar rates with never any capital loss.

This is nearly triple secure bank deposit rates. Hard to beleive. Is this one of those Ponzi scam things?

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07 Mar 2012 13:58 by ojosazul88 Star rating. 171 posts Send private message

Hi, Yes i know of the fund . It does not offer 9% as you say but 6.5% sterling or Euro. Secondly LM are a very large and reputable Australian fund manager so this is not a "Ponzi" as you describe. It is an investment but the fund has been running for over 10 years and whilst is deemed as low risk still must be realised is not guaranteed return. However the fund has not deviated from its published rates in the last 10 years.

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07 Mar 2012 14:51 by dumbbunny Star rating in Spain. 10 posts Send private message

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Just a minute ojosazul88 I did not discribe it as a Ponsi scheme, I just asked.

And according to LM Australia website today, rates are 9% pa for a 5 year term Sterling or Euro. Rates are slightly lower for shorter terms. Am I right or not? Thanks for the rest of the info, sounds a decent deal.

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07 Mar 2012 16:47 by Bri Star rating in North. 591 posts Send private message

 Well I would be careful.  Just because funds have performed well over the past ten years does not mean they will in the future.  A change of manager or anything could mean in a very quick downturn.  Regard it as any investment that is not guaranteed - it is a high risk, and you may not get your money back in the end.  If you are young and can sit out any downturn - fine.   But if you are likely to need it in the near future, you may be disappointed.    I don't know this fund, but I can reel off many fantastically performing funds that had as the main attraction a good track record - and the took a severe dip.  The trick in making money from funds is to find one that is just about to perform well rather than one that might have run its course.



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07 Mar 2012 17:05 by ojosazul88 Star rating. 171 posts Send private message

Dumbbunny , I appreciate you didnt say it was a Ponzi, but you did use the word implying it could be solely because the returns seem too good. Their 5 year rate maybe 9% but thats a long time to tie money up, the 6.5% rate is based on a 1 year period which is much better. As Bri says nothing is guaranteed as its still an investment so a good regulated financial advisor is a good option too, thats how i know about this fund. You still have to be comfortable that this type of investment is for you but when you delve deeper as i did, LM have a solid base in Australia, Good luck.


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07 Mar 2012 17:41 by dumbbunny Star rating in Spain. 10 posts Send private message

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Hi Bri & ojosazul88 thanks guys you are being so helpfull. But I am now getting a bit confused, Bri say High Risk, ojosazu says Low Risk. I know it has risks, according to LM Australia it is discribed as very low risk, and all the fund is secured on low loan to value on commercial property in Australia, whatever that means. I suppose, taking a bit of a stupid veiw, if Iran bombed Australia then it might be a bit of a loser.

Its just that 2% at best out of Lloyds or Barclays is just wasting my money away. Yes, the capital is safe, but with prices going up like they are, I'm going to end up skint.

According to LM Australia they have been paying these interest rates for the last 10 years, all the way through the resession, and puting it bluntly, Australia is thriving, with bank base rates at over 4.00% whilst Europe is on it's knee's.

Am I right or wrong in thinking, if you are going to take some sort of investment risk to beat the auwfull bank rates, LM Australia is about as good as it gets, without having a crystal ball.

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07 Mar 2012 19:13 by Bri Star rating in North. 591 posts Send private message

 Well, I do know what you mean about the low rates at the moment, but I would still spread it around.   Just put what you are comfortable with, and then be prepared for it not to perform as well over the next ten years as over the last.  Same can be said for anything.   I am tempted by Brazil at the moment, but I have been burned by emerging markets in the past (because they did not emerge as expected!!!).    Australia has its problems, and these could get worse in the next 10 years.   Personally, I just keep coming round to property, but not as an investment in Spain!!  Spread it around. 



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07 Mar 2012 19:22 by ojosazul88 Star rating. 171 posts Send private message

 Dumbbunny, i think Bri was talking about other investments as being high risk as he says he doesnt know the LM one.

I would consider the LM fund you are talking about as lower risk due to the fact they have a low debt ratio on their loans, you are right, they loan money to large commercial developers in Australia. Theres always that thought that whenever you put your own money in,things will suddenly go wrong!, which is why maybe dont commit too much and see how things go after a few months.

The other choice is to leave it in the bank and let it lose value due to inflation! 

If you want to PM me i can pass you on the details of the financial advisor i used here in Spain, they are regulated as they have offices in the UK.

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07 Mar 2012 21:18 by mikelord Star rating in Roda. 148 posts Send private message

Has anyone had any experience of the Sporting Arbitrage "scheme". Offering over 2% PER MONTH!!


Michael Lord


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08 Mar 2012 01:22 by ojosazul88 Star rating. 171 posts Send private message

 Just Google Arbitrage and you will find thousands of companies that have offered these types of claims and investments over the years,most have come and gone. Arbitrage in its current form is simply trading on the betting exchanges ie Betfair, yes maybe a bit of fun with a small amount of money but a serious investment, no way!, In fact Bernie Madoff started his investment company based on arbitrage methods!!, not that all arbitrage investment is a ponzi scheme!

Below is a quote from an expert on arbitrage.

The law of arbitrage is that opportunities only exist for a short time. After they are over, the arbitreurs have "proof" that their system works and they try to sell it. What they don't tell you is that it doesn't work anymore, at least not in any significant profit margin.

 The worse the economic times are, the more you will see claims of great returns on your money.


This message was last edited by ojosazul88 on 08/03/2012.

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08 Mar 2012 14:35 by rod Star rating in Uk and Spain. 469 posts Send private message

I would not classify this as a low risk investment because you are subject to currency risk as a non AUS investor, and all its assets are backed by one asset class ,of course the classic example of a catastrophic failure  was Lehmans who were LARGELY exposed to Mortgage backed securities, it may also have liquidity issues much the same as CRU had if indigineous housing prices fall and investors run to withdraw.

However as part of a divesified portfolio it could blend well there are 32000 funds avaiable SICAVS UCITS UCIS etc I have no been able to verify the performance via ANALYTICS so if you are thinking of INVESTING take ADVICE from a proffesional you cannot buy DIRECT anyway it seems

The AUS financial services are very regulated and may well be covered on compensation rules



This message was last edited by rod on 08/03/2012.

This message was last edited by rod on 08/03/2012.

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08 Mar 2012 15:47 by rod Star rating in Uk and Spain. 469 posts Send private message

I have just DELVED  a little deeper it does have LIQUIDITY problems and they are applying DEFERALS



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08 Mar 2012 16:47 by ojosazul88 Star rating. 171 posts Send private message

 First we had the LM fund described as a possible "Ponzi", Now Rod you are implying it could be another "Lehmans " situation with this fund, what evidence have you uncovered to back this up? Im assuming youre a qualified financial advisor with specific experience of LM Australian funds?

They also use forward foreign exchange contracts to limit currency exchange risks, 


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08 Mar 2012 17:03 by dumbbunny Star rating in Spain. 10 posts Send private message

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Thanks Rod. This bit about currency risk I do not fully understand. According to LM Australia, investments are currency protected by forward edging, what ever that means. Can you explain.

However if LM Australia have serious liquidity problems as you say they have and can not pay any investers a penny, it sounds like thier bankrupt and skint.

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08 Mar 2012 17:18 by rod Star rating in Uk and Spain. 469 posts Send private message

if you read the Portfolio UPDATE 31/01/2012 page 2 second to LAST paragraph its there regarding LIQUIDITY issues it is now facing I have seen this many TIMES before and the results are usually BAD

I AM A fully qualified FINANCIAL ADVISER and have been for 20 years in ANSWER to your question

I would NOT recommend this FUND to clients it is too FOCUSED with 17 MORTGAGES at an average value of 17 MILLION if ONE defaults IT COULD pop.

IT is also very expensive the highest MANAGEMENT FEES on a property fund I have ENCOUNTERED.

LOOK go for it if you want too but I WOULD NOT put my OWN money into it LET ALONE MY clients


This may also impact as 60% OF THE ASSETS ARE IN THIS REGION http://www.bbc.co.uk/news/world-asia-pacific-12102126



This message was last edited by rod on 08/03/2012.

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09 Mar 2012 07:48 by dumbbunny Star rating in Spain. 10 posts Send private message

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Hi Rod, thanks for all your advice and help. As my name sugests I am a bit thick. Putting it bluntly, if I put £100,000 in for 1 year at 6% and get back into my bank account £106,000 which is what they are supposed to be saying, what does it matter about manegment fees or currency exchanges. Or are they telling us all a pack of lies.

With regard to their liquidity statement, yes that does look odd to say the least, who in their right mind would invest into a company who upfront are saying they cannot pay. I have sent them an email (using my cats name, a bit like that Harry Redcrap) asking them to explain and if their target audience is in Rampton.

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09 Mar 2012 10:31 by Ojosazul88 Star rating. 171 posts Send private message

Dumbbunny, with the greatest of respect, As mentioned in previous posts, take independant financial advice because the LM fund is one of a few to consider rather than "putting all your eggs in one basket". Saying that, i believe Rod is totally wrong in his assessment of the LM fund and has shown naivety in his analysis of the Australian economy and flood recovery in Queensland.

Like many funds they have defenses in place like slower pay outs to clients in difficult economic periods to protect the fund, this is normal, it doesnt mean they are bankrupt! In fact, in the last 10 years i have seen the fund has delivered consistant results which is why i went ahead. Good luck.



This message was last edited by Ojosazul88 on 09/03/2012.

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09 Mar 2012 10:48 by Ojosazul88 Star rating. 171 posts Send private message

Dumbbunny, one thing i forgot to add, Rod has included an article that is 14 months old!  That really concerns me, 14 months old and this is meant to be part of the argument against the LM fund. The state of Queensland is over 14 times the size of the UK(Australia is a big place!)  so not everywhere was affected and i believe none of their property assets were affected by the floods!


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09 Mar 2012 11:19 by Bri Star rating in North. 591 posts Send private message

 The management fee will be taken straight off your investment meaning less than the 100000K invested, meaning less than the 106000K return - presumably before any taxes.  Unless you have several milions to invest - and good luck if you have - 100000K is too much to put in one pot.  That is just my view and how I manage my own non property investments. 



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09 Mar 2012 12:06 by dumbbunny Star rating in Spain. 10 posts Send private message

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Sorry Bri I think you are wrong. Please explain where you have gained that information.

According to my research, the management fees are  charged and taken out of the fund. The rates on offer are net of all charges and management fees. Plus the rate is net of 10% Australian withholding tax. So 100 in, 106 out.

Thanks Ojosazul88 yes I clicked on that link, 14 months old, seems a long time ago, not relevent today.

Also on the liquidity subject of LM. I have been very reliably informed, that deferals on investors returns are common practice througout Australia on investments where the fund is property based. And that certain comments on here have been quoted completly out of context. The paragraph refered to in LM statement of facts, is industry norm as laid down by the Australian Goverment.

Whilst there may be differences of opinion, and sometimes misleading comments on this forum subject, at least I think we are getting nearer the truth. That can only be a good thing. Better to find out now, than after I have put money in.

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