A small Auckland-based superannuation scheme aimed at UK pension transfers has frozen after its eco-friendly investments turned nasty.
According to its latest financial accounts, the GBP International super fund suspended all redemptions citing the inability to “access the valuation” of the underlying funds managed by Isle of Man-based investment firm the Premier Group.
The GBP scheme has invested most of its $3.18 million in two Premier Group offerings: the New Earth Recycling and Renewable Energy product; and, the EcoEarth Resources fund.
Both products have suspended withdrawals with the New Earth Recycling fund shuttering last January and the bamboo-based EcoEarth Resources investment scheme, which represents over 70 per cent of GBP International assets, freezing this June.
The EcoEarth Resources fund put withdrawals on hold in June “due to an unexpected increase in the number of redemption requests”, an investor update says.
Meanwhile, on October 8 this year, the New Earth Recycling and Renewable Energy fund told shareholders it had transferred ownership of its UK renewable energy assets to Macquarie and another institutional investor in exchange for debt cancellation. The fund was exploring options to continue as a “stand-alone waste business”, the New Earth letter says.
In the interim “the directors are unable to provide any indicative value for investors”, the New Earth note says.
“Due to the suspensions of redemptions mentioned above, the scheme has placed a temporary suspension on all members redemptions,” the GBP scheme accounts say. “The trustee is uncertain when the scheme will be able to lift this suspension, as [it] is reliant upon the lifting of redemption suspensions on at least one of the underlying investments…”
Tony Chamberlain, GBP International co-director, said the scheme prospectus had been withdrawn.
“I’m not at liberty to give any further information,” Chamberlain said.
He said the GBP scheme was unrelated to his advisory business GBPensions (Great British Pensions).
“I’ve never invested any of my advisory clients [into GBP International]. We don’t have an agency agreement with the scheme and we never have had one,” Chamberlain said. “My advisory business just happens to have a similar name.”
He referred further questions to fellow GBP International director, Antony Brokenshire. Brokenshire is also listed as director and 33 per cent shareholder of Great British Pensions, however, he doesn’t currently appear on the group’s website.
Brokenshire had not returned a call to Investment News NZ prior to press-time.
Regardless of its trading status in NZ, GBP International remains on the shrinking list of Qualifying Registered Overseas Pension Schemes (QROPS) published by the UK tax department.
The latest QROPS list names 31 NZ schemes – down from 34 in June – including 16 ‘SSAS’ funds, which generally have been set up by high net worth individuals for their own pension transfer purposes.
However, Christchurch-based accountancy firm Leech & Partners, which administers most of the SSAS schemes, runs retail pension transfer scheme i-Select – another on the current QROPS list. According to its latest accounts, i-Select reported funds under management of almost $141 million as at March 31 this year, up from $42 million the previous year.
Britannia, probably the largest QROPS-approved provider in NZ, reported funds under management in March this year of more than $460 million across two schemes. The Britannia 2012 scheme grew by almost $140 million over the 12 months to March 31, 2015, reporting a closing balance of just under $240 million.
Britannia invests into a NZ registered fund-of-funds product managed by ASX-listed firm IOOF.
The lucrative UK pensions transfer business has been complicated this year by changes to the QROPS regime that excluded KiwiSaver schemes from the process. While the recent UK tax ruling has stranded some KiwiSavers, including a handful of Smartkiwi members, other NZ-based super schemes have previously been caught out by QROPS regulations.
For example, the $26 million Evergreen Retirement Trust lost its QROPS status in 2012 following concerns about its admin processes. According to the latest Evergreen accounts, the scheme has consequently “needed to manage liquidity on a monthly basis” to meet withdrawals and fund expenses.
Evergreen recently closed two NZ-dollar denominated funds within the scheme due to low balances. The scheme has engaged DLA Piper both in the UK and NZ to resolve the outstanding QROPS issue.
“The matter remains with HMRC [Her Majesty’s Revenue and Customs] for determination,” the March 2015 Evergreen accounts say.
– David Chaplin, Investment News NZ