OZschwitz: Shareholders queue up to cash out of Packer's incompetent fund

THE Midas touch of the late Kerry Packer hasn't passed to his son, with James Packer's hedge fund Ellerston GEMS airing plans to delist from the sharemarket after a woeful performance in its maiden year.

Its chief executive, Glenn Poswell, yesterday proposed a scheme whereby shareholders will be able cash out, but most will have to wait for a year or more and pay a redemption fee.

Many wish to get their money out now with fund managers warning that the credit crunch is going to get worse.

Ellerston Capital, which manages the fund, manages a further $800 million of the Packer family funds. The fund is named after Mr Packer's polo and golfing estate in the Hunter Valley, and promotes itself as giving people a chance to invest alongside Mr Packer and profit from the investment strategies used by his private family company, Consolidated Press Holdings.

The fund has traded below its listing price of $2.50 throughout the past year, closing at $1.78 on Thursday, before the delisting proposal was announced.

As the unit price sank in recent months, Mr Packer's private investment company soaked up stock, increasing his stake to 14 per cent from 8 per cent. Under the proposal, shareholders who wish to take their money before 2010 will only be paid 92.5 per cent of the net asset value of their share at the time.

Shareholders had hoped to get as much as $2.33 for each share - the net asset value at the end of July. But under the proposal they are likely to get $2.15 at most.

The alternative is to sell on market, but the shares closed at $1.98 yesterday.

Mr Poswell described the delisting as "an amazing initiative" and said all the "core unit holders are backing us".

"This is a win-win proposal for unit holders to unlock value now compared with the price the market has been prepared to trade their units," he said.

But one shareholder, John Dalley, who had been agitating for a winding up of the fund, said the "drip-feed is an insult".

Only 10 per cent of the value of the $576 million fund can be cashed in this year. The rest will receive a part-redemption or must wait until next year when a further 50 per cent of the fund will be allowed to cash in.

Mr Powell said investors since the listing including David Baffsky, of the French hotel group Accor, and the former ANZ chief executive John Macfarlane.

Mr Dalley said he was confident he would get enough support to call a meeting and request a wind-up of the fund.

"It's our money, we are shareholders and we want our money back," he said.

Mr Dalley is pushing for shareholders to get access to the $115 million in cash in the fund as soon as possible. "You only get the full amount if you stay until 2010," he said. "To me that is pathetic."

LNK

OZschwitz: Shareholders queue up to cash out of Packer's incompetent fund

OZschwitz: Shareholders queue up to cash out of Packer's incompetent fund

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