Investors get 100% capital return on Hubbard Management Fund

The statutory managers of Hubbard Management Fund, one of Allan Hubbard’s failed funds, have repaid 203 investors $35.6 million, representing a 100% return on the capital invested plus a small surplus.

Grant Thornton has now completed its five-year statutory management of the fund, it says in a statement, following an “exhaustive and slow process” because of poor accounting records and non-existent transactions.

Investor statements prepared by Mr Hubbard in 2010 said investors were owed $82.8 million by the fund but Grant Thornton’s own assessment was the fund was only worth $47.7 million.

It says non-existent transactions were recorded in accounting records and on investor statements.

“This poor financial recording had continued over a long period of time, generating statements to investors that were not completely supported by assets.

“Additionally, shares reported as being owned by HMF were not always held in the HMF nominee companies, resulting in complications trying to gain access to the investments.”

The final statutory managers’ report says there were about 300 investors in HMF but only 203 were entitled to payments because the others had already withdrawn more than they had invested.

This followed an “exhaustive and slow” process of restructuring every investor’s records, establishing what the fund actually owned and unravelling related part transactions and loans.

“Providing forecasts of the outcome for investors during the assignment was very difficult.

“There were fluctuating share values and in addition the statutory managers had to investigate numerous claims totalling many millions of dollars from investors and third parties asserting security over HMF assets.”

Grant Thornton says the $35.6 million distributed repays all original capital invested into the fund, and the statutory managers will now apply to have their appointment terminated.

Last September, the statutory management of another of Mr Hubbard’s failed vehicles, Aorangi Securities, concluded, returning $101.2 million to about 400 investors for a return of 99.037 cents in the dollar.

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