We “parked” our short-term house deposit through Vestar, persuaded to believe they could achieve much better returns than we were receiving, at similarly low risk. Of the seven companies Vestar invested us into, six were finance companies. All six are now in receivership or default…

• Bridgecorp
• Capital+Merchant
• Boston Finance (a subsidiary of Vestar owner MFS/Octaviar)
• MFS Pacific Finance (also a subsidiary of Vestar owner MFS)
• PropertyFinance Securities
• St Laurence

Because it was our house deposit which we needed to access in late 2008, we were short-term, ultra-conservative, risk-averse investors and briefed Vestar accordingly. Why was most of our money put into dodgy finance companies?

I am told that some of the finance companies, Bridgecorp being a prime example, paid significantly higher commissions to financial planners than rock-solid ones like Marac and South Canterbury Finance – neither of which Vestar recommended. I wonder why?

Perhaps the biggest shock was learning that Vestar had commissioned a ratings agency report for Boston Finance in 2005, then quietly shelved the report when Boston failed the evaluation. The report gave Boston a dismal one-and-a-half-star rating, far below the three stars necessary for investment grade. (Source: NBR. Read the story here.)

I also subsequently discovered that MFS Pacific Finance was C-rated by Chris Lee, and Bridgecorp, C+M and Boston were E-rated (on a scale of A to E). Chris Lee doesn’t advise investing in anything lower than B- but Vestar were obviously happy to go right down to E… junk bond status.

Vestar, Boston and MFS Pacific are inter-related companies. Boston failed a ratings agency report commissioned by Vestar and was E-rated (junk bond status) by Chris Lee. Vestar’s response? Keep the report quiet, discredit Chris Lee (our advisor did anyway), and keep pumping investors’ money into Boston. A case for legal action surely?

Time will tell whether it was Vestar’s greed, incompetence, or just bad luck. Either way, most of our house deposit seems to have gone up in smoke and we are ANGRY!

Angry enough to do something about it. Unless people like us speak up and take action, nothing will change. So we joined EUFA and helped them launch this blog.

Our mission…

• To act as a focal point for disaffected clients of Vestar.
• To disseminate news and information that will help you prepare a case against Vestar.
• To tell the stories of those Vestar clients who have lost their hard-earned savings.
• To expose any examples of wrongdoing.
• To liaise with others who might help our cause.

If you are a disaffected Vestar client, you are not alone. You don’t have to suffer in silence and shame. You CAN do something…

Sign up in the upper right hand corner of this page. The form only asks for two items of information – your name and your email address. You can enter just your first name if you like. You must enter your real email address. We’ll be sending you future passwords by email, so if you don’t enter a real email address, you won’t get them.

Welcome aboard!