Calling all disaffected Radius investors
By VoV | Radius Properties | Saturday 13th September 2008Vestar pumped a disproportionate amount of investors’ funds into two unlikely “investments” – Radius Properties and Clendon Shopping Centre.
One $400,000 “conservative” portfolio we viewed had 15% of the portfolio allocated to New Zealand Property, which on the face of it seems okay. But well over two thirds of this was in Radius and Clendon. [Why such a disproportionate amount in these two? Is there more to this relationship than meets the eye? If you know anything, leave a comment below or email victims@vov.co.nz in confidence.]
The next biggest allocation was MINT Australia New Zealand Real Estate Investment Trust, an entity associated with the chairman of Vestar’s investment committee, Donal Curtin. A conflict of interest, surely?
Together, these three investments accounted for a whopping 80 per cent of the entire NZ property allocation, with tiny amounts spread across AMP NZ Office Trust, ING Property Trust, National Property Trust and St Laurence Property Development Fund.
Clendon is a high risk property development. Clendon and Radius are both illiquid investments. If you tried to withdraw from these investments you would have discovered they “can only be sold on the secondary market and unfortunately there are no buyers at this time”.
They were entirely inappropriate for conservative investors and now we’re stuck with them whether we like it or not.
Or are we?
Radius is holding an Annual General Meeting at 10:30 a.m. on Tuesday 23 September in the Watermark Room, Sebel Suites, 85-89 Customs Street West, Auckland. Interestingly, the AGM for Clendon Shopping Centre follows immediately afterwards at 11:30 a.m.
Here’s a cunning thought…
If you want out of your Radius investment, would you be interested in throwing your weight behind a resolution for Radius to sell down sufficient assets to repay investors who want to exit Radius?
If we are successful in forcing a resolution, it would be voted on at the AGM. It may or may not have sufficient votes to pass, but we would have brought the matter to a head. And unless we take a stand and make our feelings known, we have no hope of ever getting out.
Please leave a comment below if you are an unwilling Radius investor and let us know if you’re interested in pursuing this further.
And if you have any information on any links between Vestar, Syms or Purvis on the one hand, and Radius and Clendon on the other, please also leave a comment below or email victims@vov.co.nz in confidence.
P.S. Thank you to the investor who sparked this line of thinking. You know who you are.
Sunday 14th September 2008 at 9:50 am
It is my understanding (not verified yet) that Syms was a director of Clendon and that Vestar advisers were instructed by management to place a given percentage of funds with Radius and Clendon. Syms conveniently resigned in June? Shortly before the fertiliser application.
Related party lending is at the crux of the current industry problems. Whilst not illegal it is unethical in Syms case. Hope his Ferrari gives him joy!
Sunday 14th September 2008 at 2:58 pm
Yes, we are an unwilling Radius investor and would dearly love to exit. Has anyone any idea of the unit value at the moment?
Sunday 14th September 2008 at 3:21 pm
Try going to http://www.radiusprop.co.nz
It appears, according to Radius, that Vestar were the cause of the Secondary Market collapsing. Radius intend to get it going again (with Vestar – I hope not). I am not batting for Radius but the site is interesting.
Sunday 14th September 2008 at 4:27 pm
This time last year the directors of Clendon were Tony Hannon, CA Holmes, Jason Maywald and Kelvin Syms.
The directors of Radius were Tony Hannon and CA Holmes.
Another case of sauce for the gander?
Sunday 14th September 2008 at 5:57 pm
Jeepers Creepers
Our family trust portfolios which we have pulled (or should we say jerked) away from Vestar include $55K with Radius and $40K with Clendon. This equates to a whopping 20% of our $530K that is currently either lost, frozen, or in moratorium.
Isn’t life grand?
These bloodsucking leaches were supposed to have our hard earned money in low risk investments and be available pretty much on demand. We do not understand why these types of investments were made in Clendon and Radius around May 2007 from what we can tell, as Vestar knew that we were going to wind everything down over the coming year…
Too late, Vestar pumped our savings into Capital and Merchant, Cymbis, Boston, MFS, St Laurence, Clendon, Radius…
Like we said… isn’t life grand?
Sunday 14th September 2008 at 9:27 pm
In reply to Mike & Lesley:
Thanks for that. I had trawled right through their site previously and missed their letter to investors. For those who’d like to read it, click here.
It all sounds a bit airy fairy to me though. Their letter of 18-Aug states, “We are endeavouring to recreate a secondary market with Vestar and may list the shares on the ‘Unlisted Market’ if appropriate.”
We need something more concrete than that, i.e. a definite plan with a timetable and accountability. I say we proceed with forcing a resolution.
Monday 15th September 2008 at 8:29 am
I am told that Point Properties is the promoter, developer and manager of Clendon.
Companies Office records show that Kelvin Syms and Jason Maywald became directors of Point Properties Holdings Ltd, Point Properties Management Ltd, Point Properties Developments Ltd, and Point Nominees (Clendon) Ltd on the same day in May 2007, and that both resigned as directors in June 2008.
When did Vestar start pumping your money into Clendon? Leave a comment and let me know when it first appeared in your portfolio.
Monday 15th September 2008 at 9:56 am
That would be about May – June 2007
Monday 15th September 2008 at 10:09 am
Ok now – seriously… if these guys are all providing “advice” but are actually pushing all investors into various companies they all own?
There is a clear case conflict of interest and deliberately providing misleading advice to feather their own nest. Malicious behavior for profit.
How come these guys aren’t being investigated for fraud? What do we need to do to get the ball rolling? How many complaints do we need to get someone to look into it?
Monday 15th September 2008 at 10:23 am
My understanding is that under current legislation, it is not illegal to do what they’ve done. This is something that Suzanne Edmonds has been campaigning against. We need stronger laws and strong penalties. We are so far behind other OECD countries in this respect it’s disgusting.
HOWEVER, there are civil remedies. If they have breached their duty of care, or provided misleading or negligent advice, we can initiate a civil case against them. In fact, that’s what the case being prepared by Lawrence Herzog is all about. So don’t worry, they’ll face the music soon.
Monday 15th September 2008 at 11:15 am
I’m so pleased there is now a site for Radius. I too have heard that they are to list them on the Unlisted Market. That may be so but who would want to buy them at the moment?
If we all pooled our shares together isn’t it possible to force Radius to sell their properties and give us our money back? In our portfolio Radius represents quite a percentage of our money which we are getting 0% for.
I would rather we all jump now and grab what we can before another goes under and we end up with 5 cents in the dollar.
I would be interested in hearing from anyone else that would like to join together and force them to sell their properties.
Monday 15th September 2008 at 1:32 pm
We can only echo all the above comments. We were committed by Vestar to Radius and Clendon and had no inkling of the connections between Vestar directors and these companies. Its outrageous that so much of this related company information (see OPI et al) was not specifically disclosed to clients, notwithstanding the Star Agreement delegated authority. Vestar is looking like an organisation which, under MFS ownership and with the collusion of the NZ directors, introduced a deliberate policy of favouring in-house or related company investments. Here in Christchurch we have not had the benefit yet of hearing what the lawyers had to offer at the North Island meetings, so are uncertain as to whether committing to a legal process, other than on principle, makes sense.
Monday 15th September 2008 at 2:11 pm
Yes I would be interested in “throwing my weight behind a resolution for Radius to sell down sufficient assets to repay investors who want to exit Radius?”
Monday 15th September 2008 at 2:31 pm
We are also in Ch’Ch’ Alan and like you have made no decision re legal process having heard nothing.
Radius was in our portfolio from Dec 2004 but Clendon “appeared” on 30 May 2007.
We also have Cymbis Aust.,ING DYF, OPI Pacific, Boston Finance, St Lawrence deb and Ppty, Diversified Mtg Trust, Cap and Merchant & Bridgecorp. What a load of old rubbish!
I see Boston Finance, under moratorium, was meant to pay 28 cents in the $ on 31 August 2008. They in fact only paid 3.46 cents.
The professional advice we paid for has cost us plenty so that we have withdrawn all we can and put what we have left in the Bank. It is unfortunate that St Lawrence Property, Cap & Merchant and Bridgecorp remain with Gould as they are “pooled”.
Monday 15th September 2008 at 6:42 pm
I’d like to get out of Radius… I too had told my advisor to keep things as liquid as possible – last year – yet when the investments reached maturity, my money was re-invested again.
Monday 15th September 2008 at 8:02 pm
Is the Tony Hannan mentioned above the same one involved with IMP?
When we questioned the Clendon investment the response was “well how do you know it’s not a good company?” Pity it was too late to uninvest by then. We were also told that Mr Curtin would be “perplexed” by our more general criticisms of the Vestar investment committee. How ironinc now.
Tuesday 16th September 2008 at 10:29 am
My husband and I would be very keen to join together and force a resolution for Radius to sell their assets and repay those who would like their money back. Does anyone know if we need over 50% of the total shares to force this at the meeting? Does anyone know if Radius owns 50% of their own shares? If we don’t jump now to force this matter we all could lose far more by hanging on. As far as we can see these moratoriums and the like are not all they are cracked up to be. Look at Boston for example. Giving them extra time means they can lace their own pockets first. Please let’s join together to get our money out for those of us who need it.
Tuesday 16th September 2008 at 1:10 pm
In reply to Jeremy:
Tony Hannon is a current director of more companies than you could point a stick at, including IEP Nominees Ltd and one of the I-Cap Mezzanine companies. Urgh.
He was previously a director of various ICP companies which are currently in receivership & liquidation.
Kelvin Syms and Jason Maywald also sat on the board of a number of companies of which Tony Hannon is a director, so I guess you could describe them all as boardroom buddies.
Tuesday 16th September 2008 at 8:20 pm
We have had Radius in our portfolio since 2004. $20,000 was put into Clendon 30.05.07.another $10,000 added 27.06.07.
Tuesday 16th September 2008 at 9:33 pm
Yes we are trying to get out of Radius And Clendon. We would support any move to facilitate this. Who do we contact?
Tuesday 16th September 2008 at 9:37 pm
In reply to Alan Moore:
Thanks, I have registered your interest for now. Keep watching.
Tuesday 16th September 2008 at 9:46 pm
I emailed Chris Holmes, managing director of Radius Properties, at lunchtime on Monday. I referred him to this article and invited him to put forward his views on this matter. After all, it’s only fair we hear what he has to say.
The response so far is a deafening silence.
Hmmm, that’s the sort of response we used to get from Vestar. Worrying.
Perhaps Chris is just on holiday and Radius can’t afford to pay anyone to clear his email while he’s away. Unlikely but you never know. I’ll keep you posted.
Wednesday 17th September 2008 at 8:14 am
We also have money in these two through Vestar. I am not aware of the current risk factor with these companies, but I would like to comment that there is another way of looking at the involvement of investment Principals in the management of companies which they believe in. In better times some investors would say it raised their confidence level.
There are a lot of assumptions being aired in these comments. They may be correct, but they may not.
That said it does make me even more nervous.
Wednesday 17th September 2008 at 1:51 pm
Per Radius recent report, there is no current market in which to sell shares. The market was to other Vestar investors.
Liquidity of investments is important for many of us and we are not getting that with this investment.
In June 2007 the market value was $1.25 a share. Now?
The company is looking to expand into development projects. This is high risk and not something I would buy into. The time frame is also too long.
I would like the opportunity to cash in my investment and any suggestion to free up cash to pay out investors now is great.
Wednesday 17th September 2008 at 2:04 pm
We would also be interested in following this up as we also have money in Radius. We tried to sell out of this in October last year, but were told they could only trade in-house and had no buyers. So any action would be great.
Wednesday 17th September 2008 at 3:28 pm
I have been out of the office on business.
We are interested in all shareholders interests, and have done so since 2004. Perhaps spending some time reading the annual report and newsletter would make you more informed about your investment, they are put there for shareholders benefit on the website. My phone number is also there. The Board is examining the ”Unlisted Market” as a liquidity option. Radius is a property company with real property assets and lowly geared, not a cash call account. Many shareholders have called me and are comfortable with their investment.
I welcome you to the AGM next week.
Wednesday 17th September 2008 at 7:42 pm
For the attention of Chris Holmes: Yes, we’ve read the balance sheet. As a shareholder my husband and I would therefore be interested in selling our shares for par. We can get more interest for our money in the bank. What is the use of having money tied up with little or no return coming in.
Wednesday 17th September 2008 at 9:19 pm
I’m certainly interested in exiting both Radius and Clendon as soon as possible
Wednesday 17th September 2008 at 9:52 pm
We’d be interested in supporting the resolution but don’t live in Auckland and can’t attend the AGM – is there any scope for ‘proxy’ support?
Wednesday 17th September 2008 at 9:59 pm
Re legal action: A while ago I spoke with Lawrence Herzog about whether he was open to including people from outside of the Auckland / Whangarei area in the legal action he was taking (I attended a meeting in Taranaki with a New Plymouth lawyer who stated it would be important to be able to meet in person, but questioned this in the age of email / phones etc). Lawrence Herzog was open to that idea. For those of you in Christchurch, you might want to give him a call (sorry, can’t find his number) or email him herzog@xtra.co.nz. Angela
Wednesday 17th September 2008 at 11:50 pm
Many of these posts including the opening one seek to presume unethical behaviour on the part of Northplan/Vestar and its management. I and my wife have been hit like other investors with company failures and as I said in my earlier post we have funds in the two companies under discussion where at present the only apparent issue is liquidity. It is hard to take the losses we are being dealt up but it is also wrong to presume guilt where it should not be placed.
When I attended investment review sessions with Northplan I was routinely shown copies of both independent research sought and paid for by Northplan and public ratings which ranked highly the choices that were being made. My point, the advisors were in general backing companies supported by market research. When MFS bought Northplan and changed its name to Vestar, the most significant change to us was money being placed with the parent company and related companies in various ways and this has been bad for us all, but it was under MFS’ pressure not Vestar.
I have sought confirmation of the relationship of Kelvin Syms with Radius and Clendon. I cannot verify the situation with the other directors outside of Northplan, but I firmly believe the following to be correct. Northplan owned 40% of the company with the management rights of Radius Properties and 50% of the company with the management rights of Clendon (Point Properties). In each case Kelvin was a director of the management company only not the investment company. He was there to represent investors best interests (he comes from a background of assessing properties for investment). He did not receive any directors’ fees and Northplan never received any money from dividends. The previous owners of Northplan in short received no payment other than their advisor fee for managing these investments. Nothing unethical about that and nothing unethical about investing our money into companies which have stacked up in performance against most other investments over the past 12 months.
Finally, should we try to force the company/ies into fire sales to satisfy some people who want their money out? Is that not the very thing which could cause serious problems for the remaining investors?
Thursday 18th September 2008 at 12:14 am
In reply to Chris Holmes:
Many thanks for your comments and entering into the dialogue. I’m sure you’ll be getting a few calls.
In reply to Graham:
I agree with a lot of your points. With Radius in particular, the issue is one of liquidity more than anything else.
Radius appears to own good assets with a stable income stream. Yes, they are embarking on development projects which might appear riskier, but they’re primarily to add value to properties they already own and where there appears to be strong demand for the finished product, rather than some purely speculative venture (like Clendon?). Undertaking the development itself involves a bit more risk but also gives it all the development profit. This is good for shareholders. I believe it’s a commercially sensible approach. Heck, if I was in their shoes I’d do the same.
One investor said she could get more interest for her money in the bank, but that’s ignoring the capital gain on her investment. If she was invested at par and the shares are now worth say $1.25, that’s a 25% capital gain on top of the dividend. If that’s over a 4 year period and dividends average 6% p.a. then the annual compounded return is 11.3% which is respectable.
On the other hand, their share valuation is highly questionable. There is no open market where supply and demand can determine a fair value. We only have Radius’ word that the shares are worth whatever they deem them to be worth. In 2007 the net asset backing per share was $1.17 but Radius values the shares at $1.25. On what basis? In 2008 the net asset backing has declined slightly and Radius have not published a 2008 share price. Why not?
It is possible that Radius has been tainted by its association with Vestar. And not without reason. We must treat anything Vestar spruiked with great suspicion because they seemed to have an uncanny knack for picking overwhelmingly dud investments that lined their pockets very well. And yet they would tell you to your face that all finance companies paid similar commissions and commissions therefore had no bearing on which companies they selected. Yeah right. That’s what I call deliberately misleading investors.
You might be right that Kelvin Syms was only there to represent investors’ best interests, but with the history of self-serving related party dealings, it’s natural to be extremely suspicious. And your information about him only being a director of the Clendon management company is not correct. He was in it donkey deep. Him and Jason Maywald were both directors of the following Clendon companies as noted in my earlier comment: Point Properties Holdings Ltd, Point Properties Management Ltd, Point Properties Developments Ltd, and Point Nominees (Clendon) Ltd.
Thursday 18th September 2008 at 1:01 am
In reply to Chris Holmes,
My accountant read your 2008 annual report, smiled and shook his head. The report does raise a few questions.
1. My income for the last 12 months has been less than 6% how do you explain this?
2. Of the 2,200 shareholders how many are Vestar/GWM investors?
3. What % brokerage/commission/marketing costs was paid to Vestar?
4. The share issue cost of $82,544 was paid to a related party. Are you going to tell who or can we guess?
5. The latest valuation shows it is worth $1.25 a share. Prove it and sell them all at that price!
Please don’t take offence Chris Holmes but any company that has been associated with Kelvin Syms makes a Victim of Vestar investor very suspicious.
Thursday 18th September 2008 at 1:10 am
Chris Holmes says “the Board is examining the ‘Unlisted Market’ as a liquidity option.” I believe the Board must do much more than just examine it. They must elevate it to the highest possible status and make it happen. Fast.
A great number of investors feel trapped in their Radius investment. And people who feel cornered do desperate things. If Radius wants to avoid an investor revolt and negative press, it must bring liquidity to the shares.
Thursday 18th September 2008 at 5:04 am
We like many investors above are also very keen to exit the Radius and Clendon investments. About a month ago I had a call for about an hour with Chris and talked in detail re both investments with the result being that it became ever more apparent that there was no viable exit option at this time or indeed in the short to medium term. The views expressed in this forum may change that.
Following my call the 2008 Radius Accounts were published which do not make great reading – the summary on page 9 of the Annual Report highlights this. Further to that I recall that no dividend was paid at the last quarter and the quarter prior to that there was a reduced dividend paid – this does seem to contradict the statement in the Radius Properties issued letter dated 18 August 2008 which states ‘At present, RPL either owns directly or part owns eleven properties, located throughout New Zealand, totaling $53 million and paying dividends of approximately 5% per annum.’
The 5 points raised by S above should be put to Chris and answered immediately. I appreciate the position that Chris is in however I believe a majority participants in this forum have had funds invested in companies where they have had no input or control however depending on the answer to the second point it seems that this may be a different case. The Directors and Board of Radius Properties have a responsibility to act in the best interests of the shareholders so the responses to the 5 points above should be forthcoming.
Thursday 18th September 2008 at 10:59 am
In reply to Graham, you may well be correct in that Radius worst enemy could well be the ex vestar clients that want their money out, ‘come hell or high water’
What intrigues me is if Northplan had ‘management rights’ before, who has them now?
Thursday 18th September 2008 at 11:40 am
In reply to Victim of Vestar. Clendon properties appeared on our portfolio 30 May 2007.
Friday 19th September 2008 at 5:18 pm
I’ve tried to phone Chris Holmes to put our questions to him and have not been able to get hold of him but will keep trying. Nothing sinister, probably just bad timing on my part.
The heartening thing about Radius is that it owns REAL assets which produce a REAL income. There doesn’t appear to be any smoke & mirror stuff going on here like we all suspect with Vestar related companies.
If you look at the cash income items only, i.e. excluding non-cash revenue items like property revaluations, they have a stable income stream. The rental income for the group was $1.6 million in 2007 and $1.98 million in 2008.
The operating cash flow, which similarly excludes non-cash items like property revaluations, was $0.9 million in 2006, $1.34 million in 2007, and $1.27 million in 2008.
I predict their profit will take a hit when they next report in 2009 due to property revaluations (downwards), but this is a non-cash item. Their cash revenue should be relatively unaffected.
As long as the property valuations can be trusted, I don’t see anything here to cause me any great alarm.
The lack of liquidity is the real issue.
Investors who don’t need the capital right now might sensibly decide that Radius is an okay investment, but those who really do need their money back need a way to sell their shares. It is a ridiculous situation to be locked into an investment with no way out.
Radius must address this issue urgently or face the prospect of investors calling for a sale of assets to fund the repurchase of their shares.
Monday 22nd September 2008 at 4:00 pm
I don’t think it is wise to panic over selling Clendon or Radius. When they were bought in my portfolio ING and National were sold. Both of those have lost 40% of their value since.
I am happy to wait out the current turmoil with a couple of solid properties that pay a small dividend and have an expectation of good capital gains.
Are you interested in selling them to me at the same 40% discount you would be selling similar products? Probably not!!
Monday 22nd September 2008 at 4:47 pm
Would you be interested in buying them?
Monday 22nd September 2008 at 8:34 pm
I interviewed Chris Holmes this afternoon. He cleared up a lot of things. I’m working on the article now and will publish it later tonight.
Tuesday 23rd September 2008 at 10:14 am
Yes at 40% discount!!!!!
Friday 26th September 2008 at 11:48 am
Rod, I have been away for a couple of days without computer access. Did you attend the meeting of Radius on Tuesday? What was the outcome of the meeting? Anyone know? My husband and I would be interested in selling our shares. They are valued at $1.25 per share on our Vestar portfolio. There are not that many of them. Are you still interested?
Friday 3rd October 2008 at 10:38 am
Clendon Shopping centre, June 2007, Vestar news letter:
“Kelvin has been personally involved with Chris Holmes in a property managemnet company to enable our clients to participate in the purchase and development of the Clendon Shopping Centre in South Auckland. There seems little sense in purchasing property at 6% yields if we can find property with a reasonable yield and a capital gain from development. Clendon represents such an opportunity. The property is being purchased for aound $25 million and after purchase approximately $10 million will be spent on developing the property to add investor value. Chris calculated an internal rate of return on this investment (being a combination of both income and capital gain) and has come back to us with a figure of 11%per annum. The regular income part of this will be around 7%per annum”.
The investment committee at this time, June 2007 was: Donal Curtin,Kelvin Syms, Simon Purvis, John Perris, John Price and Jason Maywald.
Monday 10th November 2008 at 9:33 pm
void repayment
Monday 10th November 2008 at 9:47 pm
We too are unwilling investors and would join any concerted effort to
recover our lifesavings.