Guardian Trust has told investors it wants to close down its $249 million mortgage fund, six months after freezing withdrawals.
The company will hold a meeting on February 4 to allow its 3700 investors to vote on a proposal to wind down the Guardian Mortgage Fund.
The fund
was frozen at the end of July amid a raft of other mortgage fund freezes.
At the time Guardian Trust's then managing director Sean Carroll said the decision was taken because the fund's liquidity rate - or the amount of cash it had on hand - had dropped below 5 per cent - a level which the directors did not consider appropriate.
"We need to manage liquidity requirements very closely in funds such as these, where the assets [primarily mortgages] cannot be converted to cash quickly," Carroll said at the time.
He has since stepped away from the position to take up other duties within Guardian Trust's parent company Suncorp. New chief Greg Campbell was yesterday unavailable for comment but a spokesperson confirmed the company wanted to close the fund.
The Guardian Mortgage Fund was set up in 1986 and is one of the largest non-bank mortgage funds in New Zealand.
Last year the mortgage trust sector was hit hard by investors pulling their money out in the wake of the credit crisis.
Tower announced it would close its $242 million Mortgage Plus fund in April and has since returned around 40 per cent of the money to investors.
It was followed by the $250 million Canterbury Mortgage Trust, $249 million Guardian Mortgage Fund and $60 million Totara First Mortgage Fund which suspended withdrawals in July.
AXA then stopped institutional investors from withdrawing money from its $230 million Mortgage Backed Bond fund in August but later extended it to retail investors.
In October AXA stopped withdrawals from its Mortgage Distribution Fund, Mortgage Investment Fund and AXA Investment Portfolio which have a combined value of $225 million. It has said it will reassess the decision in March.
The vote on closing down the Guardian Mortgage Fund will be held at the Ellerslie Convention Centre.
