One of the late Allan Hubbard's investment companies has lost millions of dollars of value while under statutory management and could lose more as global sharemarket volatility continues, a report from the managers says.
Allan Hubbard, his wife and their investment companies Hubbard Management Funds and Aorangi Securities, and severalcharitable trusts, were placed into statutory management in June.
Allan Hubbard died last month after a car crash.
Statutory managers Grant Thornton yesterday said volatility on the world's sharemarkets had seen the value of Hubbard Management Funds fall to $46 million, compared with $47.8 million in June and $49.3 million on May 31.
The volatility of the fund was expected to continue for some time given the uncertainty of the global economic and financial markets, and could result in further losses, Grant Thornton said.
Progress had been made towards filing the required documents for a court hearing which would determine the distribution of Hubbard Management Funds to investors, it said.
The statutory managers had engaged actuaries to advise on the appropriate approach to allocate funds equitably between investors.
The advice indicated the calculation should be based on the March 31, 2010 statements prepared by Hubbard.
The managers said adjustments should be made for transactions in the period from April to June 20 last year - the day the company was placed into statutory management - and a shortfall in shares should be calculated as at that date and allocated proportionately to investors.
"Some of the shortfalls will have been reduced while others may have been made worse," Grant Thornton said. "Generally, it appears Mr Hubbard made purchases and sales in the period April 1 to about June 30 each year to correct issues he found in the statements."
The shortfall included listed stock market shares, and incorporated shares in Hubbard entities such as Scales, Southbury, and South Canterbury Finance.
Grant Thornton said it was working through the effect of Hubbard's death on the statutory management process with government agencies, the Hubbard family and their advisers.
There was a group of assets which the Hubbards held personally and stated that they intended to introduce into Aorangi Securities for the benefit of investors, Grant Thornton said.
"The availability of those assets to Aorangi remains a significant factor in the ultimate return to investors and we continue our work to determine the availability of those assets, as well as managing and realising them in the meantime as appropriate."
