Shield Master Fund Update SuperSimplifier Super Members

Shield Master Fund Background

Shield Master Fund (Shield) was a registered managed investment scheme listed on the following superannuation platforms:

• Macquarie Wrap
• NQ Super (subsequently transferred to FoC)
• Super Simplifier

Equity Trustees is the trustee for both FoC (which is a division of the AMG Super Fund) and Super Simplifier.

Shield was issued by Keystone Asset Management (Keystone). Keystone was also the Responsible Entity for Shield, which had reported Shield funds under management of $326 million at the end of the 2022/23 financial year. CF Capital, a related party of Keystone, was the investment manager of Shield.

In the last week of October 2023 Equity Trustees raised concerns with ASIC about financial advice being provided to members by certain Venture Egg advisers. These advisers were authorised to provide personal financial advice by Interprac Financial Planning Pty Ltd, the holder of an Australian Financial Services Licence. Equity Trustees’ concerns related to the compliance of the advice provided by the Venture Egg advisers with the requirements of the Corporations Act and relevant industry standards It transpired that the majority of Venture Egg’s advice recommended members invest their savings into Shield. Around the same time, Equity Trustees ceased accepting new members from persons advised by Venture Egg.

On 18 December 2023 SQM Ratings downgraded the rating of all classes of Shield to “Hold". On 19 December 2023 Equity Trustees immediately stopped all new flows into Shield, and on 10 January 2024 removed it from the Investment Menu for NQ Super and Super Simplifier.

Between February and June 2024 ASIC took action to halt new offers of investments in Shield, stop redemptions and appoint Deloitte to approve any payments out of the Shield Fund. Investors have not been able to access the amounts they invested in Shield since February 2024.

ASIC also notified Equity Trustees that it was investigating Equity Trustees’ conduct in relation to Shield, and served us with notices to produce documents and witness examinations of certain current and former staff. The cover letters for the notices stated that “ the notice should not be construed as an indication by ASIC that a contravention of the law has occurred, nor should it be considered a reflection upon any person or entity.” It is too early to determine whether ASIC’s investigation will take any other form.

On Tuesday 27 August 2024 the Federal Court appointed Deloitte as receivers of Keystone and subsequently on 5 September also as Voluntary Administrators.

The issue has received high profile media coverage by both the 7.30 report and The Age and in AFR (both owned by nine.com.au).

There are approximately 2,800 investors in NQ Super and 70 in Super Simplifier who are now not able to redeem their Shield units (valued at an estimated $150 million), and no clarity around the current value of those units. An accurate unit price will not be known for some months (and potentially even years), but it is expected to be substantially negatively impacted. The matter could take some years to resolve.

The Deloitte Administrators held the first meeting of creditors on 9 September 2024. The relevant notice and agenda for the first meeting (which was issued by former Administrators Korda Mentha prior to their removal) is available from the Deloitte Administrators, accessible from their webpage: https://www.deloitte.com/au/en/services/financial-advisory/notices/keystone-asset-management-ltd.html

At the first meeting of creditors, the Deloitte Administrators stated that, at this time, they expect to issue a report to creditors at the end of September, which has occurred. The second (virtual) meeting of creditors was held 2 December 2024

At the second meeting, creditors voted to place Keystone into liquidation. Deloitte were appointed as liquidators and will continue its investigations.

Key Communication Dates