Kiwi fund manager in global stoush

TIM HUNTER
Last updated 14:32 08/08/2014

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London-based Kiwi fund manager Richard Boon has called in lawyers in an escalating dispute with trans-Tasman investment firm Van Eyk.

On Tuesday Van Eyk suspended applications and withdrawals from its A$100 million ($109m) Blueprint International Shares Fund, blaming unauthorised investments by Boon's firm Artefact Partners, one of the fund's underlying asset managers.

Van Eyk claimed the fund had become illiquid because Artefact had ''elected to invest in a portfolio that was not in line with VBI's strategy and objectives.''

About 32 per cent of the fund's assets were invested by Artefact Partners, it said.

In comments to the National Business Review, Van Eyk managing director Mark Thomas strongly criticised Artefact, claiming it had invested money in an illiquid property fund with a mix of Australian listed and unlisted property assets.

''Why they did that we have no idea,'' he said. ''We and Macquarie as the [responsible entity] were instructing them to put it in cash and cash-like and they didn't do that.''

Three other funds with exposures of less than 10 per cent were also suspended - the Blueprint Capital Stable Fund, Blueprint Balanced Fund, and the Blueprint High Growth Fund.

In a statement to BusinessDay, Boon said Artefact was a hedge fund with wide-ranging investment permissions.

''The Fund's investments have always been within the guidelines of its prospectus,'' he said.  

''Mark Thomas's comments regarding Artefact are misleading and defamatory, and the matter is with our legal counsel.''

The June 2014 factsheet for the Van Eyk Blueprint International Shares Fund does not mention Artefact as an underlying manager.

Previous fund factsheets named Artefact as manager of around 25  per cent of its assets until September 2013, when it was replaced with an S&P500 index fund.

Both Artefact and Van Eyk have connections to Kiwi businessman George Kerr, managing director of NZX-listed Pyne Gould Corporation.

Boon is a current director New Zealand company Artefact Holdings, a company 100 per cent owned by interests associated with Kerr.

Meanwhile PGC owns a convertible note issued by Van Eyk Research which would convert to a 27 per cent stake. PGC converted the note and sold the shares this year.

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