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Macquarie has agreed to compensate the victims of the Shield Master Fund collapse after financial planners using its platform pumped $321 million of people’s life savings into the allegedly rogue investment scheme.
The compensation scheme will cover about 3000 of the nearly 6000 people who invested in the $500 million fund between 2022 and 2023.
Macquarie will be hoping a fire sale of Shield’s assets, which include planned resorts, will get them some money back.
Macquarie has also admitted to breaching its obligation to act honestly, efficiently and fairly when it did not put Shield on a warning list after it had concerns about the fund.
ASIC deputy chair Sarah Court said: “This is an important outcome that stems the significant losses that threatened thousands of members’ retirement savings after they used Macquarie’s platform to invest their super in Shield.”
Shield collapsed last year during an investigation by the corporate watchdog, risking the superannuation savings of around 6000 people who had switched their retirement savings into the fund.
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A related fund – First Guardian Master Fund – collapsed this year, jeopardising the $460 million of super it had under management at the time.
ASIC has alleged Shield and First Guardian mismanaged the fund and spent investor money on the founders’ pet projects, a luxury lifestyle and huge payments to the scheme’s promoters and financial planners to drive people into the fund.
Macquarie said in a statement the payments would be made in full by September 30.
“Macquarie’s decision to devote resources to achieve this outcome recognises Shield’s unique circumstances, notably the scale of the issue, its material impact on many investors and their limited access to recourse from the many different entities which played a role,” Macquarie said.
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“To enact the payments, Macquarie will purchase the investors’ holdings in Shield at the current fair value, which is based on the estimated ultimate recovery from the liquidation process.”
The Shield Master Fund was made available to financial planners on Macquarie’s platform, which offers a range of investment products that can be recommended to clients. Macquarie received fees when planners selected a fund offered on its platform.
The fund was offered between 2022 and 2023 before Macquarie removed it from its platform amid concerns about the fund’s huge growth from less than $40 million under management to $500 million in only two years.
Its investigations into the schemes, operators, scheme promoters and financial planners involved continue.
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