Falcon Capital, First Guardian fund to be wound up

Following the order to freeze the assets of the First Guardian Master Fund and its responsible entity Falcon Capital last month, the Federal Court has ordered both the fund and the entity to be wound up.

In response to a petition by ASIC, the court has appointed Ross Blakeley and Paul Harlond of FTI Consulting as liquidators of Falcon Capital to shut down and liquidate the entity, the First Guardian Master Fund and related unregistered subsidiary funds.

Falcon Capital suspended the processing of applications and withdrawal from the First Guardian Master Fund in May 2024. Although subject to "some limited exceptions", most investors were not able to access their funds.

Following an ASIC investigation thereafter, it found that many investors were advised to roll their superannuation assets into a retail choice superannuation fund and then invest into the First Guardian Master Fund.

Some investors received advice to set up self-managed superannuation funds (SMSFs) to facilitate investments into the fund.

ASIC alleged that investors were misled into assets that differ from what was disclosed at the time of making their investment, adding that those funds were instead invested in entities that were associated with Falcon Capital director David Anderson.

ASIC also found that around $274 million of the fund's value from cash receivables in respect of which payments are many months late.

Additionally, over $23 million of the fund's assets were purportedly spent on marketing services, which appears "contrary to representations made to investors."

On 24 February 2025, the Federal Court made orders freezing all related assets.

Subsequently, ASIC applied to the Federal Court in processing the winding up and liquidation in March, to which, the court has acted swiftly in favour of the corporate watchdog.

The Federal Court also appointed Paul Allen of PKF Melbourne as receiver to the property of Anderson.

As a result, the entity and the First Guardian Master Fund, as well as the related unregistered subsidiary funds of the First Guardian Global Income Fund; the First Guardian Australian Development Fund; the First Guardian Absolute Equities Fund; the First Guardian Trulet Innovation Fund; and the First Guardian Global Equity Fund, will all be wound up in the process.