Shield Master Fund terminated, new receivers for Keystone Asset Management

The Shield Master Fund (SMF) has been terminated while its responsible entity Keystone Asset Management (KAM) has been appointed a new receiver and administrator.

The troubled SMF was terminated on April 10 after the new receiver, Alvarez & Marsal, the third liquidator to take over the case in eight months, determined this was in the best interests of unitholders.

"KAM is in liquidation, no suitable replacement responsible entity of the SMF has been identified to date throughout the administration and liquidation of KAM and it is unlikely that a suitable replacement responsible entity of the SMF will be found," Alvarez & Marsal said.

KAM invested a significant amount of SMF funds into the Advantage Diversified Property Fund (ADPF).

"The ADPF has in turn made a number of loans to various special purpose vehicles in relation to potential land and/or property development projects. Many of these loans were made without the typical documentation and protections generally afforded in loan arrangements of a similar nature which has likely resulted in significant losses to the SMF," Alvarez & Marsal said.

Last August, Scott Langdon, John Mouawad and Michael Korda of KordaMentha were appointed as voluntary administrators of Keystone.

On 5 September 2024, the Federal Court ordered to remove the prior administrators and have Jason Tracy and Lucica Palaghia from Deloitte appointed as the replacement joint and several administrators.

At the second creditors' meeting held on 2 December 2024, creditors of Keystone resolved to wind up the company and appoint Tracy and Glen Kanevsky, also from Deloitte, as joint and several liquidators. On April 2, they both joined Alvarez & Marsal.

The now-defunct Keystone was the responsible entity for the Shield Master Fund.

The fund was available on Macquarie Wrap, and Equity Trustees' NQ Super and Super Simplifier platforms.

ASIC began its investigation in February 2024 to halt new investment offers and then made interim stop orders on four product disclosure statements for the fund. It then sought to have the fund's assets frozen.

ASIC said it was aware of authorised representatives from Interprac Financial Planning, MWL Financial Services, Financial Services Group Australia, and Next Generation Advice having recommended investment in the Shield Master Fund. About $100 million of investor money has allegedly disappeared.

In an update to investors, Alvarez & Marsal said: "We confirm that redemptions in the Shield Master Fund remain stopped pending the court's determination of the proceeding which is ongoing. As our investigations and the proceedings are ongoing, we are unable to confirm the timing and quantum of funds available to investors. We expect to provide a further update to investors shortly."