ASIC review of investment company fall

LM Investment Management collapsed into voluntary administration. Its directors appointed John Park and Ginette Muller of FTI Consulting as voluntary administrators. The company managed at least $750 million on behalf of thousands of investors and is now the subject of regulatory and insolvency processes.

Yes. The corporate regulator, ASIC, said it has not cancelled LM Investment Management’s AFSL but is currently reviewing the operation of the AFSL in light of the appointment of the voluntary administrator.

LM Investment Management holds an Australian financial services licence that allows it to run managed investment schemes. The AFSL is central to how the company operated and why ASIC is reviewing its activities after the administration appointment.

The company managed at least $750 million on behalf of thousands of investors. One notable investment was a $240 million loan to Maddison Estate, a housing development in the Gold Coast hinterland associated with Peter Drake.

Peter Drake is a high‑profile Gold Coast businessman who headed LM Investment Management. The article notes a connection between Mr Drake and the Maddison Estate housing development, which received a $240 million loan from LM.

Voluntary administrators John Park and Ginette Muller have said they do not regard investors in the fund as creditors of LM Investment Management, according to the article.

The administrators indicated they will consider handing the company back to its directors under a deed of company arrangement. The article reports this as a potential option the administrators may explore; it does not provide further detail on the terms or likely outcomes.

Based on the article, investors should watch for outcomes of ASIC’s review of the AFSL and announcements from the voluntary administrators (John Park and Ginette Muller) about whether they will pursue a deed of company arrangement or take other actions. The situation is ongoing and developments will determine next steps.