Packers don't always have the Midas touch

Just look at the timely arrival of one Alan Bond, who famously swelled the family's coffers when he strolled into Kerry Packer's life.

James Packer has enjoyed his own Bondy - private equity firm CVC Asia Pacific, which bought a half-share in Publishing and Broadcasting Ltd for about $4.5 billion at the peak of the market two years ago, before the term "subprime meltdown" had entered the global financial lexicon and pummelled sharemarkets.

Cashed-up and ready to invest, Packer ploughed much of the dough into Ellerston Capital, named after the family estate in NSW, which boasts polo fields and a golf course.

Ellerston is an absolute return fund owned by Packer's private Consolidated Press Holdings and was effectively the in-house manager of about $800 million of the family fortune - with a portfolio of global equities investments and a brief to grow that wealth.

The listing of Ellerston Global Equity Managers Fund (GEMS) last year - it floated at $2.50 a share - allowed private investors to get a piece of the action, and invest alongside the nation's richest men.

Sadly, the credit crunch has made an investment in Ellerston GEMS an unmitigated disaster - the fund has traded below its listing price of $2.50 for the past year, closing at $1.98 on Friday. Finally, it's time to pull the pin.

Chief executive Glenn Poswell, who ran the fund along with executive chairman Ashok Jacob, has announced that Ellerston GEMS will delist, and has proposed a scheme for shareholders to cash out - but most will have to wait at least a year and pay a redemption fee.

Shareholders who want their money before 2010 will be paid 92.5% of the net asset value of their share of the fund. Some had hoped to get as much as $2.33 for each share - the net asset value at the end of July. They will be lucky to get $2.15.

GEMS was one arm of the Ellerston empire. Its high-profile investors included David Baffsky, of the hotel group Accor Asia Pacific, former ANZ boss John Macfarlane and investment managers at both ABN Amro and the Victor Smorgon Group.

Packer is also a big holder in GEMS - in recent months his private company has lifted its stake from 8% to 14%, to buttress the unit price. It just shows that following the money of billionaires is not always a good strategy.

Investors should get used to news of such delistings - the rumour mill suggests that Macquarie Infrastructure Group, Macquarie Airports, and Macquarie Communications will also privatise in coming months, as their assets are worth more than their sharemarket valuations.

Healthy result

FULL Disclosure has called for straight-talking in profit season. Chris Rex, managing director of Ramsay Health Care, has heeded the call.

While providing analysts with an obligatory Powerpoint presentation at the company's results briefing, Rex quipped: "Just a couple of pie charts here, largely because they fill up the page nicely and look good in the colours."

And that's about the extent of it. Mind you, Rex has good reason to be chipper. In June Ramsay Health Care's share price plunged from May's 12-month high of $12.55 to a low of $8.59 following Federal Government changes to the private health system.

It has since clawed its way back to $10.25.

Mercedes in top gear

THOSE in the market for some flashy new wheels should keep their fingers crossed in coming days - the hard-working lobbying team from Mercedes-Benz Australia has descended upon Canberra in yet another effort to kill the Federal Government's planned luxury car tax, which was announced in the budget.

The chief agitators from Mercedes, who want the Government to tax by exhaust pipe emissions rather than the sticker price of a car, have even been granted an audience with Treasurer Wayne Swan to plead the company's case.

A meeting with the Greens has also been scheduled in Canberra to win their support in the Senate - potentially spawning a rather unholy alliance between environmentalists and the world's oldest builder of cars and trucks.

Federal Trade Minister Simon Crean had a letter from European Trade Commissioner Peter Mendelson condemning the rise in tax, after the EU man was lobbied by Benz. Former Victorian premier Steve Bracks has been swayed - he has adopted the Mercedes-Benz team's plan to tax cars by CO2 emissions as part of his review of Australia's automotive industry.

ASX fast out of blocks

THE Australian Securities Exchange has been under fire on many fronts for its slowness in dealing with suspicious trades, but it's certainly quick to pull the trigger when companies don't pay their way.

CommQuest and Shell Villages and Resorts have been suspended from trades for failing to pay annual listing fees, joining a list of 29 companies that have been tardy in adding to the ASX's coffers.

CommQuest was quick to blame an "administrative error" and says it transferred the cash on time. The board expects the company to resume trading this morning.

The news is a little less forthcoming from Shell Villages, which has to provide quarterly Appendix 4C reports to the ASX on its cash position.