Beacon Financial Services hit by investment losses
Beacon Financial Services has lost up to $9 million since June 30 this year as a result of an expensive strategy to abandon the underperforming derivative positions in its investment portfolio.
The group, which is not associated in any way with Kevin Wyld or Beacon Investment Management Services, has since September 11 been progressively winding down the underperforming derivative positions which substantially comprised its investment strategy.
The move was expected to result in Beacon making a $2.28 million loss for the full year to June 30.
But a cash shortage since June 30 has forced the group to immediately abandon its entire derivative strategy, leading to what are expected to be losses in the region of $8 to $9 million.
According to a statement issued by the Beacon group, the losses will not impact on the investments of superannuation funds of which Beacon Funds Management (BFM), a wholly owned subsidiary of Beacon Financial Services, is a trustee, investment manager or administrator.
The group says the investment losses are independent of the underlying trading activities in its investment management, fund administration and consulting businesses.
However, the erosion of the group’s assets as a result of the losses could impact on BFM’s ability to act as an approved trustee of superannuation funds underAustralian Prudential Regulation Authority(APRA) guidelines.
BFM is currently in discussions with APRA to determine whether it can continue in its function as an approved trustee.
Beacon says it will continue its operations as a fund administrator, investment manager and consulting actuary through BFM and its other subsidiaries, Australia First Superannuation Administration and Auton Consulting.
The group no longer has any exposure to derivative positions.
Recommended for you
In this week’s episode of Relative Return Unplugged, AMP chief economist Shane Oliver joins the show to unravel the web of tariffs that US President Donald Trump launched on trading partners and take a look at the way global economies are likely to be impacted.
In this episode of Relative Return, host Laura Dew is joined by Andrew Lockhart, managing partner at Metrics Credit Partners, to discuss the attraction of real estate debt and why it can be a compelling option for portfolio diversification.
In this week’s episode of Relative Return Unplugged, AMP’s chief economist, Shane Oliver, joins us to break down Labor’s budget, focusing on its re-election strategy and cost-of-living support, and cautioning about the long-term impact of structural deficits, increased government spending, and potential risks to productivity growth.
In this episode of Relative Return, host Laura Dew chats with Mark Barnes, head of investment research, and Catherine Yoshimoto, director of product management, from FTSE Russell about markets in Donald Trump's second presidency and how US small caps are faring compared to their large-caps counterpart.
