Investors with $850 million invested in Trinity Funds Management products have appointed KPMG to investigate the governance changes underway at the manager before deciding whether to put their mandates out to tender.
KPMG is preparing to undertake the investigation, which gives Trinity about three months to earn the confidence of the investors before they decide to stay with the manager or terminate their mandates in the wake of the success fee scandal that saw lobbyist Ross Daley earn $1 million for, he claims, helping secure a $100 million mandate from Sunsuper.
David Asplin, general manager – institutional funds management at Trinity, said the manager was working “very co-operatively” with the investors’ representative committee (IRC), “given that they constitute a large percentage of our external investments”.
The IRC, an independent body representing investors in Trinity’s unlisted funds, was formed in late July after the Investors Advisory Board (IAB), a sub-committee within Trinity, dissolved.
The six-member IAB was set up in mid-2008 to represent investors in Trinity funds, and included John Coombe, executive director of JANA; Megan Chan, portfolio manager with Sunsuper; Kevin Hogan, investment officer of Catholic Super; and Craig Stevens, chief executive officer of Austsafe
It is understood that KPMG was appointed by the IRC to investigate the governance changes taking place at Trinity following the Daley success fee scandal.
The major change was a near “clean sweep” of the Trinity board, which saw chairman Keith De Lacey, founder Peter Lewis and directors Bob Lette and Don O’Rorke exit, Asplin said.
“It’s a very positive development, in our eyes, that the [IRC] didn’t go straight to tender and consider our new governance strategy.”
The IRC has given Trinity until January 31, 2010, to demonstrate the effectiveness of the changes. The group is understood to represent about $850 million invested in five Trinity products.
Trinity is suing Daley to recoup the $1 million success fee. In the proceedings so far, the lobbyist said he made no contact with Sunsuper’s investment team, but said former Trinity chief Ben McCarthy asked for help in “gaining insight into the union officials that influenced superannuation funds,” according to the Australian Financial Review.
Sunsuper’s board includes Bill Ludwig, head of the Australian Workers Union, and Ron Monaghan, general secretary of the Queensland Council of Unions. The fund has steadfastly denied any involvement with Daley.