Overview
ISG Financial Services Limited operated two investment schemes – the ISG Private Access Fund (PAF) and the ISG Real Estate Equity Fund (REEF) – which raised approximately $145 million from retail and wholesale investors to fund property development activities.
In August 2024, growing concerns from ASIC and investors over ISG’s financial governance and compliance prompted an application to appoint external receivers. With investor support and ASIC’s backing, Olvera was appointed by the Supreme Court of Queensland as Joint and Several Receivers of the Schemes.
Challenges
- Complex Fund Structure: The two large investment schemes came with intertwined assets, liabilities, and investor classes.
- Regulatory Concerns: ASIC identified significant issues with governance, compliance, and financial integrity.
- Potential Misconduct: Early investigations revealed potential misuse of investor funds, including loans to related parties and personal use by directors.
- Investor Vulnerability: Investors had paid over $145 million to both schemes, requiring protection, verification, and recovery where possible.
- Court-Directed Reporting: Extensive obligations to report to the Court on solvency, investor claims, asset positions, creditor returns, and the overall wind-up strategy.
Turnaround Plan
Olvera was appointed as Joint and Several Receivers of ISG Private Access Fund (PAF) and ISG Real Estate Equity Fund (REEF) and subsequently as Liquidators of the responsible entity and 28 related entities. We conducted a comprehensive review of financial conduct, transactions, and asset transfers across multiple related entities.
Our team also submitted a formal Receivers’ Report outlining misconduct, including alleged Ponzi-style activity, personal use of investor funds, and compliance breaches. We also lodged an ASIC funding request to support further investigation and prosecution pathways towards the schemes.
Additionally, we managed the following asset protection and recovery activities:
- Lodged caveats to protect investor funds in any real property.
- Pursued third-party loans.
- Engaged private funders to pursue claims against directors, related parties, promoters, insurance, and advisors.
Results
Our investigations provided clear evidence of misconduct and misappropriation, which was documented and submitted to the Court. Investor funds were traced and protected where possible, and recovery actions were initiated.
These investigations allowed for a structured wind-up roadmap to be established, which provided stakeholders with transparency, accountability, and a legally sound pathway to resolution.
Key Drivers of Success
- Detailed tracing of funds and identification of misconduct strengthened recovery actions.
- Close collaboration with ASIC ensured robust oversight and access to investigative funding.
- Early lodging of caveats and aggressive loan recovery preserved value for investors.
