First Guardian recovery prospects remain limited as liquidators recoup small fraction of losses

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First Guardian recovery outlook

Highlights

Liquidators of Falcon Capital have recovered only $8.02 million—1.56 percent—of First Guardian's $512.8 million investment value to date.
About $7 million in liquidation fees has consumed most of the assets recovered, with significant funds believed to be channelled offshore, limiting recovery prospects.
In December, Netwealth reimbursed around $100 million to about 1,000 First Guardian investors, while ASIC pursues court action against Diversa and Equity Trustees.

Liquidation update and legal timetable

As reported by ABC News, the liquidators of Falcon Capital, Ross Blakeley and Paul Harlon of FTI Consulting, say they still cannot tell 6,000 First Guardian investors what they are likely to receive from asset sales. They say they expect to provide a clearer picture after court hearings involving some of the major parties in November and December this year.

The directors valued the fund's investments at about $512.8 million. So far, liquidators say they have recovered $8.02 million, or 1.56 per cent, while about $7 million has already been consumed by liquidation fees.

The recovery effort remains constrained because a large share of the funds appears to have been channelled offshore. That leaves investors waiting for the outcome of court processes and asset tracing efforts before any firmer estimate can be made.

Investor losses and broader industry fallout

Investor anger is intensifying as losses continue to weigh on retirement savings and confidence in wealth platforms and trustees. Melinda Kee, a First Guardian investor who also runs Save our Super, says she "felt broken" after learning how little had been recovered.

In November 2023, Kee says she was advised to switch her super from a retail fund into First Guardian and lost $400,000 in retirement savings. She told ABC News that the low level of recoveries after 18 months is devastating for people whose life savings and financial security have been damaged.

Separate remediation has already occurred for some investors. In December, Netwealth reimbursed about $100 million to around 1,000 First Guardian investors who invested through its platform under a deal with the Australian Securities and Investments Commission, while ASIC is pursuing Diversa and Equity Trustees in court and both groups say they will defend the claims.

Some investors are also considering a class action to try to recover their money. Others may seek compensation through the Compensation Scheme of Last Resort, although payouts under that scheme are capped at $150,000 and some individual losses are far higher.

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