Pyne Gould's Perpetual Trust has frozen its $56.2 million mortgage fund after a surge in investors seeking to pull their cash out amid increased scrutiny of the firm's related party loans.
Perpetual has put the fund in a moratorium where it will continue to accrue interest, but won't be able to accept new investments, nor pay withdrawals or distributions to unit-holdings, it said.
The firm took the move after receiving redemption applications worth some $6.1 million, or 11 per cent of the fund, since July 5.
"This development may be concerning to unit holders, but they need to be assured that we will be contacting them with more information as soon as possible," chief executive Patrick Middleton said. "This does not necessarily mean that the fund will close, or that the value of units will be affected."
Perpetual's funds have come under scrutiny after the Court of Appeal quashed a bid by Perpetual parent Pyne Gould to keep details of an investigation into related-party loans to George Kerr's Torchlight fund under wraps.