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An Interview with Neil Paviour-Smith

July 22, 2010

An interview with Neil Paviour-Smith


Last updated 05:00 15/07/2010

When an investment goes belly-up and people lose a lot of money, questions tend to arise about what went wrong.

For an investment called Credit Sails which cost New Zealand investors millions of dollars, the questions are inextricably linked to the global financial crisis and the intricate detail of the credit boom that preceded it.

Ask Neil Paviour-Smith, managing director of the firm most closely associated with Credit Sails in New Zealand, Forsyth Barr, and the answers hark back to 2006 when $91.5 million was raised from investors on the promise of capital protection and a superior return.

”If you go back to 2006 investors were falling over themselves to buy high-rated, high-yielding product. You saw Craigs [Investment Partners] had Hy-Fi, Macquarie had Generator Bonds, we had global credit notes.

“They were all CDO-related products. There was Credit Sails, [Macquarie’s] Fortress notes, First NZ had their Fidelity [capital guaranteed bond] vehicle, et cetera – all of these were structured and designed to provide high yeilding capital protected or capital guaranteed type products which attracted high ratings from international rating agencies.”

As history shows, some did better than others.

Mr Paviour-Smith now finds himself having to explain why investors ended up losing close to 100 per cent of their money in a product for which his firm acted as lead manager, and which was marketed to clients of several brokers including his own.

Click here to read the complete version of An interview with Neil Paviour Smith, by Tim Hunter, 15 July, 2010.

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