You have an account on the Macquarie Wrap platform. A wrap platform is a place where investments can be held in one place and managed by clients and their advisers. It simplifies the administration of your portfolio for you and your adviser.
The Shield Master Fund (Shield) is an investment option that was previously available on the Macquarie Wrap platform. When your adviser was selecting and recommending the investments for your superannuation holdings, they invested your funds in Shield.
Shield was controlled by a company called Keystone Asset Management (Keystone) in its capacity as the ‘responsible entity’.
Keystone has stopped accepting requests to invest new money and is not processing requests from investors who want to reduce their investment in Shield.
These restrictions should not affect the investments you have with Macquarie outside Shield and those interests can be changed or withdrawn subject to existing superannuation rules.
Important events
The corporate regulator ASIC has been taking various actions this year against Keystone, due to concerns about Shield and its underlying investments.
On 26 June 2024, Jason Tracy and Lucica Palaghia of Deloitte were appointed by the court to take control of Shield's bank accounts and provide a report on the financial position of Shield in July 2024 (see ASIC media release 24-137MR).
On 27 August 2024, the Federal Court made orders appointing Mr Tracy and Ms Palaghia as receivers and managers of the property of Keystone. They are required to:
- secure the property held by Keystone in its capacity as responsible entity of Shield and trustee of certain other funds,
- identify how Shield investor funds were used by Keystone, and
- recover Shield investor funds.
On 5 September 2024, the Federal Court made orders appointing Mr Tracy and Ms Palaghia as replacement voluntary administrators of Keystone, in addition to their role as receivers (see ASIC media release 24-197MR).
The administrators and receivers have started proceedings in the name of Keystone against Paul Chiodo and Chiodo Corporation Pty Ltd, City Built Pty Ltd (City Built) and Robert Filippini (the director of City Built, who is involved in the construction of the developments) and related parties. As part of these proceedings, the administrators and receivers have identified and obtained freezing orders over funds in bank accounts held by Mr Filippini and related entities.
The administrators published a series of reports to creditors on 25 November 2024, 27 November 2024 and 30 November 2024 (copies of which are available below and on Deloitte's webpage) and concluded that:
- Keystone is insolvent; and
- it's in the best interests of creditors for Keystone to be wound up.
In December 2024, Mr Tracy and Glen Kanevsky of Deloitte were appointed as liquidators of Keystone, following a second creditors' meeting at which Keystone's creditors resolved to wind up the company.
Mr Tracy and Mr Kanevsky retired from Deloitte on 1 April 2025 and joined Alvarez & Marsal on 2 April 2025. The Federal Court made orders to replace Ms Palaghia with Mr Kanevsky as a joint and several receiver and manager of Keystone. Mr Tracy and Mr Kanevsky are now joint and several receivers and managers and liquidators of Keystone. Alvarez & Marsal have established a web page dedicated to the Shield Master Fund.
Unit prices
We republish unit prices for Shield (and all investments we offer) via the Portfolio Valuation page in Macquarie Online.
The last unit price Macquarie received from Keystone was determined as at 3 April 2024. We have not received any further pricing information from Shield since this date.
Due to the time between the last unit price date and uncertainty surrounding the financial position of Shield, the true value of a unit will have changed. This is likely to impact the value of your investments in Shield. The last unit price is not a reliable measure of what an investment in Shield is now worth.
An up-to-date unit price for Shield can’t be provided at this time, as the value of a number of the underlying assets of Shield can’t be independently verified, and estimated values can’t be given with any level of certainty.
Financial condition of Shield
On Thursday 28 November 2024, we sent you a communication with a link to a Significant Event Notification (SEN) on Deloitte letterhead. You should read this SEN to understand more about the financial condition of Shield.
In the SEN, Deloitte reported that $525 million has been invested in Shield by the current investors and that a portion of this money has been spent by Keystone as follows:
- held in listed equity investments: approximately $180 million
- paid to Chiodo Corporation Pty Ltd, a company controlled by Mr Chiodo: approximately $265 million
- payments then made by Chiodo Corporation out of this $265 million included:
- for specific project costs: $108 million
- to lead generators, who marketed Shield to new investors: $65 million
- for shared project costs: $36 million
- to three companies associated with Mr Chiodo and Mr Frolov (Marsi, Malana, Nextform): $17 million
- for Mr Chiodo's personal use: $7 million
Receivers and liquidators are taking legal action to recover some of these funds for the benefit of Shield investors.
In particular, they have started proceedings to recover $158 million paid by Chiodo Corporation to Robert Filippini and City Built Pty Ltd (of which Mr Filippini is the sole director and shareholder).
Of this $158 million, bank accounts holding $110 million have been frozen by the Federal Court.
Creditors’ meeting
On 2 December 2024, a meeting was held to end the voluntary administration process. Before this meeting, creditors were asked to consider a number of proposals as an alternative to Keystone being placed into liquidation.
The receivers issued reports to creditors evaluating the proposals.
Creditors were asked to consider three proposals, known as DOCA proposals, and vote on them at the creditors’ meeting. The alternative to these proposals was for Keystone to be placed into liquidation and wound-up. You can find a link to a summary of these proposals here. You can also review Deloitte's full assessments on Deloitte’s webpage. Deloitte has since summarised its assessments in this way:
In short, each DOCA Proposal involved creditors and SMF investors giving up on significant claims and assets at a very low rate of return and/or progressing risky and/or uncertain investments that were not within the investment parameters in the SMF PDS in order to attempt to recover losses suffered from the previous mismanagement of SMF investor funds.
The receivers recommended that creditors vote in favour of the liquidation of Keystone. A majority of creditors, including Macquarie, agreed with that recommendation and voted to place Keystone into liquidation (with 12 votes in favour and two against).
On 13 December 2024, Deloitte issued a further SEN which provides an update on the outcome of the creditors' meeting.
Next steps and other matters
The liquidators have significant powers of investigation with the aim of recovering assets of Keystone for the benefit of investors in Shield and Keystone’s creditors. As mentioned, the SEN of 13 December 2024 sets out the liquidators' plans for recovering each category of Shield assets and their estimated timing on next steps.
As per our communication on 28 November 2024, the liquidators are not in a position to determine an up-to-date unit price for Shield.
The liquidation process is complex and will take some time. We’ll continue to share relevant information when it becomes available.
If you’d like to speak to us about the above summary, you can contact Macquarie via:
Email: wrapkeycontacts@macquarie.com
Phone 1800 095 568
Investors can also contact the receivers and voluntary administrators with any queries by emailing shieldinvestors@alvarezandmarsal.com.
