Over 11 months, the increasingly ailing fund went from potentially having "significant value impact" on investors' returns to "highly unlikely" to deliver any financial return, leaving several Otago investors out of pocket.
Nine former Victoria fund investors have contacted the newspaper with concerns over the loss of their Victoria fund investments, which total more than $400,000, mainly in retirement savings.
Fund manager Britannia Management's director Craig Myles wrote to Victoria fund investors in June last year, signalling he "could not be certain of the value of the [Victoria] fund at this time".
"We are not communicating that the investment has no value, but rather that there is considerable uncertainty and the possibility of a significant value impact," Mr Myles said.
Earlier, in October 2009 and March 2010, Mr Myles told Victoria investors their "expectation should be for a lower figure" than that indicated in their portfolio value at the time.
A fortnight ago he told the same investors, "The financial position of the [Victoria] fund has further deteriorated and it is highly unlikely that the unit holders will receive any return on their investment in the fund."
For a Dunedin couple, last week's letter spelt the loss of more than $40,000. They have been involved with the Victoria fund for many years.
"We could have been that much better off in our retirement. That has been entirely ruined now," one of the couple said.
They claimed not to have received regular quarterly, half-year or full-year financial reports on their investments, other than verbal or ad-hoc updates when they requested explanations.
"I think it [financial updating] was bloody lax," one said.
Another investor, on the verge of retirement, who lost more than $60,000, was critical that the assets of the fund had moved from "owing and leasing out buildings", to riskier development investments near Nelson.
"All the eggs ended up in one basket, instead of being spread around," the investor said.
Three more disappointed investors contacted the Otago Daily Times yesterday. One woman said she would have to sell her home after losing more than $35,000 - her total savings - in the Victoria fund.
She said she had been promised a payout of about $50,000 by the end of last year, but the payout never eventuated.
"I tried and tried to get the money out earlier but because it was in property, I could not get it.
"I had always told them I didn't want my money going into property."
Another Otago couple claimed they lost more than $100,000 in the failed fund.
"This loss puts a big strain on us, as this was over half of our retirement savings and will place restrictions on our standards of living," they said.
"The fund had made a few promises over the last few years about a payout date and this kept being shifted forward.
"The first real sign of major trouble came not by a letter but by a visit in July 2011 from our Myles Wealth adviser, who indicated trouble and said we should expect a reduced payout.
"We decided then to withdraw our remaining funds managed by them - which we received".
The couple said they were promised updates from Craig Myles but nothing arrived.
Mr Myles has not responded to repeated written requests from the ODT as to the extent of total investor losses, or any details on the financial returns of the Victoria fund, since its inception in mid-2006.
Early this year the couple wrote to Mr Myles and later received a letter which they said left them no further ahead, until Britannia advised them not to expect any return of funds.
Another couple said they had "lost all" of a relatively "small" investment. While happy with initial returns when commercial properties were being leased out by the Victoria fund, they were "surprised and disappointed", when they discovered the fund had gone into property development.
At the centre of the demise of the Victoria fund is a subdivision near Nelson which took at least two years longer to develop than expected, and is under threat of mortgagee sale by Heartland New Zealand, which inherited the debt from CBS Canterbury, upon Heartland's multi-company amalgamation last year.
• Investors in the Victoria Property Fund can contact Simon Hartley, in confidence, at simon.hartley@odt.co.nz, or direct dial (03) 479 3527.
