The reality check for investors in Norshield Financial Group is that they shouldn’t count on getting much back. At a meeting in Toronto on Tuesday, The Globe and Mail reports, RSM Richter, the court-appointed receiver for Norshield, considered the granddaddy of all Canadian hedge funds, broke the news that would make investors quake: Richter has collected only C$8.1 million (US$7.1 million) and, if it’s lucky, could get its hands on another C$28 million (US$24.4 million). Subtract from that Richter’s C$7 million (US$6.1 million) fee. That means the 1,900 retail investors, with C$132 million (US$115.1 million) invested, and institutional clients, with C$210 million (US$183 million), could get back 8 cents to 10 cents on the dollar, and if the larger chunk of cash is never found – which Richter says is likely, thanks to incomplete and missing records – their payback would come in at around 3 cents on the dollar. In any case, Richter said it could take at least three years to get that pittance.
What did come out of the meeting besides a lot of unhappy people, however, was that Norshield actually invested little in hedge funds, and several the companies in which it did pour money are now out of business. Meanwhile, the Ontario Securities Commission and Quebec’s Autorité des marchés financiers are continuing their criminal investigations.