It’s not a good look for the chairman of the board to fail to
invest in his own business, particularly when asking the punters to kick the can
for another $18.5 million or so. And it’s worse when the chairman has an undisclosed link
with the worst-performing asset in his portfolio – but that’s the opinion one
might form about the chairman of Sydney Swans and ING Management Ltd (IML), Richard

IML is the Responsible Entity for (ie it runs) ING’s stable of
property trusts, including ING Real Estate Entertainment Fund (IEF) which has a
portfolio of pubs and one club. IEF is presently seeking a minimum of $18.5
million from existing and new investors.

The product disclosure statement shows two of the five IML
directors don’t think IEF is really worth investing in, at least as
far as they are concerned. The two are chairman Colless and Michael Easson – the
former NSW Labor Council secretary.

Elsewhere in the PDS is a brief rundown of properties in the
portfolio – and quite nicely they have generally been performing with one
exception. While six of IEF’s 15 properties are yielding 9% or better on
their acquisition cost, just one has failed to make 8% – the Aussie
Rules Club in Kings Cross, coming in at 7.83% on its acquisition cost of
$12.5 million.

The Swans’ official web site describes the Aussie Rules Club as its
“social home.” The thumbnail summary of the club in the IEF PDS says: “The Club has recently obtained development
approval to undertake a significant refurbishment of the premises as a key part
of the growth objectives of its business and to facilitate its close ties to the
Sydney Swans.”

So it would seem there’s a bit of a relationship between the
Swans, chaired by Richard Colless, and the Aussie Rules Club whose landlord, also chaired by Richard Colless,
is suffering inferior returns.

No, it doesn’t look nice.

Disclosure: the Pascoe family has units in

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Peter Fray
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