Private credit bust: Where Falcon Capital invested First Guardian funds

Falcon Capital, under investigation by ASIC, pumped hundreds of millions of dollars into companies associated with director David Anderson.

Chefs Scott Pickett, Matt Moran, Gordon Ramsay and Janine Allis. Falcon Capital lent $12m to Mr Pickett’s Rogue Traders Group in 2021.

Falcon Capital, which is under investigation over its management of the First Guardian Master Fund, invested hundreds of millions of dollars in companies associated with director David Anderson, including celebrity chef Scott Pickett’s restaurant empire, a Tasmanian craft brewery and an Indonesian property finance firm.

The Indonesian property finance firm was run by his former head of private equity who, according to the regulator, was never a paid employee at the fund.

First Guardian’s 6000 investors have been locked out of their funds since May, but Falcon, the responsible entity, has kept pumping money into illiquid investments even after suspending the fund last year, according to the Australian Securities & Investments Commission.

Fund updates to investors over the past 10 months have described cash receivables (or money owed) from a string of asset sales.

But the purported source of funding for all of these sales and a series of rolled-up loans – totalling $274m – is a single US-based investment fund set up a year ago that has yet to receive SEC approvals, according to ASIC.

Despite Falcon locking up the fund, Melbourne-based Mr Anderson has been using investor monies for his personal benefit, including to pay the mortgage on his lavish Hawthorn home, ASIC alleges.

Between June 2020 and September 2024, $5.6m was deposited into Mr Anderson’s personal ANZ account “without any legitimate basis for payments in that amount being apparent to ASIC or disclosed to investors”, ASIC said in court documents seen by The Australian.

In a single day in March 2024, and two days after ASIC sent Falcon notice of its investigation, the firm rolled $95m worth of loans it had issued to two companies – one of which Mr Anderson was a director of – into a third outfit, Maleo Singapore. In doing so, it exchanged previously secured debts for unsecured cash receivables, ASIC said in the court documents seen by The Australian. These debts have not been ­settled.

That day, Falcon agreed to sell its shares in another company –, again, one that Mr Anderson was a director of – to Maleo for $93m. A year later, at least $85m is still owed to Falcon from the sale, with ASIC unable to account for the remaining $8m.

First Guardian director David.

Mr Anderson was a director of Maleo Singapore until the day before these transactions and, along with Falcon, held an implied 85 per cent shareholding in Maleo Singapore through a related company until two weeks prior.

One of the companies that transferred its loans ($41m worth) to Maleo was Indonesian property investor Briix, run by First Guardian’s former head of private equity, Conrad Warren.

Despite heading up the PE team at First Guardian from 2019 to 2022, Mr Warren was not officially an employee of Falcon and received no remuneration for his role, according to ASIC.

Ten days after Falcon rolled the debts to Maleo, it struck a deal to sell its units in the Chiodo ­Diversified Property Fund for $94m.

The buyer of that stake, Asia Pacific Property Holdings, is managed by Josh Curtis who also controls a US investment fund, Sphinx Opportunity Fund II, which ASIC believes to be the ultimate source of funding for both the Maleo and Chiodo deals.

The Chiodo fund sale was agreed without any upfront payment or security, with money still outstanding, according to the regulator.

Falcon was previously a trustee for the Chiodo fund until 2021, when Keystone Asset Management took over. Keystone is now in liquidation and its director, Paul Chiodo, is separately being investigated by the regulator for allegedly mismanaging investor funds.

Separately, Falcon provided a $12m loan to restaurant owner Mr Pickett’s Rogue Traders Group in 2021 when Mr Anderson had a 70 per cent stake in the business.

That stake has since been transferred to First Guardian.

A spokesman for Scott Pickett Group said: “These issues have only recently come to light and we are working on a restructure which will ensure the group continues to please Melbourne diners in all of our venues, so it’s business as usual for us.”

Falcon also provided a $10m loan facility to craft brewer Fox Friday, later upgraded to $30m.

ASIC this week applied to the Federal Court for liquidators to be appointed to Falcon and for First Guardian to be wound up.

ASIC is also seeking the appointment of a receiver and manager to Mr Anderson’s personal property.

Originally published as Private credit bust: Where Falcon Capital invested First Guardian funds